The Morristown council on Tuesday approved a 30-year tax break and authorized a complex funding agreement for M Station, an office redevelopment project that officials said may take a dozen years to complete.

Attributing these accommodations to the pandemic, Mayor Tim Dougherty hailed M Station as an example of “great leadership” and “a great project for the future” that will bring jobs and stimulate the local economy.

By a 6-1 vote, the governing body approved a PILOT– short for “Payments in Lieu of Taxes”–intended over 30 years to quadruple revenue the town had been receiving from the former Midtown Shopping Center strip mall at Spring and Morris streets.

Additionally, the council endorsed issuing up to $8.8 million bonds to make possible a traffic roundabout and other off-site improvements that had been promised by shopping center owner Scotto Properties and SJP Properties, the project’s redevelopers.

M Station rendering, Morris Street view, June 4, 2020. Screenshot by MorristownGreen.com

They propose nearly 400,000 square feet of offices and retail in two buildings, with a public promenade and plaza, parking garage and other amenities.

Scotto and SJP have agreed to complete the first building and all traffic work by October 2022. If fully built, M Station could bring up to 1,400 jobs into town, and boost local restaurants, businesses and charities, according to town Administrator Jillian Barrick.

The PILOT, reviewed by town financial consultant Robert Powell, cuts out taxes for schools and Morris County. Powell said COVID-19 has changed the economic landscape to the point where the project probably would not get built without the tax break.

It’s at least the seventh PILOT granted to Morristown redevelopments over the last decade.

Councilman David Silva said the town is exploring sharing some of its M Station payments with the Morris School District.

Silva did not elaborate, during a busy two-and-a-half hour virtual meeting that also saw the council: Support a drive to remove a slavery clause from the 13th Amendment; back the acting police chief in a dispute with the PBA; and amend the town’s “pay to play” ordinance, to ban political contributions from redevelopers.

Approved unanimously, the pay-to-play measure sparked a sharp exchange between attorneys for a developer and the town.

Linda Cahn, who is suing the town over a disputed project on Speedwell Avenue, cited a state bribery investigation and said the amendments don’t go far enough to preclude “political corruption” in town.

Town Attorney Vij Pawar termed the lawsuit frivolous, and called written grievances from Cahn “absurd…unprofessional…plain and simple rubbish” that overlooked provisions of the 2009 pay-to-play ordinance covering professionals who do business with the town.

VOTING NO

Casting the sole vote against the M Station PILOT and bond deal, Councilman Robert Iannaccone said the redevelopers used the pandemic to shift costs of their promised traffic improvements to the town.

Councilman Robert Iannaccone voices objection to M Station deal, at Morristown Council virtual meeting, Oct. 13, 2020. Screenshot by Kevin Coughlin

A chunk of the town’s PILOT revenue will go towards bonds to help pump up the redevelopers’ equity stake, which they now contend is necessary to attract investors, Iannaccone said.

“Basically with this financial arrangement, we’re assuming the obligation to pay for those off-site improvements via these bonds and the repayment of the principal and interest,” said the councilman, an attorney who is familiar with finance as CEO of a Newark hospital.

Council members only received the updated redeveloper agreement hours before Tuesday’s meeting, not enough time to scrutinize it, Iannaccone said.

He also noted the town planning board signed off on M Station before it was split into stages that could take 12 years to complete–if it’s ever completed.  The board should review the revised plans, he said.

Morristown Council, Oct. 13, 2020. Screenshot by Kevin Coughlin

Public participation was hindered, Iannaccone added, when planning board and council deliberations moved online in March because of COVID-19.

Several residents, most notably former zoning board Chairman Cary Lloyd,  called into Tuesday’s meeting sharing Iannaccone’s concerns.

“It is trying times, but I don’t believe we need to go to a 30-year tax abatement,” said Lloyd, who otherwise supported the project.

Office buildings are a risky bet for a post-COVID world, added resident John Williams. And if things work out and the economy rebounds, the PILOT could amount to a huge windfall for the developer, he said.

Defending the deal, Council President Stefan Armington said opposition may boil down to fiscal semantics. “I see that…the project is paying for the revenue bonds,” he said.

The mayor bristled at Iannaccone’s characterization of M Station.

“There is no way, no way in the world, that if we delay this project, this project is going to go forward. And this is a good project for Morristown,” Dougherty said.

Mayor Tim Dougherty praises M Station agreement, Morristown Council, Oct. 13, 2020. Screenshot by Kevin Coughlin

“Yes, did COVID change it? Absolutely. It changed everything in the world. And those who can’t see that, that can’t understand that, it’s just beyond my comprehension.

“So when Mr Iannaccone sits there and says we need more time, well, we’ve been at this since 2004,” the mayor said, referring to the property’s original designation as an area needing redevelopment.

“It is now 2020. We have an amazing deal on the table. I hope the council sees the opportunity here, and the benefits to this community so far outweigh any negative, that it would be beyond my comprehension if there was another no vote,” Dougherty said.

‘WE HOPE THERE’S NOT THAT LONG A WAIT’

The council’s agreement with M Station’s re-developers requires completion of  the traffic roundabout and all other traffic improvements during Phase One, which includes a six-story office building for anchor tenant Deloitte, the Big Four accounting firm, to be finished by October 2022.

“The cost of all these developments are borne by the developer,” said the town’s redevelopment attorney, John Inglesino.

Phase Two–including a seven-story office building, completion of a parking deck and construction of a public plaza–must start in eight years and be concluded three years later, he said.

“We hope there’s not that long a wait. But there may be,”  Inglesino acknowledged.

A passive-recreation park must be installed by the redevelopers, at an estimated cost of $200,000, if construction of Phase Two (dubbed M Station West) does not start in one year.

About $400,000 in landscaping will be required if construction does not begin in seven years. Money will be placed in escrow for the public improvements, with penalties should the project go belly-up. If the redevelopers default during Phase One (“M Station East”), the town can revoke the PILOT and impose full taxes, Inglesino said.

The redevelopers will produce a “transportation management plan,” pay for town planning and engineering, and contribute $2.5 million to the town’s affordable housing trust fund.

The town’s issuance of up to $8.8 million in Redevelopment Authority Bonds must pass muster with Morris County’s Local Finance Board. If it does, the council is likely to give its final approval to the funding plan at its meeting of Nov. 24, 2020, Inglesino said.

Dougherty lavished praise on his Barrick, his administrator, who insisted Morristown’s desirability will attract tenants to the proposed second office building, so far unleased.  The mayor also thanked Powell, the financial consultant, and M Station attorney Frank Vitolo.

Other council members echoed the mayor’s sentiments about M Station.

“It’s a hard decision…but I think it’s a good decision for the town,” said Council Vice President Toshiba Foster.

“A lot of people like to complain about it…they’ve had an opportunity for months now to call in,” said Councilwoman Sandi Mayer, calling M Station good in the long term.

Councilman Michael Elms called it a tough decision, asserting that “COVID has changed everything.”

“We really really took our time to ask questions,” said Councilwoman Tawanna Cotten. “The end goal was to make sure this would not be a burden on our taxpayers.

Silva said “there is risk in everything in life,” but concluded “there is no loss in this.”

Separately, the mayor issued a proclamation honoring Michael Noonan, a lifelong resident who has retired after 32 years as municipal judge.

Noonan said his boyhood paper routes helped prepare him for the bench. “I’ve been everywhere in this town…I know when (defendants) are telling me the truth,” he said.

He said the Morristown Green compares with any charming place in the world, including Paris. His next stop is Colorado, where he and his wife Barbara plan to watch their two grandchildren grow up.

“I highly recommend, sometimes, to stop and smell the roses,” Noonan told the council.

This story has been updated with additional details from the meeting.

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