WATCHUNG – The plan to build 230 apartments on Bonnie Burn Road, now being challenged in Superior Court, will generate $32 million in revenue for the borough over the next three decades.
Mayor Keith S. Balla announced the borough has negotiated a new Payment in Lieu of Taxes (PILOT) agreement with Bonnie Burn Redevelopers Urban Renewal, part of Sterling Properties of Livingston.
Once construction is completed on the $75 million project, the developer will begin paying $710,000 annually to the borough instead of traditional property taxes.
The annual payments will increase over the 30-year agreement.
The borough’s total net revenue is projected to be $31.8 million over 30 years, compared to only $15.2 million if the apartment complex owners were to pay conventional property taxes, Balla said.
“This carefully structured agreement will relieve the tax burden on today’s property owners. It also promises tax relief for our children, grandchildren and other future homeowners,” the mayor said. “This is a substantial financial win for Watchung.”
The Borough Council approved the agreement with the developer in December.
The Planning Board gave final approval on Oct. 27 for the six multi-family buildings on 42 acres along the borough’s eastern border. More than half of the property will remain undeveloped with the rest developed with housing units, a clubhouse, an outdoor swimming pool, a children’s playground and a dog run.
The proposal is part of the borough's court-mandated affordable housing settlement with the Fair Share Housing Center. Of the 230 apartments, 46 will be reserved for low- and moderate-income tenants. That will offset Watchung's court-mandated goal of 372 affordable housing units.
Construction is expected to begin in July and take 36 months to complete.
The Bonnie Burn Road tract – across from Weldon Quarry and a Watchung firehouse – currently generates about $8,000 in total annual property taxes with only $2,500 paid to the municipality.
“This payment in lieu of taxes arrangement represents the culmination of months of productive negotiations with the developers,” Balla said. “We were pleased to negotiate this tremendous win for Watchung taxpayers.”
However, the project faces a legal fight in Superior Court.
In December, Weldon Materials filed suit against the Planning Board and the developer, claiming that approval of the project was "arbitrary, capricious and unreasonable" and should be reversed.
The lawsuit contends that the project will have "significant negative impact to the existing traffic on Bonnie Burn Road" and a "negative impact" on the traffic to and from the quarry.
"The capacity of Bonnie Burn Road has already been reached and this situation will be exacerbated by the proposed project," the lawsuit alleges.
Weldon Materials is also objecting to the installation of a traffic light at the intersection of Bonnie Burn Road and the driveways in and out of the project.
In the response to the lawsuit, Francis Linnus, the planning board attorney, denies the lawsuit's allegations and challenges the suit's characterization of remarks made at board meetings.
"The actions of the Planning Board were legally and factually supported by the record," the response states.
Weldon is also suing the Planning Board over its approval of a Learning Experience day care center at 100 Union Ave. across from its quarry entrance on New Providence Road.
The board approved the facility in July 2021 after 10 public hearings.
The lawsuit argues that the board approved the project despite Weldon's concerns about flooding and traffic.
Watchung has until Feb. 4 to file a response to that lawsuit.
Mike Deak is a reporter for mycentraljersey.com. To get unlimited access to his articles on Somerset and Hunterdon counties, please subscribe or activate your digital account today.
This article originally appeared on MyCentralJersey.com: Watchung reaches $32M agreement for 230 apartments on Bonnie Burn Road