Vernon rejects petition Seeking referendum on PILOT agreement

Vernon has rejected a petition calling for the township’s payment in lieu of taxes (PILOT) agreement with a developer to be put to a referendum.

Vernon resident Peg Distasi, one of two residents who submitted the petition consisting of 2,353 signatures to the town on Jan. 14, said she and her fellow petitioners received a notice rejecting their petition from Township Clerk Marcy Gianattasio Jan 23.

The notice, based on advice from township attorney Peter King, states the PILOT agreement is exempt from referendum pursuant to the Local Redevelopment and Housing Law and specifically cites a 2001 state superior court decision in Millennium Towers Urban Renewal Limited Liability Company v. Municipal Council of the City of Jersey City.

A rebuttal delivered to the town on behalf of the petitioners contends the Millennium Towers case does not apply and that the right of referendum is protected in the state constitution and implemented via the Faulker Act.

The town has not responded to the rebuttal.

Omega Drive PILOT

The Vernon Township Council passed a PILOT agreement Dec. 29 with a developer planning a 27-unit four-story residential building on Omega Drive.

A PILOT agreement is a government-granted financial incentive that allows a property owner or developer to make a negotiated annual payment to a municipality instead of paying conventional property taxes. These programs are used to encourage development and revitalization in specific areas that might otherwise remain vacant or underutilized.

In New Jersey, such an agreement has to be approved by the Department of Community Affairs. Upon receiving approval from that department, the council approved a 30-year PILOT with a subsidiary of The O’Neill Group, a real estate development company headquartered in Hackensack.

The PILOT does not provide money for the school district, which, according to estimates, could take on an additional eight students generated from the residential development. Per the PILOT agreement, about $3.7 million will flow into town coffers over 30 years versus what would have been $1.3 million from traditional property taxes, according to Vernon Mayor Anthony Rossi. The school district would have recieved approximately $3.2 million via traditional property taxes.

The O’Neill Group

In addition to the Omega Drive project, Vernon entered into a PILOT agreement with The O’Neill Group in 2024 for the three-story housing development containing 55 one-bedroom units with parking for those ages 55-and-older on Theta Drive.

The group also has an application before the Land Use Board for three four-story multi-family residential buildings consisting of 33 units each on Route 515.