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Highlands council introduces long-term tax exemption for Shadow Lawn; public questions $51M pilot estimate
Summary
On Nov. 5 the Borough of Highlands council passed first reading of ordinance 02524 to authorize a long-term tax exemption (a PILOT) for the proposed Shadow/Shadow Lawn development and approved a package of routine resolutions; residents asked about geotechnical studies, timing and how the estimated $51 million in pilot payments is calculated. A financial presentation by NW Financial is scheduled for Dec. 3, 2025.
The Borough of Highlands council on Nov. 5 introduced ordinance 02524, approving the application for a long-term tax exemption and authorizing a financial agreement for the proposed Shadow (Shadow Lawn) residential development, and it adopted a series of consent resolutions including designation of a redeveloper for a nearby tax lot.
The measure was passed on first reading with a public hearing set for Dec. 3, 2025. Mayor Bulan told the council the redevelopment agreement and concept plan will be made public after the meeting and that the ordinance establishes a timetable for approvals and construction: "So if you add up all of these different months, it is 6 years in total," he said, describing the statutory windows the developer has to gain approvals, secure financing and complete construction.
Why it matters: the ordinance would allow a payment-in-lieu-of-taxes (PILOT) structure for what the mayor described as a five-story building with 292 rental units, about 44 of them affordable and "deed restricted for a period of 40 years." The administration estimates the pilot could yield roughly $51 million over 30 years based on projected rents and the developer's revenue share; council members and the public were told NW Financial will present the underlying projections and methodology at the Dec. 3 meeting.
What the council approved and what remains to be decided: during the meeting the council adopted multiple items by roll call, including resolution R25195 designating a redeveloper for block 105.107 lot 1.1 and a consent package of resolutions (R25198–R25208) covering appointments, contracts and interlocal agreements. The ordinance 02524 was passed on first reading; final adoption will follow the required public hearings and any land-use approvals the project requires.
Public questions and town responses: several residents and a representative of the East Point board pressed the council on access to the purchase and redevelopment agreements, geotechnical and traffic studies, potential vibration or structural impacts on nearby buildings, and how the PILOT payments are calculated. Fran McManam, redevelopment counsel to the borough, told the audience that "they will have to get all of the approvals that are necessary to develop that site in consideration of geological parameters around the site," and that many detailed concerns will be addressed through the land-use review process.
On the pilot payments, a resident asked about the $51 million figure; David Stanley said he had seen "approximately $51 million in benefits" projected over 30 years. Mayor Bulan and counsel explained that the amount is an estimate based on projected rents and the percentages locked into the financial agreement, and that the statute and annual audits govern how revenue and allowable deductions are calculated. The administration cited the long-term tax exemption statute (recorded in the meeting as NJSA40A 20-1) as the legal framework for those calculations.
Next steps: the council scheduled a public hearing and a financial presentation by NW Financial for Dec. 3, 2025 at 7:00 p.m. The land use board will handle site-specific reviews, geotechnical and traffic approvals, and other permitting before construction can proceed.
