By Sunayana Prabhu
RED BANK – Borough officials have approved a new financial agreement with the developer of the Locust Landing apartment complex that will enable the borough to claim up to 40 credits toward its fourth-round affordable housing obligation.
The borough council passed an ordinance at its July 10 meeting to amend the long-term Payment in Lieu of Taxes (PILOT) agreement with the contract purchaser and developer of the property, WCP Locust Landing MM LLC. The updated agreement reduces the developer’s annual payments during a planned rehabilitation and flood-elevation phase.
Locust Landing, located at 105 Locust Ave., is a 40-unit family rental complex built in the 1960s for households earning less than 50% of Monmouth County’s median income. The property has operated under a PILOT agreement since 1999, which was originally set to expire in November 2028.
Under the prior agreement, the developer paid 9% of annual gross rental income to the borough in PILOT payments. The new terms lower that rate to 1% for an estimated 24 to 36 months while the buildings are elevated and rehabilitated to standard flood zone codes. Once the work is complete, the borough will revise PILOT payments, increasing them to 4%, which is expected to remain in effect for 40 years, according to the fourth round housing plan endorsed by the council June 26.
Borough attorney Greg Cannon said the reduced payment structure will support critical structural improvements at Locust Landing, including elevating the buildings to comply with updated floodplain regulations. This is more cost-effective and feasible under current flood standards, compared to the complete demolition of the buildings and rebuilding. “New construction cost is prohibitive. We will not be able to do this transaction to keep it affordable housing if it has to be demolished and rebuilt,” said Cannon.
The amended agreement allows the borough to receive affordable housing credits for nearly all 40 units under New Jersey’s Fair Share Housing requirements. According to Cannon, Red Bank had previously only been credited with six units at Locust Landing, while the remaining 34 units were counted toward Middletown’s affordable housing obligation under a now-defunct Regional Contribution Agreement.
“Transferring affordable credits is no longer legal under affordable housing law,” Cannon said. “Back in the 1990s, you could accept money in return for transferring credits for affordable housing, which they (developers) did with Middletown under the PILOT that’s being reduced.”
“It’s a no-brainer to put in a new and improved PILOT for this affordable housing,” resident Drew Logan said. “Let’s get those credits back from Middletown.”
“I would not say we should use PILOTS in every instance, but in this case, everybody in that development really needs a home, and it’s close to the elementary school. We have a little park across the way. It’s really important,” said resident Amy Goldsmith.
The project’s planned improvements follow years of flood-related damage, including destruction caused by Super Storm Sandy in 2012. According to borough records from 2014, the storm destroyed 16 units and caused over $100,000 in infrastructure damage. The reduced PILOT payments are intended to support the costs of elevating the buildings to meet updated floodplain regulations and ensure the long-term sustainability of the development.
The financial transaction with reduced annual payment from the developer in exchange for housing credits will add to Red Bank’s fourth-round affordable housing plan, adopted last month to meet the state-mandated June 30 deadline. The plan outlines zoning strategies to meet the borough’s affordable housing requirements through 2035. The state has assigned Red Bank a rehabilitation obligation of 54 units and a new construction obligation of 145 units. The 40 credits from Locust Landing will contribute significantly toward the borough’s rehabilitation target.
Renovation and elevation work at Locust Landing is expected to begin later this year, pending state review and permitting. The Fair Haven-based developer, WCP Locust Landing MM LLC, is tasked with the rehabilitation of the property.
The article originally appeared in the July 24 – July 30, 2025 print edition of The Two River Times.
