Local residents who filed a lawsuit against the University late last year stand on unprecedented legal ground, according to legal and policy experts familiar with the case.
The suit's plaintiffs allege that the University obtained zoning rights for its new Arts & Transit Neighborhood by offering increased monetary payments to the local governments in the form of the University’s PILOT. In fact, at the same time as the former Borough and Township governments were evaluating the zoning changes petition in 2012, they were also renegotiating the University’s annual payment in lieu of taxes.
If the petitioners’ suit is successful, both the Borough and Township’s zoning approval would be overturned, revoking the University’s legal ability to build its proposed set of arts buildings on the area in question.
While similar, separate suits were originally filed challenging the Borough and Township zoning ordinances, the petitioners have renewed the charges against the consolidated Princeton, municipal attorney Edwin Schmierer confirmed.
Bruce Afran, the attorney representing the plaintiffs, did not respond to repeated requests for comment.
University Vice President and Secretary Robert Durkee ’69 and Mayor Liz Lempert, who was Mayor-Elect at the time, told The Daily Princetonian in November of last year, when the lawsuit was first announced, that they intended to continue negotiating PILOT agreements.
Durkee told the 'Prince' in November that the lawsuit has "no merit."
Experts on New Jersey state law and university PILOTs said that they did not know of any previous legal action in which a PILOT had been characterized as a bribe.
Matthew Weng, an attorney for the New Jersey League of Municipalities, explained that the plaintiffs would have to prove a causal link between the negotiation of the 2012 PILOT and the votes by the two governments to grant the University’s requested zoning. However, he noted the petitioners may have a hard time proving this, especially because the University has made these payments in the past.
“They’re going to have to introduce some kind of evidence — an email or an overheard conversation or something like that — that indicates that this is not just the normal course of business, that the only reason that they continued the PILOT payments was because they wanted the zoning changes," Weng said.
A New Jersey statute explicitly provides for a PILOT as “a lump sum payment by a governmental entity such as the federal government or a non-profit entity such as a private school make to cover municipality costs and services provided to that governmental entity or school.”
Daphne Kenyon, an expert on PILOT agreements at the Lincoln Institute of Land Policy who is familiar with the Princeton case, echoed Weng’s observation that the charge characterizing the PILOT as a form of bribery is unprecedented.
She noted that in other communities, the perception of a “connection” between a PILOT payment and particular legislation requested by a nonprofit usually existed only as an “implicit nudge.”
“That was a unique wrinkle for Princeton that I hadn’t seen anyplace else,” Kenyon said of the way the PILOT and the zoning came to be seen as codependent. “There has, in other places, been some connection between land-use regulations and PILOTs, but I’ve never seen it so explicit as in Princeton.”
As an example, she cited nonprofits in Boston that usually feel a certain degree of pressure to make PILOTs offsetting the city’s loss of taxable income in order to maintain good relations with the city government.
For Kenyon, bargaining is inevitably a part of a PILOT agreement, which makes it hard to know where a line could be drawn in order to characterize the payment as a bribe.
“There’s just a certain amount of give-and-take, negotiating, sometimes a little bit of griping that goes along the way before a decision is made,” Kenyon explained.
Princeton Council approved the University’s 2013 PILOT contribution on Jan. 14. Both parties have expressed an intention to negotiate a longer-term agreement committing the University to several years of annual payments after University President Tilghman’s successor has been identified.
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