A two-judge Appellate Division panel on Thursday affirmed a lower court ruling that upheld Hopewell Township’s 30-year payment-in-lieu-of-taxes (PILOT) agreement for the 1,077-unit Hopewell Parc redevelopment, rejecting claims from Pennington and Hopewell Boroughs that the ordinance authorizing the PILOT was unlawful or adopted for an improper purpose.
The opinion, argued Oct. 1, 2024, and decided Aug. 21, 2025, is unpublished and not precedential, but it resolves this case unless the New Jersey Supreme Court agrees to review it. Judges Gooden Brown and Smith concluded the township acted within the Long Term Tax Exemption Law when it approved Ordinance 22-1766 authorizing a financial agreement with developer Lennar.
What the ruling says
In the 23-page opinion, the judges sided with the trial court on two central points. First, the Long Term Tax Exemption Law requires a governing body to assess the importance of a tax exemption to a project, not to prove the exemption is strictly necessary. The court pointed to the ordinance and the financial agreement’s findings that the PILOT was “critical” to the project in light of extraordinary development costs and said those findings satisfied the statute.
Second, the court applied traditional deference to municipal legislation under the state Supreme Court’s Riggs framework and declined to impose a more searching “substantial evidence” standard drawn from cases involving redevelopment designations. The panel also upheld the trial judge’s case-management decisions limiting discovery and proceeding on the written record plus expert opinions.
In short, the Township’s PILOT agreement stands.
Pennington’s position
Pennington Borough said it is evaluating its options following the decision. “We’re carefully considering it and reading the language of the order,” Mayor Jim Davy said.
What it means
The ruling leaves the Township’s PILOT intact and allows the Township and developer to keep implementing their financial agreement while the parties decide whether to seek further review. It also underscores that municipalities have room under state law to weigh project benefits and the role of tax incentives without proving a strict “but-for” need—particularly when a project delivers required affordable housing. It also means the Township can move forward on providing the Hopewell Valley Regional School District with $16.1 million for an addition at Bear Tavern Elementary School.
Reaction from the District and Township
“We are grateful that the courts have consistently upheld our position,” Hopewell Township Mayor Courtney Peters-Manning said in a statement. “This outcome allows us to deliver on our longstanding commitment to our schools and provide students with the permanent, modern classrooms they deserve.”
In a press release Thursday, the Township said the decision “fully” upholds its PILOT agreement and, absent further appeals, allows the township to move forward with “providing up to $16.1 million in funding for critical improvements at Bear Tavern Elementary School.”
“We’re excited about this development,” said Rosetta Treece, Superintendent of Schools. “We need to continue to have open conversation with the township as we discuss the mechanism for how we can receive the $16.1 million. And we need to see if there will be an appeal.”
The District recently approved ballot questions for a November referendum that includes two questions. The second question addresses the Bear Tavern addition, and can only pass if the first question passes, and at this point in the process the questions cannot be altered. District officials have said that if the $16.1 million is received, it would be used to reduce the debt incurred from the Bear Tavern addition if that question is approved by voters. The mechanism for receiving the money from the township remains under discussion.
“While we are happy that this most recent legal battle has resulted in a potential next step for Hopewell Township to provide us with the dollars from one of their PILOT programs,” school board member and finance committee chair Mark Peters said, “I’d be remiss by not mentioning that this only provides us an additional conversation with the township, and not an actual pathway toward receiving the money.”
Could this go to the NJ Supreme Court?
Any further appeal in the PILOT case is not automatic. Pennington Borough has 20 days from the Appellate Division decision to file a petition for certification asking the New Jersey Supreme Court to review the case; the justices then decide whether to hear it. The court notes on their website that it receives more than a thousand petitions each year and accepts about one hundred, and a petition must show that the appellate judges made a legal error.
Hopewell Borough, which joined Pennington in the appeal, had previously taken public steps signaling an intent to withdraw so the lawsuit would not delay township school-funding commitments. Hopewell Borough Mayor Ryan Kennedy said that remains the borough’s position and he does not anticipate pursuing further appeals, although any final decision rests with the full council.
The project at issue
Approved in 2021, Hopewell Parc calls for 1,077 homes in a development off Scotch Road — 861 market-rate units and 216 affordable units — on land designated for redevelopment. The PILOT covers all phases for 30 years.
What’s next
If no petition is filed — or if the Supreme Court declines to hear the case — the Township can proceed under the financial agreement as approved. If a petition is filed, the Supreme Court will determine whether to take the appeal; if it does, the existing ruling remains in place unless and until the high court says otherwise.
PILOT Photo Illustration at the top of the story created by Seth Siditsky
