Hopewell Township’s bond attorneys are now working directly with the Hopewell Valley Regional School District to develop a legally binding agreement for up to $16.1 million in payment-in-lieu-of-taxes (PILOT) funds to support the planned Bear Tavern Elementary School expansion.
Mayor Courtney Peters-Manning said the township has connected its attorneys with the district to work out the details of how the contribution would be structured. “The next step is we’re trying to come up with some legally binding memorandum of understanding with the district,” she said. “But we can’t sign on the dotted line until the litigation is resolved.”
Township pledge and referendum plans
The Township first pledged the PILOT funds in April, when the committee unanimously adopted a resolution earmarking up to $16.1 million from the Hopewell Parc redevelopment tax agreement. The intent was to support the Bear Tavern expansion — identified as one of the district’s most needs to address growth — and ease the potential tax burden on residents. However, the Township has been clear that they can’t give the district money while there is ongoing litigation with the PILOT agreement.
The Hopewell Valley Regional Board of Education is moving forward with a two-question referendum on Nov. 4. Question One seeks $58.4 million for critical infrastructure needs including HVAC and roofing replacements and security upgrades across all schools. Question Two, which is dependent on Question One passing, adds $25.8 million for additions to be built at Bear Tavern and Toll Gate Grammar School to accommodate rising enrollment and the need to stop using temporary classrooms. State aid is expected to cover roughly one-third of the overall costs with most of that aid being tied to Question One. The $16.1 million from the Township for the Bear Tavern addition would be used to reduce the debt service on the $25.8 million in Question 2.
Superintendent Dr. Rosetta Treece welcomed the Township’s step toward formalizing its commitment. “We appreciate the Township moving toward legally solidifying its financial commitment to the Bear Tavern,” she said. “As we have shared with our community, this funding, when available, will be used for structured payments toward the debt service to reduce local taxes.”
Legal challenge still pending
Despite the Township’s resolution, actual distribution of funds is tied up in ongoing litigation. Pennington and Hopewell boroughs sued earlier this year, arguing the township acted unlawfully in approving the 30-year PILOT.
In August, a two-judge Appellate Division panel upheld the Township’s ordinance, finding that the Long Term Tax Exemption Law allowed the arrangement. But the ruling is not precedential, and Pennington has since announced plansto petition the New Jersey Supreme Court for review. Hopewell Borough has said they will no longer be pursuing the litigation and want to move forward with the Township’s commitment of funds to the district while encouraging discussion about how to best use PILOT funds fairly.
Peters-Manning said the township is proceeding as though the appellate decision will stand but emphasized that no agreement can be finalized until the litigation is resolved. “We want to be ready on day one,” she said, “but the framework depends on the litigation being resolved.”
