Watchung Mayor: ‘PILOT’ to Bring Millions in Borough Revenue

Negotiations with Bonnie Burn Developer are a “Win” for Taxpayers

WATCHUNG – January 12, 2022 – Watchung Mayor Keith S. Balla announced today that a new “PILOT” agreement with developers of a Bonnie Burn Road apartment complex will generate far more annual revenue for Watchung than traditional property taxes, totaling nearly $32 million over the next 30 years.

“This carefully-structured agreement will relieve the tax burden on today’s property owners. It also promises tax relief for our children, grandchildren and other future homeowners,” Mayor Balla explained. “This is a substantial financial win for Watchung.”

Under terms of the “PILOT” – or “payments in lieu of taxes” – Bonnie Burn Urban Renewal LLC will begin paying an estimated $710,000 annually once its construction project is complete, those payments steadily rising over the agreement’s 30-year term, Balla said.

The borough’s total net revenue is projected to be $31.8 million over 30 years, compared to only $15.2 million if the apartment complex owners were to pay conventional property taxes, the mayor explained.

Construction of the Bonnie Burn apartment complex is to begin in July and take 36 months to complete. The Borough Council approved the PILOT agreement in December based on a persuasive analysis of revenue projections that Mayor Balla and his administrative staff prepared.

Developers received approvals last year to build six multi-family buildings, including 230 apartments, on 42 acres along the borough’s eastern edge, a $75 million investment.

More than half of the property will remain undeveloped; the remainder of property will include the housing units, a clubhouse, an outdoor swimming pool, a children’s playground and a dog run.

The Bonnie Burn Road tract – across from Weldon Quarry and a Watchung firehouse – currently generates about $8,000 in total annual property taxes with only $2,500 paid to the municipality.

“This payment in lieu of taxes arrangement represents the culmination of months of productive negotiations with the developers,” Mayor Balla said.  “We were pleased to negotiate this tremendous win for Watchung taxpayers.”

Developers will be required to set aside 46 apartments as rentals for low-and moderate-income tenants, a move that Mayor Balla said will offset Watchung’s court-mandated quota to provide approximately 372 affordable housing units, under state law.

The project will also create many temporary construction jobs, a boost for the local economy, the Mayor said.

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