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Town hears Phoenix Advisors' overview of PILOT agreements and negotiation trade-offs
Summary
Phoenix Advisors explained payment-in-lieu-of-taxes (PILOT) agreements, statutory tests (10% of gross revenue or 2% of project cost), phased statutory minimums, annual audit/true-up rules, and how municipalities negotiate protections and community benefits. Council asked about school, police and infrastructure impacts.
Anthony Inverso of Phoenix Advisors told the Pompton Lakes Borough Council on July 17 that PILOTs — payment in lieu of taxes — are a common tool to encourage redevelopment of underused or hard‑to‑finance sites. "It stands for payment in lieu of taxes," Inverso said, and he outlined the main statutory calculations and protections available to municipalities.
Inverso explained two statutory tests the long‑term tax‑exemption law provides: a typical negotiated approach based on a percentage of annual gross revenue, "the minimum pilot under the long term tax exemption law is 10% of annual gross revenue," and an alternate formula set at 2% of project cost, which advisers said is rarely used because it…
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