Mobile home park seeks PILOT contract
Council agrees to conduct impact study into payment in lieu of taxes agreement
BY DANIEL HOWLEY Staff Writer

EATONTOWN — The owner of a local mobile home park has requested to enter into a payment in lieu of taxes (PILOT) agreement with the borough in the wake of the park being designated as an affordable housing development.

The county Affordable Housing Alliance (AHA), which own the Pine Tree Mobile Home Park, is seeking that council approve a PILOT agreement as a way to reduce the amount of tax money the alliance is required to pay for the property.

"This is a nonprofit that is going to essentially operate this facility and generate revenue from [the rental of mobile home units] to support itself," Eatontown Mayor Gerald Tarantolo said last week.

"In cases of this sort, rather than give the [mobile home park] a tax break, we allow them to pay in lieu of taxes some amount that is reasonable, but not equivalent to what they would pay if they were a totally independent commercial entity," Tarantolo said.

At the Nov. 14 council caucus meeting, Councilman John Schiels requested that the borough perform a study of the impact such an agreement will have on the borough before moving forward.

"I would strongly stress that I think we need an analysis of the impact, because we are just talking in generalities here and we don't know what this impact is," Schiels said.

Before any decisions are made, council agreed to conduct an impact study on how the PILOT agreement would affect the borough.

Under the terms of the proposed PILOT agreement, the AHA would cease paying $83,000 in taxes for the Pine Tree Mobile Home Park property located on Route 35, and instead pay $63,000 annually to the borough directly.

According to Eatontown Borough Business Administrator George Jackson, the AHA currently pays approximately $83,000 in property taxes for the Pine Tree property. That money is split between the county, borough and school district.

With the PILOT agreement in place, the AHA would no longer make any payments to the school district.

"The money that comes into the town, generally speaking, under these agreements, is not shared by the county, or our your school board," Borough Special Counsel Albert Rescinio said at the meeting.

"Of course one of the factors to be considered by you, the council, is that [the mobile home park] is low- and moderate-income housing and there probably is going to be a certain number of families with children that are going to be attending the schools without any compensation to the school budget," Rescinio said, adding, "And it could be a classroom or two."

Schiels explained that because a large population of the mobile home park could be attending the borough school system, he would like an impact study conducted before an agreements are made.

"You said that no money is going to the school board and that could be a substantial number of children, which then affects the other residents in the school board budget," Schiels said. "So I think the impact has to be known before we go into this agreement.

According to Tarantolo, the council can develop a general idea of how the borough will be affected by looking at the number of children who live at the mobile home park now versus how many lived there in previous years.

The difference between the number of children living there now and how many used to live at the park can be used as a general figure, which could then be applied to come up with an estimate of how many children will live there in the future.

Should the borough find through the study that a PILOT agreement with the AHA would negatively impact the town, the council could choose to tax the property as it would a normal property.

However, such an arrangement could prove devastating to the borough's affordable housing plan, according to Tarantolo.

When the AHA decided to purchase the Pine Tree Mobile Home Park from its previous owners in 2007, the borough agreed to provide the organization with $250,000 from its affordable housing fund if it agreed to have the site designated for affordable units.

As a result, the borough was able to count a certain amount of the housing units on the site toward its affordable housing requirement.

Under the state's Council on Affordable Housing's (COAH) round three regulations, Eatontown must provide 490 units of affordable housing by the year 2014.

"We targeted this project as part of our round three COAH obligation," Tarantolo said. "What we liked about it essentially is right now this facility has about 130 [housing] units.

"We recognize that right now we probably could immediately get [COAH] credit for 80 to 100 of those units until that project is stabilized and actually in operation," Tarantolo added.

According to Borough Attorney Gene Anthony, if the borough chooses to deny the AHA's request for a PILOT agreement, the AHA could decide to sell off the Pine Tree property, nullifying the borough's agreement to designate the site for affordable housing.

"That would have an adverse impact on our COAH plan, because we are loosing 100 units," Tarantolo said.

The AHA is a nonprofit organization based out of Monmouth County that provides residents of Monmouth, Mercer and Ocean counties with the resources and information needed to better understand affordable housing.

Contact Daniel Howley at

dhowley@gmnews.com.