One curious aspect of the revaluation plan, as noted in the first sentence of the letter, is that it will apply only to "taxable real estate". That's interesting since there is one large piece of "non-taxable" commercial real estate in Hillsborough - the VIP Industrial Park located at the old South Somerville Depot on Route 206, north of Docherty Park.
The VIP Park is not taxable because, although the leaseholder - who signed a 35 year lease in 2004 - is running a commercial warehouse and transload operation on the site, the land is owned by the federal government.
In 2005, the township committee came to an agreement with the leaseholder whereby Hillsborough would not go to court to try to collect taxes on the property if the VIP Industrial Park entered into a PILOT (Payment In Lieu Of Taxes) Program. The agreement calls for Hillsborough to receive a payment of $300,000 per year for the duration of the lease, which can go up or down based on the square footage of the property currently being utilized for commercial purposes, but can not fall below $200,000.
To tell you the truth, I have never been fully satisfied as to how the $300,000 payment was determined. For one thing, it is supposed to represent the total amount of property tax that would be paid if the property was on the tax rolls. But if that is the case, shouldn't the school system be receiving 65% each year? And what about the county's nearly 20%? In the current scenario, the municipal government receives the entire amount.
Now, it may be that $300,000 is a fair and accurate figure - or even an amount that trends in favor of Hillsborough - but I was kind of looking forward to the 2010 revaluation to find out for sure. With the notice this week that the revaluation will only include taxable real estate, an opportunity to discover the true "income producing potential" of the depot is being missed.