Pennington Borough officials on Monday issued a public letter to residents voicing concern over Hopewell Township’s recent $16.1 million pledge to fund a classroom addition at Bear Tavern Elementary School, saying the offer fails to address long-term tax burdens they argue are being unfairly shifted onto borough taxpayers.
The letter, signed by Mayor Jim Davy and the Borough Council, reiterates Pennington’s support for the Hopewell Valley Regional School District but criticizes what they characterize as a conditional and limited funding proposal. The Township’s commitment, they note, is contingent on Pennington and Hopewell Borough withdrawing from their ongoing lawsuit challenging a Payment in Lieu of Taxes (PILOT) agreement tied to the Hopewell Parc housing development on Scotch Road.
“This offer does not sufficiently address the inequity that Hopewell Township has imposed on the taxpayers of the Boroughs,” the letter states, arguing that the PILOT deal removed $332 million in property value from the formula used to calculate school taxes—potentially shifting $25 million in school costs to Borough residents over 30 years.
Hopewell Township’s $16.1 million commitment, unanimously approved on April 14, would come from PILOT revenue generated by the 1,000-plus-unit Hopewell Parc development. Officials say the money will fund a 10-classroom expansion at Bear Tavern Elementary, where temporary trailers have housed students for decades.
“We wouldn’t be doing our job if we didn’t stand up for our taxpayers,” Mayor Davy said in an interview. “The only reason the Borough released a letter was because of how publicly the Township did their announcement last week.”
Davy emphasized that Pennington remains open to dialogue. “I always believe that negotiation or settlement is part of any litigation,” he said.
District officials welcome support, stress urgency
Superintendent Dr. Rosetta Treece called the Township’s pledge “an important step at this critical time for our district.”
“We have a responsibility to preserve the quality of education for our students and maintain the basic needs of our school buildings, like roofs and HVAC,” Treece said. “This situation is only becoming more urgent with time and cannot be addressed without dedicated funding. That is why we are pursuing a bond referendum to secure state aid toward the improvement costs. We depend on Hopewell Township for a funding partnership to further reduce the amount needed from local taxpayers.”
Board of Education President Anita Williams Galiano added, “We have been working to address the needs of our growing communities for years, but we can’t do it alone. We deeply appreciate Hopewell Township’s initial pledge to fund the Bear Tavern expansion. We must listen to our communities and prepare a refocused bond referendum to address only the most vital space and building projects.”
Borough mayors raise broader concerns
Hopewell Borough Mayor Ryan Kennedy acknowledged the Township’s action as “a step in the right direction,” but noted that the offer does not address staffing, transportation, or other operational costs associated with new students.
“This one new development project alone is similar in property value and number of units to the entire Borough of Hopewell yet does not increase the school funding responsibility of the Township by a single dollar,” Kennedy said.
He added that Hopewell Borough is preparing to exit the lawsuit and plans to introduce a resolution at the Borough Council’s May 1 meeting to formalize that step.
“We look forward to continuing to work with the school district, now with the participation of the Township, on solutions that make sense for our students and taxpayers for all of our future planning,” Kennedy said.
Understanding PILOT agreements
PILOT agreements, authorized under New Jersey’s Long-Term Tax Exemption Law, allow municipalities to exempt certain developments from conventional property taxes for a set period—typically in designated redevelopment or rehabilitation areas. Instead of paying property taxes, developers make annual service charges based on a percentage of a project’s revenue.
PILOTs are widely used to make large-scale developments financially viable, especially those including affordable housing. Municipalities benefit by retaining more of the revenue locally—95 percent of PILOT payments remain with the town, while 5 percent goes to the county. School districts, however, do not receive any direct share of PILOT funds, even if enrollment increases because of the development.
Critics say this structure can leave schools underfunded. Proponents argue that PILOTs are a critical tool for meeting affordable housing obligations without overburdening municipal taxpayers.
Township defends PILOT as necessary and fair
Hopewell Township Mayor Courtney Peters-Manning said the PILOT was a necessary part of fulfilling the Township’s state-mandated affordable housing obligations, noting that PILOTs are a standard tool used across New Jersey to incentivize developers.
She also pointed out that before the Hopewell Parc development went in, this was unused land that was not generating revenue for the community.
In a September 2024 statement posted on the Township’s website, Peters-Manning explained that the Hopewell Parc PILOT payments will amount to approximately 93% of what conventional property taxes would have generated, and that the agreement was essential to fund expensive infrastructure improvements—such as water and sewer connections—needed for affordable housing.
“These agreements are necessary… while keeping costs down for township taxpayers,” Peters-Manning wrote. “At the Hopewell Parc development, the cost to bring water and sewer was more than $27 million.”
The PILOT agreement with Lennar explicitly references supporting both the school district and a new community center, according to the Township. Peters-Manning has repeatedly stated that the Township is committed to contributing PILOT funds to school improvements—specifically at Bear Tavern—once the litigation is resolved.
“The Township is committed to giving the school district every dollar they asked for,” Peters-Manning said. “It is a shame this (litigation) is holding up the school district from getting this money.”
District planning continues amid funding uncertainty
As questions around the $16.1 million funding commitment remain unresolved, the school district is continuing its planning efforts. In recent months, officials have hosted public tours of aging school buildings, including Bear Tavern, Toll Gate, and Stony Brook. The next tour is scheduled for April 28 at Hopewell Elementary School at 5:30 p.m., followed by a 6:30 p.m. Board of Education meeting that will include a public hearing and vote on the school budget.
District leaders are also preparing for a possible referendum this fall. While the exact scope has yet to be finalized, officials say there is still time to determine whether the Bear Tavern expansion will be part of the next proposal.
