Woodbridge Resident Criticizes Town For Giving PILOTs To Developers

WOODBRIDGE, NJ — At the most recent Woodbridge town Council meeting, resident Scott Gawrych criticized Woodbridge Township government at length for their decision to give a 30-year tax abatement to Woodmont at MetroPark.

As first reported by Patch last October, Woodmont Properties will build a six-story apartment building with 200 units at 186 Wood Avenue south, just down the street from the MetroPark train station and across from APA Hotel.

His comments come at a time when some in Woodbridge say the town is being overbuilt with new apartment buildings. Garwych said ever since he spoke at the Feb. 7 meeting, he's received positive feedback from his neighbors. And his speech has blown up on Nextdoor, where it's been viewed more 4,000 times.

"I am pro-growth and welcome the new developments, because it brings better retail and restaurants our way," Garwych told Patch this week. "I am purely a concerned citizen who thinks we can find better and smarter ways to grow Woodbridge for the next generation. 30-year PILOTS are the wrong way to grow Woodbridge. "

A PILOT (payment in lieu of taxes) is when a local government gives a tax break to a developer. This is usually done to incentivize development in poor or economically depressed areas. The builder will either make a payment directly to the town in lieu of taxes (hence the name), or property taxes will be abated or deferred, sometimes as long as 15, 20 or 30 years down the road.

It is not known when construction will begin, but the Woodbridge Council granted Woodmont a 30-year tax abatement for the project, in a unanimous 9-0 vote.

PILOTS and the Woodbridge school district

Another key aspect of PILOTs is that — unlike traditional property taxes, which are split between the town, school system and county — in a PILOT the city or town keeps nearly all the money.

"The reason city governments love issuing PILOTs is because the city keeps 95 percent of the revenue (the county gets the other 5 percent)," Garwych told Patch over email. "In traditional property taxes, 60 percent goes to the school budget, 30 percent to the city and 10 percent to the county. I refer to Tax Abatements – Civic Parent for a primer on how this works."

However, he warned that all these new apartment buildings will flood the Woodbridge public school system with new students.

"These buildings will introduce hundreds of kids into the school system, but schools can only increase their tax levy by two percent a year," he said. "Fewer people pay into the school budgets, so as school budgets increase, the burden falls solely on homeowners, as none of these new buildings contribute towards the school budget for 30 years."

In other words, Garwych predicts existing Woodbridge homeowners could end up paying higher taxes because the luxury apartments were given abatements and PILOTs.

At the meeting, Councilman Kyle Anderson took issue with Garwych's theory, saying that New Jersey school funding formula is also made up of state aid, and that districts get more state money when their population increases.

Woodbridge also gives most of its PILOT payments to the school district, said Mayor John McCormac.

Council president Gregg Ficarra defended approving Woodmont at MetroPark, because he said the building that is currently there now (which will be torn down) is paying less than $150,000 in taxes to the town.

"And when the PILOT starts, it quickly goes up to over $900,000 (in tax payments)," said Ficarra. "The money is coming in, and I don't see the effect that it is going to have on the schools. We have a proven history of working with the schools and providing them services, and providing them facilities that allows them to spend their money the way it should be spent: On teaching and curriculum. As long as we've been doing this, no one on the Board of Education has felt that they've been shorthanded."

"The school board gets what they need from us every single year," said McCormac.

Watch that Feb. 7 meeting. It's a long discussion that Garwych starts at minute 16:

Developers are already making a profit in Woodbridge without special tax breaks, Garwych says

Woodbridge Township also gives out PILOTs and tax breaks to developers when they are not needed, he said.

"Regarding 30-year PILOTS, and this one specifically, the developer claims they need 30 years of tax breaks to 'enhance the economic viability' of the project," said Garwych. "When looking at the financial statements provided by the developer, they turn a profit after year five with the tax break, not 30. Additionally, their profits widen considerably over the next 25 years of the pilot (they reap over $9 million in profit in year 29 alone)."

"We are giving too steep a discount over too long a period of time to a developer who doesn’t need it," he continued. "If the developer received no tax break at all, the project would turn a profit by year 11, and widen them to healthy margins by year 15."

Responded Ficarra:

"They have options in other places," referring to developers. "When we offer these PILOTs, the administration does its due diligence and we feel there's a benefit to the town. We're not just willy nilly offering these PILOTs to anyone."

Finally, Garwych criticized the Woodbridge Town Council for what he says is voting in lockstep at the mayor's request

"What (that Feb. 7) meeting showed was that no one on the council read the hundreds of pages included in the application for the 30-year PILOT, yet they voted 9-0 to approve it because the mayor recommended it," Garwych told Patch. "This is the fundamental issue I am trying to bring to light with how many of our government entities act."

Garwych said in the case of Woodmont at MetroPark, he thinks a 15-year PILOT would be a more fair compromise for the developer, the town of Woodbridge and Woodbridge taxpayers.

"The developer remains profitable the whole way through, the tax payers don’t get bilked for the school bill over 30 years, and the mayor grows the city," he said.

"I am actually very excited about all the development going on," he said at the Feb. 7 meeting. "I am not even against the use of the PILOTS. I am against the misuse or or abuse of pilots. They will have very serious affects on the tax burden for (Woodbridge) property owners down the road."

"It's a very important issue for the Woodbridge community, given our rapid growth."

Prior: Six-Story, 200-Unit Apartment Building May Come To MetroPark Station: Woodmont at MetroPark (Oct. 2022)

And related: Gov. Murphy Unveils Big Plans For MetroPark Apartments, Offices (Oct. 2022