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Amending Chapter 2, of the Code of the Township of South Brunswick, Establishing Escrow Requirements for the Review and Administration of Applications for Long Term Tax Exemptions
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WHEREAS, the Long Term Tax Exemption Law, N.J.S.A. 40A:20-1 et seq., authorizes municipalities to grant long-term tax exemptions to qualifying redevelopment projects and to enter into financial agreements providing for annual service charges in lieu of conventional property taxes; and
WHEREAS, the Township incurs professional costs in connection with the review, evaluation, negotiation and administration of applications for long-term tax exemptions and related financial agreements, including costs associated with financial, legal, fiscal, economic and other professional review (the “Professional Services”); and
WHEREAS, in that regard the Township has required applicants to establish and maintain escrow accounts to reimburse the Township for reasonable costs of Professional Services incurred in connection with such applications and related matters; and
WHEREAS, the Township Council therefore now formally amends the Township Code to establish procedures governing the collection, maintenance, replenishment and refund of such escrow deposits.
NOW, THEREFORE, BE IT ORDAINED by the Township Council of the Township of South Brunswick, County of Middlesex, New Jersey that:
I. Chapter 2, Article VI, Division 5, Secs. 2-827 -2-840. - Reserved
II. Chapter 2, Article VI, Division 6 - Escrow Requirements for Long Term Tax Exemptions
III. Chapter 2, Article VI, Division 6, Sec. 2-827.
A. An initial escrow payment of $25,000, along with any other application fees and other charges will be due and payable at the time of a proposed redeveloper requests Township review of its application for a Long Term Tax Exemption.
B. All fees will be collected by the Finance Department and transmitted to the proper account of the Township of South Brunswick in a manner as required by law.
C. Any replenishment of the escrow and any additional fees shall be paid by the applicant immediately when notified.
IV. Chapter 2, Article VI, Division 6, Sec. 2-828.
A. The Finance Director or such subordinate officials as may be designated to act on his behalf of the Township of South Brunswick shall make all of the payments to entities providing Professional Services rendered to the Township of South Brunswick or approving authority for (the “Professional Service Providers”) review of applications including but not limited to: review and preparation of (PILOT) cost benefit analysis reports; financial agreement forecast reports; revenue distribution study reports; reports suggested by the New Jersey Municipal Tax Abatement Handbook; municipal fiscal and economic impact analysis; community and infrastructure impact reports; a tax shift calculation; a report regarding gross revenue vs. net income audit triggers; discussion and recommendation for a market based escalation clause; compliance with Local Finance Notice 2025-12; public infrastructure and “off-site” giveback report; other documents that may be required; and inspection of improvement. An applicant shall be responsible to submit additional escrow deposits, if required, to the Township of South Brunswick for these Professional Service Charges as well as for opinions by third party independent consultant presentations regarding analysis of the application; review and preparation of documents as required; inspections; enforcement of (PILOT) requirements; and monitoring of developments under construction, by Professional Service Providers (collectively “Professional Service Charges”).
B. The applicant shall be required to deposit additional escrow funds when the escrow has been depleted to 20% of the original escrow amount up to the original $25,000 or such lesser amount as determined to be reasonable at that stage of the review by the Township Manager or their designee.
C. If an escrow account contains insufficient funds to cover the costs of charges for review and evaluation of the application, the Township Manager or such subordinate officials as may be designated to act on his behalf shall provide the applicant with notice of the insufficient balance notifying the applicant to post a deposit to the account in an amount to be stated by the Township.
D. The Professional Service Providers shall provide the Township of South Brunswick with a certificate of insurance that indicates errors and omissions insurance coverage with the Township of South Brunswick being designated an additional insured.
E. The recommendation from the Professional Service Providers shall clearly state a best practice procedure for the Township of South Brunswick to perform monitoring compliance with the Long Term Tax Exemption Law should the application be approved, including verification of a strict execution of the mandatory statutory phase-in schedule where applicable and collection of Annual Service Charge payments.
F. Ninety (90) days after the conclusion of the Township's evaluation of the Long Term Tax Exemption and approval if applicable, the Township shall issue a refund for any unused funds in escrow that remain.
V. Chapter 2, Article VI, Division 6, Secs. 2-829 -- 2-840. - Reserved.
VI. The aforementioned recitals are incorporated herein as though fully set forth at length.
VII. All ordinances or parts of ordinances inconsistent herewith are hereby repealed to the extent of such inconsistency.
VIII. If any section, paragraph, subdivision, clause, sentence, phrase or provision of this Ordinance is declared unconstitutional or invalid by a court of competent jurisdiction, such decision shall not affect the remaining portions of this Ordinance.
IX. A copy of this Ordinance shall be available for public inspection at the offices of the Township Clerk.
X. This ordinance shall take effect in accordance with applicable law.
The above ordinance was introduced and passed on first reading at a meeting of the Township Council of the Township of South Brunswick held on October 7, 2026. It will be considered on final reading and final passage at a meeting of the Township Council of the Township of South Brunswick to be held at the Municipal Building, 540 Ridge Road, Monmouth Junction, New Jersey at 6:00 p.m. on October 21, 2026. At the time of second reading and final passage, any person having an interest therein will be given an opportunity to be heard.