New Jersey appeals court bars Elizabeth from ending a mixed-use project's tax exemption by ordinance
An unpublished ruling holds that Elizabeth's repeal of three tax-exemption agreements for a mixed-use redevelopment project impaired the developer's contracts, and sends the remaining disputes to arbitration.
Developers whose apartment and mixed-use projects rest on a payment-in-lieu-of-taxes agreement gained a measure of protection against a town simply repealing the deal. On September 29, 2026, the Appellate Division held in Jersey Walk E Jersey Urb. Renewal, LLC v. City of Elizabeth, No. A-3871-24 (N.J. Super. Ct. App. Div. Sept. 29, 2026), that an Elizabeth ordinance rescinding three financial agreements made under the Long Term Tax Exemption Law, N.J.S.A. 40A:20-1 to -22 (the “LTTEL”), violated the Contracts Clause of the New Jersey Constitution, N.J. Const. art. IV, § 7, ¶ 3.
Jersey Walk E Jersey Urb. Renewal, LLC v. City of Elizabeth, No. A-3871-24 (N.J. Super. Ct. App. Div. Sept. 29, 2026) (unpublished); N.J.S.A. 40A:20-13; N.J. Const. art. IV, § 7, ¶ 3