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Contract language at heart of development dispute in Washington Twp.

The six-year-old contract says a tax deal "may" be necessary to make housing, commercial project come to life.

Will a few select words in a redevelopment contract signed in 2008 come back to haunt Washington Township? Have they already?

Elected officials in the town Wednesday night again stifled a proposed tax deal for a redeveloper planning to build hundreds of apartments and townhomes — plus shops and offices — when council decided 3-2 to table a vote on the matter until 2015. The action was praised by a crowd of residents agitated by the deal for the Washington Square project.

But the move leaves Washington Township in a precarious situation: Had council approved the proposed 30-year tax deal, it would have satisfied a settlement in a lawsuit brought against the municipality by the redeveloper in 2013.

Now, a lengthy and costly legal battle may be brewing. An attorney for the redeveloper, known as Washington Square Partners, said his clients were "not waiting."

"The township is in the position we are in today because of the agreement that was executed and approved in 2008," Township Business Administrator Robert Smith said earlier this week. "It was a different mayor and it was a different council."

The six-year-old contract states: "Redevelopment Entity, Township, and Redeveloper acknowledge that Redeveloper may require a Payment In Lieu of Taxation or a Tax Abatement in order to make the Project feasible, without which, Redeveloper may not be able to proceed under this Redevelopment Agreement."

State Assemblyman Paul D. Moriarty (D., Gloucester), the township's mayor through 2008, called the redevelopment agreement "standard."

"To put in a line that says they may need this is kind of standard operating procedure," Moriarty said during an interview Wednesday afternoon. "They should be used to bring large development that can go other places."

The phrasing was deliberately vague, he said, and didn't provide for any specifics about the payment-in-lieu-of-taxes (PILOT), or its duration. "And they're used everywhere."

Last year, Mayor Barbara Wallace raised issues with the use of a PILOT, and council rejected the proposed agreement with a 3-2 vote, prompting the redeveloper's lawsuit.

"Nothing has changed with respect we feel about PILOT for residential" projects, Smith said at the meeting Wednesday, saying he and the mayor are "absolutely opposed."

"What has changed is we have now gotten competent, legal advice," he added. "The risk outweighs the reward of going to trial."

But, despite the guidance of lawyers for the town, some officials maintain there is room to challenge the contract.

"'May' and 'shall' mean two different things," Council President Giancarlo D'Orazio said after voting to table the decision.

Alan D. Cander, an assistant professor at Rutgers University's Edward J. Bloustein School of Planning and Public Policy, said the language seemed odd.

"To me that's not an enforceable clause," Cander said. "You're either going to do a PILOT or you're not."

The vote Wednesday wasn't all that different from the one last year. Council Vice President Scott Newman and Councilman Chris Del Borrello, who voted to deny the PILOT plan in 2013, also opted to table it. Councilman Daniel Morley and Councilwoman Michelle Martin, who supported the PILOT proposed last year, voted against postponing the item.

Del Borrello, during the meeting, criticized the process in which information was provided to the governing body about the planned settlement in recent weeks and challenged the administration's stance on the issue.

"I don't believe in no-win situations," he said.