Controversial tax deal is boost to Washington Twp. project

Despite persistent opposition, a large redevelopment project in Washington Township that appeared destined to remain tied up in court may be heading toward construction, after officials authorized a tax deal for the plan.

An attorney for the redeveloper planning the Washington Square project said Tuesday that his client intends to move "full speed ahead" toward site plans and that two business tenants had already been secured for the mixed housing and commercial project.

Last week, the township council approved a payment-in-lieu-of-taxes (PILOT) agreement for the project off Hurffville Cross Keys Road - a tax deal that has remained a sore subject in Gloucester County's most populous municipality. The final authorization rests with Mayor Barbara Wallace, a Democrat, who can sign, veto, or take no action on the measure, which in effect would allow it to go forward.

The governing body's 3-2 vote authorizing the PILOT would settle a lawsuit by the redeveloper, Washington Square Partners, claiming the town violated a 2008 contract that indicated such a tax agreement "may" be necessary "in order to make the project feasible." That was filed in 2013, after the council rejected a proposed PILOT.

In December, council members defied recommendations from township professionals and tabled a vote on a modified tax deal that was aimed at ending the suit.

Talk of a PILOT has riled many residents since the project was proposed seven years ago, many expressing concern that it would generate more students for the school district, but no revenue for it.

Plans for Washington Square include an estimated 330 rental apartments, 100 for-sale townhouses, and 170,000 square feet of retail and office space. As provided by state law, PILOT payments are made directly to the municipality with 5 percent required to go to the county.

An agreement reached several weeks ago by council and the Board of Education calling for 44 percent of the PILOT to be directed to the school district was seen as a measure to quell worries.

The 25-year deal with the developer is expected to generate about $1.1 million in its first year and about $1.8 million in its last; the townhouses would be taxed at standard rates.

School officials have estimated that the townhouses and apartments will bring 109 additional students and that they likely will have to absorb more costs to educate them than the district's share of the PILOT would cover. In Washington Township, the district collects 56 percent of standard property taxes.

Nicholas Menas, attorney for the redeveloper, Washington Square Partners - an entity made up of the Atkins Cos. and Woodmont Properties - said the PILOT approval "allows the project to move forward."

"We have been telling, and told them from the beginning, that a PILOT was probably going to be necessary," Menas said. "This was an area that the township declared was in need of redevelopment."

Some are still not sold on the tax deal. Councilman Scott Newman, a Democrat, and the lone Republican, Councilman Nicholas Fazzio, voted against the measure.

There is talk in town that some residents are looking at ways to put the issue of the PILOT out to voters, perhaps by petitioning to place a referendum question on the ballot.

Giancarlo D'Orazio, a former Republican councilman who was president last year, said the tax deal shortchanges the town and other recipients of tax dollars, including the fire district.

Despite the message conveyed by some officials, he said, the 2008 redevelopment agreement did not appear binding. "There's a difference between may and shall," he said, referring to the contract's language about the need for such a tax deal.

D'Orazio also called council's resolution regarding the PILOT's school allocation an "empty promise" because it was not part of the actual financial agreement.

Stephen Altamuro, a Washington Township lawyer and resident, said many were still not on board with the project: "I really just don't think it's something that helps Washington Township."