Montclair Approves 30-Year Tax Deal for Lackawanna Plaza Redevelopment

After years of debate, legal challenges, and community input, Montclair has taken a major step forward on one of the most talked-about redevelopment projects in town. The Township Council approved a 30-year Payment in Lieu of Taxes (PILOT) agreement for the Lackawanna Plaza development – and a Superior Court judge has since upheld the project's redevelopment plan. Here's what's happening, what the project includes, and what it means for homeowners and buyers.

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What is Lackawanna Plaza?

Lackawanna Plaza is a long-vacant former industrial and commercial site located near the Montclair Heights train station. It's been one of the most discussed redevelopment opportunities in Montclair for years – a large, underused parcel in a prime transit-accessible location that the township has identified as ripe for transformation.

The site sits along Bloomfield Avenue and is close to NJ Transit's Montclair-Boonton line, making it a textbook candidate for transit-oriented development. For a town like Montclair – where housing demand is high, inventory is tight, and walkability is a major draw – a project like this has the potential to meaningfully shape the neighborhood.

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What's being built?

The approved redevelopment plan, led by developer BDP Holdings LLC, includes:

• 300 residential units – a mix of market-rate and affordable housing.
• 135,000 square feet of commercial space – intended for retail, office, or mixed use along the Bloomfield Avenue corridor.
• A new supermarket – the developer has indicated the first priority is building a grocery store to serve the neighborhood, which has lacked a full-service supermarket in the immediate area.
• Six construction phases over six to eight years – four phases west of Grove Street and two phases east of Grove Street.

The project is significant not just for its scale, but for its location. Transit-oriented developments near train stations have a track record of supporting property values in surrounding neighborhoods – particularly in towns like Montclair where buyers actively seek walkable, commuter-friendly areas.

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What happened with the PILOT?

In March 2026, the Montclair Township Council voted to approve a 30-year PILOT (Payment in Lieu of Taxes) agreement with the developer. A PILOT is a common incentive tool used in New Jersey to make large-scale redevelopment projects financially viable. Instead of paying standard property taxes during the development period, the developer makes negotiated payments to the municipality – which are typically lower than the full tax amount but provide guaranteed revenue during the construction and early occupancy phases.

For the township, the PILOT provides a path to getting a major eyesore redeveloped into something productive – housing, retail, and a grocery store – without requiring the developer to bear the full carrying cost of standard property taxes during a multi-year build-out.

For homeowners, the PILOT is worth understanding because it affects how the development contributes to the local tax base. PILOT agreements can be a point of community debate, and it's worth watching how the payments are structured and how they compare to what a fully assessed property would generate.

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What about the lawsuit?

The Lackawanna Plaza redevelopment plan faced legal challenges from a neighboring property owner who disputed the process. In late March 2026, a Superior Court judge upheld the redevelopment plan, ruling in favor of the township and developer. The court's decision cleared a significant legal hurdle and confirmed that the redevelopment process followed proper procedures.

The ruling also noted that the developer has a track record of completing similar projects – a factor that weighed in the court's assessment. The lawsuit had been one of the main obstacles to moving the project forward, and its resolution signals that the Lackawanna Plaza redevelopment is now on firmer legal ground.

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What this means for Montclair homeowners

If you own property in Montclair – particularly in the area near the Montclair Heights station or along the Bloomfield Avenue corridor – here's what to watch:

• New housing supply. The project will add 300 units to Montclair's housing stock. In a market where inventory has been extremely tight, additional supply could help ease some of the pressure on pricing – though the impact will depend on how quickly units come online and what price points they target.
• A new supermarket. A grocery store in this location fills a real gap in the neighborhood and adds daily convenience for nearby residents.
• Commercial activity. The 135,000 square feet of commercial space could bring new restaurants, shops, or services to the area – the kind of amenity that strengthens neighborhood appeal.
• Construction impact. Six phases over six to eight years means this will be an active construction site for a while. If you live nearby, plan for that reality – noise, traffic changes, and temporary disruption are part of the deal with large-scale redevelopment.
• Long-term property value. Transit-oriented developments in comparable New Jersey towns have generally supported property value growth once completed. The key is execution – if the project is well-designed and the commercial spaces attract quality tenants, the long-term outlook is positive for the surrounding area.

What this means for buyers

If you're considering buying in the Montclair Heights area or along Bloomfield Avenue, the Lackawanna Plaza redevelopment is an important piece of the puzzle. The project adds housing, retail, and a grocery store to a transit-accessible location – the kind of combination that tends to attract buyers and support values over time.

That said, construction will be ongoing for several years. If you're sensitive to that kind of disruption, it's worth understanding the phased timeline and which phase is nearest any property you're considering.

The bottom line

The Lackawanna Plaza redevelopment is one of the most significant projects in Montclair's recent history. The 30-year PILOT approval and the court's upholding of the redevelopment plan have cleared the path for a transformative project near the train station. For homeowners and buyers, the key takeaway is that this area is changing – and for the better, in most respects. New housing, a supermarket, and commercial space in a walkable, transit-oriented location are the ingredients for a stronger neighborhood.

I'll be tracking the construction timeline and how the project develops over the coming years. If you have questions about what this means for a specific property or neighborhood, I'm always happy to talk through it.