Redevelopment gets underway at the former Foodtown site, Route 70, Brick, N.J., Aug. 2022. (Photo: Daniel Nee)
Brick Township officials have taken the first step in approving a tax abatement for the sports dome complex under development at the former Foodtown site on Route 70.
The abatement, formally known as a Payment in Lieu of Taxes, or PILOT, will last for either 30 years or 35 years, depending on how an agreement is applied. The township council voted unanimously to grant the project a PILOT agreement at its meeting Tuesday night, with Mayor John Ducey telling residents that the developer of the dome said the project would not be built without it.
“A year and-a-half ago, we had to switch the contracts because they lost several investors,” Ducey said of the developer of the sports dome, Peter Tasca, who has headed similar projects in North Jersey. “He could not raise the capital without a PILOT agreement with the township.”
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Ducey said the developer informed him that new investors could not be lured to the project unless an abatement was included. The PILOT agreement replaces traditional property taxes with an agreed-upon payment to be submitted to the township each year, governed by a contract. Normally, property taxes are divided between a number of sources, with the school district receiving the bulk of the revenue. Under a PILOT, 95 percent of the proceeds remain with the municipal government and 5 percent is submitted to the county government. While schools are traditionally left out of such agreements, the PILOT introduced Tuesday night includes language that guarantees the school district free access to the facilities.
“But for the annual service charge, the redevelopment could not and would not be built by the developer,” said Ducey, quoting state statutes that require certification of the non-viability of the project. “They ran all the numbers and eveyrthing else, and it does meet the ‘but for.’”
Ducey said the township’s tax assessor reviewed the project as the amount of the annual payment was being calculated. It is impossible to calculate, to an exact dollar amount, what the “dome” would have paid in property taxes since it is not yet built and future tax rates have not been set, but such agreements are almost always a lower figure than a traditional property tax bill. The PILOT agreement introduced Tuesday night only applied to the sports complex – not the neighboring retail complex which will occupy the other half of the property, which will include an Aldi supermarket and other tenants that have yet to be announced.
The agreement was proposed by the sports dome developer Aug. 16. when an application was filed for a long-term tax exemption as defined in the state’s redevelopment law. Ducey then forwarded the application to the township council with a recommendation of approval. The council must hold a public hearing on the PILOT agreement and take a second vote before final passage. That will occur at the Sept. 13 council meeting.
Redevelopment gets underway at the former Foodtown site, Route 70, Brick, N.J., Aug. 2022. (Photo: Daniel Nee)
The detailed terms of the financial agreement were not published on a meeting agenda along with the ordinance introducing it. Shorebeat has requested a copy of this agreement, which came in the form of an exhibit with the ordinance. Ducey, however, said the annual payment will be based on “project revenue and percentage of project cost.”
The ordinance indicates the payment will be about $280,000 per year, which will change over the course of the term of the PILOT, based on the variables as called-for in the contract. The agreement will remain active for 30 years from redevelopment completion or 35 years from the execution of the agreement itself.
The sports dome will include a 27,600 square foot basketball center, and a 68,400 square foot domed structure that will host numerous athletic and wellness facilities. Tasca’s first project, the Superdome in Waldwick, Bergen County, paid $310,432 in property taxes in 2022, according to a review of tax records. The Waldwick facility is larger than the planned Brick facility.
