Hackensack Says PILOT Audit Found at Least $5.4 Million in Unclaimed Revenue

The City of Hackensack announced on June 25, 2026, that an audit of long-term tax-exemption agreements had identified at least $5.4 million in unclaimed Payments in Lieu of Taxes, commonly called PILOT revenue.

According to the City, the review examined developer-submitted financial audits and the terms of individual financial agreements covering several luxury rental developments. The City said at least 13 developments were in default and that three additional developers had failed to provide required annual financial audits.

Hackensack issued formal default notices and gave the affected developments until July 28, 2026, to clear outstanding balances, pay applicable interest, and submit missing financial documentation. The City warned that continued noncompliance could lead to proceedings to terminate the relevant tax exemptions. 

However, the City had not published a complete post-deadline accounting, a list of the affected properties, or the underlying audit report on the public pages reviewed for this article as of August 5, 2026.

Hackensack PILOT audit at a glance

These figures come from the City’s June 25 announcement and should be understood as the municipal government’s account of its audit and enforcement process. 

What is a PILOT agreement?

A PILOT is a payment made under a financial agreement in place of ordinary property taxes.

Under New Jersey’s Long Term Tax Exemption Law, an approved redevelopment project may receive a limited exemption from conventional property taxation. In exchange, the urban renewal entity enters into a financial agreement with the municipality and pays annual service charges in accordance with the agreement and applicable law.

The exemption and payment structure is intended to support qualifying redevelopment projects. It does not mean that a property pays nothing to the municipality.

The New Jersey Department of Community Affairs maintains a Municipal Tax Abatement Toolkit that includes:

• The Long Term Tax Exemption Law
• A municipal tax-abatement handbook
• A PILOT database and viewer
• Financial forecasting resources
• Reporting templates for municipalities 

Each development across Hackensack may have a different agreement, payment formula, duration, and compliance requirement. The specific financial agreement must therefore be reviewed before drawing conclusions about what any individual property owes.

What did Hackensack’s audit examine?

The City said its review compared two categories of information:

1. Financial information and annual audits submitted by developers
2. The payment and reporting obligations contained in each development’s financial agreement

According to the City, the audit identified overdue balances that were heavily influenced by unpaid year-end adjustments, described as “true-up” payments. These adjustments may be necessary when a development’s actual annual revenue exceeds the estimate used to calculate earlier payments. 

The City said some balances dated back to 2018 and that the announced $5.4 million remained a conservative estimate because certain financial filings had not yet been submitted. 

The public announcement did not include:

• The audit report
• A development-by-development calculation
• Copies of the default letters
• The name of every affected developer
• The amount attributed to each property
• Responses submitted by the developers

The announced total should therefore not be divided equally among 13 developments or attributed to any particular Hackensack building without additional documentation.

What payments had already been recovered?

Hackensack said it began contacting noncompliant developers before issuing the formal June notices.

According to the City:

• One developer made a $1 million payment.
• Another developer agreed to pay nearly $500,000 in overdue amounts.
• Several developers did not respond to the City’s initial warning letters.

The June 25 announcement does not identify the two cooperating developers or explain whether their payments are included within the stated $5.4 million total. 

Therefore, it remains unclear from the published information whether $5.4 million represents:

• The original amount identified before the two payments
• The remaining balance after the payments
• A combination of confirmed and estimated amounts
• A baseline that may rise after additional audits are received

That distinction should be clarified in any future City update.

What happened after the July 28 deadline?

The City’s June announcement gave defaulting developments until July 28, 2026 to:

• Pay overdue balances
• Pay applicable interest
• Submit missing financial records
• Cure alleged defaults under their agreements

The publicly posted July 28 City Council docket did not include a specific PILOT termination resolution or a named action against one of the affected developers.

This does not establish that no payments, negotiations, notices or legal actions occurred. Matters involving anticipated litigation, contractual negotiations or attorney-client privilege may not appear as detailed public agenda items. The July 28 docket included a general executive-session category covering pending or anticipated litigation and contract negotiations.

As of August 5, the City’s public newsroom still displayed the June 25 audit announcement but did not show a separate article providing a complete post-deadline result. 

The current public record therefore does not confirm:

• How many developers paid by the deadline
• How much additional money was collected
• Whether payment plans were negotiated
• Whether missing audits were submitted
• Whether any tax exemptions were terminated
• Whether the City commenced litigation
• Whether developers dispute the calculations

Why could a PILOT agreement be terminated?

Hackensack said the formal notices cited material breaches of the developments’ financial agreements under New Jersey’s Long Term Tax Exemption Law.

The City stated that, if a developer failed to cure the alleged default, it could begin the process of terminating the tax exemption. The property could then return to the conventional property-tax system.

Termination should not be treated as automatic.

The exact enforcement process would depend on:

• The terms of the individual financial agreement
• The type and duration of the alleged default
• Applicable notice and cure provisions
• Municipal action
• Potential negotiations
• Administrative or court proceedings
• The developer’s legal response

An announced deadline does not by itself prove that an exemption has been terminated.

Why does this matter to Hackensack residents?

Municipal revenue

If the City’s calculations are correct, recovering overdue PILOT payments could increase the amount of revenue available to Hackensack.

The City said the recovery effort was part of a broader plan to improve municipal financial oversight and protect local taxpayers.

However, the recovery of revenue does not necessarily mean that property tax rates will fall. Municipal tax rates also depend on the City budget, assessed values, school and county levies, revenue forecasts and other financial decisions.

Oversight of redevelopment agreements

The issue highlights the importance of monitoring financial agreements after a development has been completed and occupied.

Approving a PILOT agreement is only one part of the process. Municipal oversight may also require:

• Annual developer reporting
• Verification of project revenue
• Recalculation of annual service charges
• Collection of true-up amounts
• Interest and penalty enforcement
• Tracking agreement expiration dates
• Confirmation that legal conditions remain satisfied

Transparency around large rental developments

Hackensack has experienced substantial rental and redevelopment activity. PILOT agreements affect how qualifying properties contribute to municipal revenue during the exemption period.

Residents interested in living in Hackensack, NJ may reasonably want to know:

• Which developments have PILOT agreements
• How long each agreement lasts
• How annual payments are calculated
• Whether required audits are current
• How much has been billed and collected
• Whether a property is in compliance
• What happens when an agreement expires or is terminated

New Jersey’s Department of Community Affairs now provides a PILOT database and related municipal reporting resources, although individual financial agreements and local payment records may still be needed to complete the property-level picture.

Does this mean the developments paid no taxes?

No.

The City’s allegation concerns amounts reportedly owed under PILOT financial agreements. A PILOT property generally makes annual service-charge payments instead of paying ordinary property taxes on the exempt project under the conventional tax structure. 

The issue is therefore not accurately described simply as “developers paid no taxes.”

A more precise description is:

Hackensack says certain developers failed to pay the complete amounts or provide the financial reports required under their PILOT agreements.

Does this directly affect tenants?

The City announcement does not identify any immediate change to tenant leases, monthly rents, building operations, or occupancy for those browsing Hackensack homes for rent.

PILOT agreements are generally financial agreements between the municipality and the urban renewal entity responsible for the approved redevelopment project.

Tenants should not assume that:

• Their building is one of the developments involved
• Their rent will increase or decrease
• Their lease will be affected
• Their building’s tax exemption has been terminated
• Their landlord has been found legally liable

Those conclusions would require property-specific documentation and, in some cases, a completed legal or administrative process.

Does this affect Hackensack property taxes?

Potentially, but the current impact cannot be calculated from the information released.

Additional collected revenue could improve the City’s financial position. Returning a property to conventional taxation could also change how that property contributes to municipal, county, and school levies. This complex dynamic is an important consideration for buyers searching for Hackensack homes for sale or exploring broader investments across Bergen County real estate.

But the available announcement does not provide enough information to calculate:

• The effect on an individual homeowner’s tax bill
• The effect on the municipal tax rate
• The amount eventually recoverable
• Whether the money will be treated as recurring or one-time revenue
• How much would be allocated to municipal services
• Whether any PILOT termination will occur

Any claim that the audit will directly reduce property taxes would currently be speculative.

Commercial property investors looking into Hackensack commercial properties for sale or evaluating commercial spaces for lease in Hackensack should continue to review specific development agreements as part of their due diligence.

A discrepancy in the City’s published figures

The City’s detailed June 25 announcement refers to at least 13 separate developments falling into default. 

A separate July 1 City article refers to 12 developers in default. 

These statements may be reconcilable if:

• One developer controls multiple developments
• The later statement excludes a property that cured its default
• “Developers” and “developments” were used differently
• One of the figures was stated imprecisely

The public materials reviewed do not explain the difference. This article therefore uses the more detailed June 25 description while noting that the City’s communications do not use one consistent count.

What information should Hackensack publish next?

A complete public update would ideally include:

1. The final amount identified by the audit
2. The amount collected to date
3. The names of affected urban renewal entities
4. The properties associated with each agreement
5. The amount reportedly owed under each agreement
6. The years covered by each calculation
7. The status of missing annual audits
8. Whether the developers dispute the amounts
9. Any payment plans or settlements
10. Any exemptions that have entered termination proceedings
11. Whether the underlying audit will be released
12. How recovered funds will be recorded in the municipal budget

The City’s Finance Department currently publishes annual audits, budgets, financial statements and related financial materials, making that section a relevant place to monitor for future documentation. 

Current status

Frequently Asked Questions

What is a PILOT?

PILOT stands for Payment in Lieu of Taxes. Under a qualifying financial agreement, a redevelopment project may receive a limited property tax exemption and instead make annual service charge payments to the municipality.

How much money does Hackensack say was unclaimed?

The City announced that its audit identified at least $5.4 million. It described that figure as a conservative baseline because some required financial filings were still missing.

How many developments were involved?

The detailed June 25 announcement referred to at least 13 developments. A separate City article referred to 12 developers. The City has not publicly explained the difference.

Which apartment buildings were named?

The City’s public announcement did not list the affected properties or urban renewal entities.

Did every development owe the same amount?

There is no evidence of that. The announced total should not be divided equally among the developments.

Did the developers miss ordinary property-tax payments?

The City’s allegations concern payments and reporting requirements under PILOT financial agreements, not ordinary property-tax bills.

Were any PILOT agreements terminated?

The City warned that termination proceedings could begin after the July 28 deadline. No completed termination was confirmed in the public sources reviewed as of August 5.

Will the recovered money lower homeowners’ taxes?

That cannot currently be determined. The effect would depend on the final amount recovered and future municipal budget decisions.

Does the issue affect tenants?

The City announcement does not identify an immediate effect on leases, rents, or occupancy. For questions regarding local housing or real estate inquiries, you can reach out via our contact page.

Sources and References

[1] City of Hackensack, June 25, 2026: Audit Uncovers $5.4 Million in Unclaimed PILOT Revenue

The City’s detailed announcement describing the audit, alleged defaults, missing reports, amounts already recovered, and July 28 compliance deadline. (The City Of Hackensack)

[2] City of Hackensack, July 1, 2026: A Year of Course Correction

A subsequent City article discussing the audit and referring to 12 developers in default. (The City Of Hackensack)

[3] New Jersey Department of Community Affairs: Municipal Tax Abatement Toolkit

Official state resources concerning long-term tax exemptions, PILOT financial agreements, reporting and the statewide PILOT database. (NJ.gov)

[4] City of Hackensack Finance Department

Official repository for municipal budgets, annual audits, and financial statements. (The City Of Hackensack)

Disclaimer

This article is provided for general informational and local real-estate research purposes only. It does not constitute legal, accounting, tax, investment, municipal-finance or real-estate advice.

The statements regarding unpaid or unclaimed PILOT revenue are based primarily on announcements from the City of Hackensack. The underlying audit, individual calculations, default notices and developer responses were not publicly available in the sources reviewed.

The City’s announcement represents the municipality’s account of an ongoing financial and enforcement matter. An allegation of default does not, by itself, constitute a final court judgment, admission of liability or completed termination of a financial agreement.

BergenRealEstate.com has not independently audited the affected developments and does not identify any individual property as delinquent unless supported by an official property-specific record.

Payment amounts, outstanding balances, interest calculations, agreement status, and enforcement proceedings may change through:

• Submission of missing financial records
• Revised calculations
• Negotiations
• Payment agreements
• Administrative action
• Litigation
• Settlement
• Termination or reinstatement of an exemption

Readers should consult the City of Hackensack, the relevant financial agreement, municipal records, and appropriately licensed legal or financial professionals before making decisions based on this information.