Sayreville sued after rejecting tax plan for massive industrial park

SAYREVILLE – The redeveloper of a 77.87-acre site in the Hercules Redevelopment Area is suing the borough alleging the Borough Council did not follow state law in rejecting a long-term tax exemption on the warehouse project.

In 2021, Parlin Section I Urban Renewal LLC, of West Conshohocken, Pennsylvania, and the Sayreville Economic Redevelopment Agency (SERA) agreed on a plan to develop three commercial warehouses at the intersection of South Minisink Avenue and Cheesequake Road, according to the lawsuit filed Nov. 21, 2023 in Middlesex County Superior Court.

On May 3, 2022, Parlin Section I Urban Renewal submitted to the borough an application for a long-term tax exemption for a payment-in-lieu-of-taxes (PILOT) agreement. In a PILOT, redevelopers pay a fixed sum to a municipality for a period of years instead of property taxes as a financial incentive to redevelop distressed properties and obtain financing for the project.

After negotiations, Parlin Section I Urban Renewal reached a PILOT agreement with the borough’s financial consultants, Phoenix Advisors, the lawsuit claims.

In August 2023, Parlin Section I Urban Renewal finalized the agreement with a request the Borough Council place the PILOT application on its next available agenda for a vote.

That’s when the process went awry, the lawsuit charges.

According to the lawsuit, the Borough Council did not place the PILOT application on the agenda for its next meeting.

Instead, a month before the election, the Borough Council rejected the PILOT agreement at its Oct. 10, 2023 meeting without the issue on the agenda.

That, the lawsuit charges, did not give either Parlin Section I Urban renewal or the public an opportunity to give input on the issue.

The Council did bring up the PILOT during the general discussion at the meeting and voted to deny it, according to the lawsuit.

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The lawsuit claims that the borough did not follow procedures in the state Long Term Tax Exemption Law (LTTEL) for handling the PILOT application.

The lawsuit says that, according to LTTEL, the PILOT application should be submitted to the mayor or other chief executive officer, who would then forward it within 60 days, with recommendations, to the governing body for a vote.

“The borough did not follow this procedure and, to (Parlin Section 1 Urban Renewal’s) knowledge, the Mayor of Sayreville (Victoria Kilpatrick) never submitted the application to the Council for consideration, nor did the Mayor provide a recommendation with respect to the application,” the suit alleges.

The lawsuit further alleges that the Borough Council did not follow state law by not adopting a resolution denying the application, but only took action by a voice vote.

In addition, the lawsuit contends, state law requires that in the event of a rejection, changes may be suggested to secure approval, but the Borough Council did not notify Parlin Section 1 Urban Renewal of any recommended changes.

The borough’s denial of the PILOT application was “arbitrary, capricious and unreasonable,” Parlin Section I Urban Renewal claims in the suit.

“The borough did not follow the statutory procedure in the LTTEL for processing of the PILOT application,” the lawsuit says. “Prior to any denial, plaintiff should have been provided with notice and an opportunity to be heard.”

The borough declined to comment due to the litigation.

Parlin Section I Urban Renewal LLC is seeking to have the denial vacated.

Email: [email protected]

Susan Loyer covers Middlesex County and more for MyCentralJersey.com. To get unlimited access to her work, please subscribe or activate your digital account today.

This article originally appeared on MyCentralJersey.com: Sayreville sued after rejecting tax plan for massive industrial park