By Sunayana Prabhu
RED BANK – Officials from the Red Bank Regional High School District (RBR) have formally requested a share of the payments in lieu of taxes (PILOT) funds from the borough as part of a proposed transit village plan, which would redevelop the area surrounding Red Bank’s train station and bring in hundreds of new residents.
Denholtz, the official redeveloper designated by the New Jersey Department of Transportation (NJDOT), plans to build high-density residential housing, including up to 400 new apartments.
The RBR Board of Education formally addressed the matter in a resolution adopted Jan. 27, calling for the school’s involvement in any PILOT agreement negotiations. Board members are concerned that, without a share in PILOT funds, the new development will likely bring a rise in student enrollment without sufficient funding to address it.
PILOTs serve as one of the ways municipalities can attract new investments in town, benefiting both current and future residents. Instead of paying property taxes on the improvements, the redeveloper agrees to make annual payments known as “payments in lieu of taxes.” These agreements are often used to encourage developers to pursue and finish certain projects, including those that help meet a municipality’s affordable housing goals.
Given that Red Bank is nearly built-out, the potential transit village redevelopment offers significant opportunities to comply with the state’s fair share housing mandate. Red Bank has recently committed to fulfilling the state’s estimate of 154 new construction units to be built over the next 10 years.
The RBR board argues that, while the borough has the right to enter into a PILOT agreement, the school district is entitled to request participation in the negotiations to secure a fair portion
of the revenue. “Being denied an equitable share of a PILOT agreement to fund the
education of these students would be detrimental to the finances of Red Bank Regional High School and negatively impact all students of the Boroughs of Red Bank, Little Silver, and Shrewsbury,” according to the resolution.
The resolution further adds that the school may have to make “severe budget cuts to offset the funding for public education being diverted by the Red Bank Borough Council via said agreement.”
According to the school board’s resolution, “by default the borough of Red Bank would receive 95% of the said payment and the Red Bank Regional High School district would receive no funding towards the education of any high schoolage students in the hundreds of new apartments.”
Council member Ben Forest, who serves as liaison between the borough council and the district, clarified that while no formal PILOT proposal has yet been presented to the council, he is committed to advocating for equitable distribution of the funds when one is brought forward.
“I will only support a PILOT program if it allows money to go to the schools in a fair way,” said Forest, who had served previously on the local Red Bank Board of Education. He further noted that discussions about the PILOT agreement have taken place among the borough, New Jersey Transit and Denholtz, but no formal proposal has been submitted to the council. Once a proposal is received, he said he will advocate for the school district’s interests.
Red Bank Regional Board President Patrick Noble said, as of Feb. 12, the borough council had not responded to the district’s request for a fair share of the PILOT funds. Noble explained that the school district wanted to make its position clear in advance of any formal PILOT proposal.
“While I don’t believe Denholtz has formally requested a PILOT program yet, we believe it was important to make our position clear now, so when the PILOT request inevitably comes, an agreement between the borough council and RBR Board of Education on funding for the public education of Red Bank Regional students is already in place and ready to go,” Noble said.
Noble also urged the borough council to consider the long-term ramifications of a PILOT agreement that does not include funding for education.
Copies of the resolution have been forwarded to local officials, including Red Bank Mayor Billy Portman, the borough councils of Red Bank, Little Silver and Shrewsbury, as well as representatives from the state legislature.
The article originally appeared in the February 13 – 19, 2025 print edition of The Two River Times.
