Hopewell Township has approved a long-awaited agreement establishing how millions of dollars in PILOT revenue will be provided to the Hopewell Valley Regional School District to help pay for the expansion of Bear Tavern Elementary School, while increasing the Township’s projected commitment from approximately $16.1 million to $20.7 million.
The Township Committee unanimously approved the 20-year shared-services agreement Monday night, putting a mechanism behind the Township’s earlier commitment and spelling out how annual payments will be made to HVRSD to help offset debt service associated with the Bear Tavern portion of the district’s 2025 voter-approved referendum.
The action builds on a commitment the Township first made in April 2025 to contribute up to $16.1 million in PILOT revenue toward the Bear Tavern expansion. What remained unresolved was how those municipal revenues could actually be provided to the regional school district over time.
The new agreement provides that framework while increasing the Township’s projected contribution by approximately $4.6 million.
“Tonight we’re voting to invest approximately $20.7 million in the Bear Tavern Elementary School expansion,” Mayor David Chait said before the vote. “That is $4.6 million more than we committed a year ago, and it comes from a portion of the revenues generated through the Township’s PILOT program.”
But the agreement is not final yet.
The Board of Education, which was meeting at the same time Monday night, did not have the agreement on its agenda and has not voted to approve it.
The Board is expected to consider the agreement in October.
District officials nevertheless expressed support Monday for the agreement and the partnership that produced it.
From a $16.1 million pledge to a 20-year agreement
The Township’s commitment to Bear Tavern dates back to April 2025, when the Township Committee pledged up to $16.1 million from revenues generated by the Hopewell Parc PILOT to support a proposed 10-classroom addition at the elementary school.
At the time, the project was estimated at approximately $16.1 million and was intended to address enrollment growth and replace temporary classroom trailers that have been used at Bear Tavern for decades.
The original commitment contemplated using a portion of Hopewell Parc PILOT revenue generated over time rather than a lump-sum payment. Questions remained, however, about the mechanism through which those municipal revenues could be provided to the regional school district.
The issue was further complicated by litigation over the Hopewell Parc PILOT involving Hopewell Township and Pennington Borough. Hopewell Borough, which had been part of the original lawsuit, later withdrew.
With the timing and mechanism for the Township contribution still uncertain, HVRSD ultimately included the Bear Tavern addition in its November 2025 bond referendum rather than relying on the PILOT contribution to directly fund construction.
Voters approved both questions of the $84.2 million referendum in November. Question 1 authorized $58.4 million for infrastructure, security and other improvements across the district, while Question 2 authorized $25.8 million that included additions at Bear Tavern and Toll Gate Grammar School.
That allowed the district to borrow for the Bear Tavern work while leaving open the possibility that future Township PILOT payments could reduce the amount ultimately borne through school taxes.
Monday’s agreement provides much more clarity about how that will happen.
How the payments will work
The Township’s approximately $20.7 million commitment will not be paid to the school district at once. Instead, the agreement establishes annual payments beginning in 2027 and continuing as the district pays off the debt associated with the Bear Tavern project.
Each year, HVRSD will determine the debt-service payment attributable to Bear Tavern and subtract any state debt-service aid received for that portion of the referendum. Hopewell Township will then make a payment toward the remaining amount using revenue it receives through the Hopewell Parc PILOT, subject to the amount of PILOT revenue available under the agreement.
The payments are projected to start relatively modestly, at approximately $259,000 in 2027, and increase in later years as PILOT revenues grow. Over the life of the agreement, the Township’s payments are projected to total approximately $20.75 million.
That expands the Township’s original commitment of approximately $16.1 million. Rather than limiting its contribution to an amount roughly equal to the estimated construction cost of the Bear Tavern addition, the agreement commits PILOT revenues toward the cost of financing that work as part of the district’s bonds.
The arrangement also means the benefit will flow through the district’s annual debt-service budget. The agreement requires HVRSD to use the Township payments to reduce the amount that otherwise would need to be raised through the local tax levy for Bear Tavern debt service.
Chait said the result is straightforward.
“What that money buys is straightforward,” he said. “It gets our students out of trailers and into permanent classrooms and supports the growth of our Township.”
Why a shared-services agreement?
The payments are being structured through a shared-services agreement, a key piece of the arrangement that provides for a reciprocal relationship between the Township and school district rather than simply a transfer of funds.
Responding to questions from MercerMe during Monday’s Board of Education meeting, Treece said attorneys advised that there needed to be something provided by each party as part of the arrangement.
“There needs to be some sort of agreement,” Treece said, explaining in lay terms that there needed to be “some sort of give and take where you’re giving them something, they’re giving you something.”
Under the agreement approved by the Township, HVRSD would make district facilities available without facility-use fees for certain Township governmental, recreational and community activities.
That includes athletic fields and the multipurpose room at Bear Tavern as well as provisions for the use of other district facilities for Township meetings and events, subject to availability, scheduling and district approval.
Treece said the arrangement is not expected to dramatically change how municipal governments use district property. The Township and other municipalities already occasionally use school facilities for meetings or events, she said, with some nominal charges generally associated with costs such as custodial services.
Board President Anita Williams Galiano similarly said shared-services arrangements have existed previously and characterized the fees involved as nominal.
Board member Dr. Alex Reznik also stressed that the agreement does not give the Township unrestricted access to school facilities. He pointed to provisions retaining the Board’s authority over requests for athletic facilities and requiring other uses to be subject to availability and Board approval.
District supportive, but approval still to come
The timing of Monday’s meetings produced an unusual situation: While the Township Committee approved the agreement and subsequently announced the $20.7 million commitment, the Board of Education was simultaneously meeting without the agreement on its agenda.
Treece said the district received the final version late last week and decided against asking Board members to approve a document they had not had sufficient time to review.
“We wanted to take our due diligence, let the Finance Facilities Committee look at it, then the rest of the board look at it before we sign it,” Treece said. “But we’ve been pretty close to it the whole time.”
The district plans to have its Finance and Facilities Committee examine the agreement before bringing it to the full Board, with a vote expected in October.
That procedural delay did not appear to signal disagreement over the substance of the arrangement.
In the Township’s announcement, Treece thanked Chait and the Township Committee for their “ongoing dialogue and steadfast commitment to our schools.”
“As our community grows and new families join, this partnership helps us navigate our new developments together,” Treece said. “We look forward to continuing these vital conversations to keep the Greater Hopewell Valley community and the district moving forward together.”
Williams Galiano similarly described the agreement as an important milestone.
“This agreement reflects the Hopewell Township and Hopewell Valley School District’s shared understanding that growth carries real costs,” she said in the Township release. “I am encouraged by the spirit of collaboration that brought us to this moment and look forward to continuing this vital work together.”
During Monday’s Board meeting, Williams Galiano emphasized that reaching an agreement on Bear Tavern does not end the larger discussion over development, enrollment and the costs associated with growth.
“We are still growing as a community,” Williams Galiano said.
She said the district intends to continue discussions with Hopewell Township as well as Hopewell and Pennington boroughs about the costs that can accompany growth.
“This is not a one and done conversation,” Williams Galiano said. “This was a big, big hurdle, but part of achieving this hurdle is recognizing that we need to have an ongoing conversation.”
The district, she said, remains committed to making sure Monday’s agreement is “not the last conversation with the townships and the boroughs.”
Additional reporting by Diane Carroll
