CITY LAUNCHES FISCAL CLEANUP TO CLAW BACK MILLIONS FOR TAXPAYERS; FORCES DEVELOPERS TO PAY THEIR FAIR SHARE

Mayor Caseen Gaines and the Hackensack City Council announced today that a top-to-bottom audit examining both the self-reported audits provided by developers and the terms of each individual Financial Agreement with the City has uncovered at least $5.4 million in unclaimed revenue from delinquent luxury rental developments that were granted tax exemptions by the previous administration.

The audit revealed that under the previous administration’s leadership, the City systematically mismanaged oversight of these corporate tax exemptions—commonly known as Payments In Lieu Of Taxes (PILOTs)—allowing at least thirteen separate developments to fall into default, shortchanging local taxpayers. Furthermore, an additional three developers never filed the statutorily required audits, making it impossible for the City to complete even a baseline financial analysis of their finances for the entire length of time the properties have been leased and occupied.

The overdue balances—calculated directly from the developers’ own reported numbers plus the applicable interest rate for back-owed PILOT revenue—are heavily driven by unpaid “true-up” payments. These are the mandatory year-end adjustments required when a building generates higher annual revenue than originally estimated, meaning the developer owes the City an additional payment to make up the difference. In several cases, these outstanding balances date back to 2018.

City officials noted that the $5.4 million total remains a conservative baseline estimate. New Jersey state law mandates that developers must provide a certified annual audit by April 1 for the previous calendar year, yet multiple non-compliant developments have still failed to submit their mandatory 2025 filings.

Shockingly, the audit revealed that one development has neglected to provide its required annual paperwork for the past two consecutive years, and another has withheld submissions for the past three consecutive years. These discrepancies are anticipated to result in even more unclaimed PILOT revenue uncovered for the City of Hackensack once full compliance is established.

“The Labrosse administration repeatedly championed PILOTs as the solution to Hackensack’s financial problems, all while failing to enforce the very agreements they signed and leaving millions of dollars on the table,” Mayor Caseen Gaines said. “It is astonishing and offensive that while everyday people are required to pay their taxes on time or face harsh penalties, the same rules didn’t apply to developers on the already-reduced payments they agreed to make.”

Beyond the millions in missing revenue, the City’s comprehensive audit discovered other structural violations regarding the signed financial agreements, and in some cases, explicit violations of New Jersey state law.

Under the leadership of the current City Council, Hackensack’s aggressive enforcement campaign has already delivered massive financial victories through a multi-stage review process. Prior to escalating to formal legal action, the City initiated its enforcement sweep, providing all non-compliant developers an initial opportunity to clear their debts voluntarily through warning letters issued in April. Those efforts immediately yielded major results, with one developer hand-delivering a $1 million check to City Hall and a second formally agreeing to remit nearly half a million dollars in overdue back payments.

However, while some developers cooperated right away, several others completely failed to respond to the City’s initial outreach. Formal notices were issued on June 25, 2026 to the non-compliant developers. The default notices cite material breaches of the developments’ Financial Agreements under New Jersey’s Long-Term Tax Exemption Law.

The City has given all defaulting developments a strict 30-day window—with a hard deadline of July 28, 2026—to completely clear their overdue balance, with interest, and submit all outstanding financial documentation. Should developers fail to comply, the City will begin the formal process of terminating their tax exemptions, as permitted by both state law and the terms of the agreements themselves. This would ultimately return the property to standard, higher municipal tax rolls.

The City Council initiated this aggressive recovery of delinquent corporate revenue as part of a broader, council-led mission to stabilize municipal finances and permanently protect local taxpayers without compromising resident services and community investments.

“True accountability requires both balancing the books and making sure Hackensack works for the people who actually live here,” Deputy Mayor Agatha Toomey said. “Our predecessors left us a financial mess, but we are fixing it by putting strict oversight in place. We have a responsibility to our fellow residents to make sure developers finally pay what they owe.”

Moving forward, officials are committed to requiring that developers pay all that they owe—in full, on time, every time. By ensuring all partners hold up their end of the deal, the City Council is reclaiming vital resources to invest directly back into local families, neighborhood parks, and smooth streets, building a fairer, more affordable, and more prosperous future for all Hackensack residents.