Red Bank Regional High School.
NOTE: This story has been edited from an earlier version to add comments that came in after it was originally posted.
By BRIAN DONOHUE
The Red Bank Regional High School Board of Education sent a message this week to Borough of Red Bank officials who are expected to consider granting a tax abatement to the developer of a 13-acre tract around the train station: we want our fair share of the money.
The developer Denholtz (recently renamed from Denholtz Properties) is proposing a mix of residential, commercial, and green space that includes up to 400 apartments in a pair of five and six-story buildings on properties Denholtz and NJ Transit own near the station.
Consultants for both Denholtz and the Borough of Red Bank have said the company will likely seek a Payment In Lieu of Taxes (PILOT) agreement with the borough as permitted under a 1994 state law designed to spur development in blighted areas.
In a resolution passed Tuesday night, the RBR Board called on borough officials to make Denholtz pay 24 percent of its bill under any agreement to the high school – just like everyday taxpayers do.
Under the terms of a typical PILOT agreement between developers and municipalities, 95 percent of the money goes to municipal coffers, with local schools and the county getting zilch.
That differs dramatically from property taxes paid by a typical business or homeowner, who pay 60 percent of their taxes to support Red Bank’s two school systems. With what is essentially an entire new neighborhood rising in town, RBR board members said they could see an influx of students but would get no money to educate them under a default PILOT agreement.
In a resolution passed at their meeting Tuesday, members of the RBR board declared a default PILOT agreement “would be detrimental to the finances of Red Bank Regional High School and negatively impact students of the Boroughs of Red Bank, Little Silver and Shrewsbury up to and including severe budget cuts to offset funding for public education being diverted by the Red Bank Borough Council via said agreement.”
The resolution “formally requests” the Borough include the school district in any PILOT agreement it might approve.
In a separate letter sent to Mayor Billy Portman, Board of Education President Patrick Noble put it this way:
“Our request is simple and straightforward. For the percentage in tax revenue that our school district would receive from property taxes on this new development, we are requesting the same percentage of the PILOT agreement for the duration of its existence.”
He continued: “The Board of Education takes no position on the potential existence of this PILOT agreement and your decision on whether to enter into it; we only seek an equitable share of the revenue that we will otherwise be excluded from entirely.”
Emails seeking comment from Portman and Borough Manager Jim Gant were not immediately returned. Councilman Ben Forest, who serves as the governing body’s liaison to schools, said he would support a plan to share potential revenue with the schools.
“I support sharing any revenue with the schools,” he said in a message to redbankgreen. “I will urge my colleagues to do the same. Keeping in mind there is no decision in front of us at this time, this is a hypothetical. I will listen to any proposals, weigh the pros and cons from NJTransit and the developer.”
It remains to be seen whether the Red Bank Borough Board of Education, which controls the two schools serving Red Bank children in grades Pre-k to Grade 8, will follow suit and ask for a share of any potential revenues. The borough schools have struggled with shortfalls in state aid for years.
In an email to redbankgreen Red Bank Borough Board of Education President Sue Viscomi said: “The Red Bank Borough PILOT Initiative will be discussed at our upcoming Board of Education meeting on February 11, 2025, at 7:00 PM at the Primary School. As a board, we will carefully deliberate on the options that best serve our students and the entire district.”
The train station redevelopment plan (see story below) faces several hurdles even before the Borough Council considers an ordinance authorizing any proposed PILOT agreement.
RED BANK: 400 APARTMENTS, GREEN PLAZA, NEW STREETS IN TRAIN STATION PLAN
Officials said Planning Board hearings were expected to begin in February, with both the board and the council required to approve a redevelopment plan. Any PILOT plan would require a second ordinance approved by the council.
The move by the RBR board of Ed comes several months after a public meeting at which a consultant representing Denholtz raised some eyebrows of those in attendance when he touted the schools being shut out of PILOT revenues as a benefit.
The statement came in response to an applause-garnering statement by resident Mary Ellen Mess who said she was opposed to a tax break for developers.
A representative of the Otteau Group, a Matawan-based real estate brokerage and consultation firm hired by Denholtz, defended the idea of a PILOT agreement for the project saying, “Right now in Red Bank, for example, the town only gets 31 percent of the taxes on property.”
“So in this case, it would be 95 percent,” he continued. “So if we they help bridge that gap in tax to have a slight decrease in tax on the building to make the project affordable the town ends up with a far larger sum of money.”
Such sales pitches have faced more pushback statewide in recent years.
Towns like Jersey City that have granted large numbers of tax abatements to developers have faced significant criticism from education advocates and taxpayer groups over the long term toll such arrangements take on school finances. Jersey City eventually put in place a one percent employer payroll tax to boost school funding after state aid was cut left taxpayers with whopping property tax increases.
A bill proposed in the state legislature in 2016 would require towns that issue PILOTs to share revenues with local school districts. It cleared committees but it was never posted for a vote by the full legislature.
Have a news tip or story idea? redbankgreen editor Brian Donohue may be reached via email at [email protected] or by calling or texting 848-331-8331. Do you value the news coverage provided by redbankgreen? Please become a financial supporter if you haven’t already. Click here to set your own level of monthly or annual contribution.
