"It will produce the tax revenues and economic vitality, not just for Kenilworth but for our entire county, that have been sorely missed since Merck relocated." Mayor Linda Karlovitch said that about the CoreWeave data center going up on the former Merck campus. The borough's May 6, 2026 council minutes record the statement. In the same remarks she called the project a "$1.8 billion investment" and said "we are getting more out of this deal than we are putting into it."
Four weeks later, at the June 3 council meeting, a resident asked about reports of a PILOT agreement. The minutes record that he "was advised that no PILOT agreement currently exists." At the September 16 meeting, the borough attorney said the final redevelopment agreement still had not been executed. The council's October 21 agenda listed no CoreWeave item.
The mayor's statements gave no estimate of what the project would bring in each year. The agreement that would set that number hadn't been executed as of the September meeting. The terms of that agreement will decide which part of a Kenilworth tax bill benefits from the data center, and possibly whether the school levy shares in it at all.
The hole the borough is trying to fill
The borough's own project timeline explains why so much rides on this site. Merck announced the closure of its Kenilworth campus in 2020. That left a 107-acre property empty, and it had been the borough's largest taxpayer, "providing approximately 19% of the Borough's municipal tax revenue."
Onyx Equities bought the campus in 2023 and renamed it the NEST Center. On a deed dated June 30, 2025, CoreWeave bought a 35.9-acre piece from Onyx for $322 million. The Planning Board approved the data center in May 2025. NJ.com reported in April 2026 that the facility was expected to be fully operational in early 2027. In that article, the mayor wrote that "When Merck left, it left a real gap in jobs and tax revenue," and that "CoreWeave is filling that gap with something built for the future."
How the project's money gets counted depends on one application the borough has had since September 4, 2025. That day, CoreWeave applied to be designated redeveloper and for a long-term PILOT, a payment in lieu of taxes. The timeline says Kenilworth would consider a financial agreement for a PILOT only if the terms were favorable.
Where a conventional tax dollar goes in Kenilworth
Every Kenilworth property tax bill is split three ways. The borough's 2025 municipal budget sets the total to be raised by taxation at $51,707,439.77, divided like this:
| 2025 Kenilworth levy | Amount | Share of total |
|---|---|---|
| Local school district tax | $25,756,810.56 | about 49.8% |
| Tax in local municipal budget | $16,376,014.55 | about 31.7% |
| County tax | $9,574,614.66 | about 18.5% |
| Total to be raised by taxation | $51,707,439.77 | 100% |
The municipal line includes an $853,165 minimum library tax. The percentages come from the 2025 budget levy, so treat them as the structure of the bill, not a 2026 rate.
A large property paying conventional taxes adds to the tax base behind all three lines. Roughly half of that support ends up behind the school levy, which is the biggest single piece of the bill. A PILOT changes that split.
Where a PILOT dollar goes
Under New Jersey's Long Term Tax Exemption Law, a project with a financial agreement doesn't pay conventional taxes on its buildings and improvements. It pays an annual service charge instead. N.J.S.A. 40A:20-12 says who receives it:
"the urban renewal entity shall make payment to the municipality of an annual service charge, which shall remit a portion of that revenue to the county as provided hereinafter."
The county's portion is set later in the same section. A municipality that signs a financial agreement "shall remit 5 percent of the annual service charge collected by the municipality to the county." That provision gives no share to the school district.
Under a PILOT, then, the borough would keep 95% and Union County would get 5%. Under conventional taxes, the school levy is about half of every dollar raised. A PILOT would likely bring in more money for the borough budget, but the schools wouldn't be paid directly from it.
The statute also sets a minimum for the charge and a schedule that steps up over time:
- Base charge. At least 10% of the project's annual gross revenue. Where gross revenue can't reasonably be determined, or at the municipality's option, the charge is a percentage of total project cost, at least 2% for projects that aren't low- and moderate-income housing.
- First stage. At least 6 and at most 15 years after completion at the base charge.
- Later stages. The charge becomes the greater of the base amount or 20%, then 40%, then 60%, then 80% of the taxes that would otherwise be due. Each stage lasts as the agreement specifies, within the statute's limits.
Under the statute, the project also gets credit against the service charge for land taxes paid over the previous four quarters.
The borough hasn't published an annual payment figure, a term length, or a measure of "project cost" for this site. Any dollar number for the CoreWeave PILOT would be a guess until a financial agreement is public. What the statute does settle is who gets paid. If a PILOT is signed, the money goes to the borough budget and the county.
This is general information about how New Jersey's tax exemption law is structured, not tax, legal or financial advice. Anyone weighing what it means for a particular property should talk with their own attorney or tax professional.
The paper trail, in order
The decision that matters most is still ahead. Here is how the record has built up, from the borough's timeline and minutes:
- 2020. Merck announces it will close the Kenilworth campus.
- 2023. Onyx Equities buys the property.
- 2024. The council designates the site a non-condemnation redevelopment area (Resolution No. 2024-130) and adopts the 2000 Galloping Hill Road Redevelopment Plan (Ordinance No. 2024-15).
- May 15, 2025. The Planning Board grants site plan approval for the data center, memorialized May 27, 2025.
- June 30, 2025. CoreWeave's deed for the 35.9-acre parcel is dated.
- August 20, 2025. Resolution No. 25-187 authorizes a funding agreement under which CoreWeave posts an initial $75,000 escrow to cover the borough's professional costs before development.
- September 4, 2025. CoreWeave applies to be designated redeveloper and for a long-term PILOT.
- October 15, 2025. CoreWeave is conditionally designated redeveloper.
- June 3, 2026. A council answer in the minutes: "no PILOT agreement currently exists."
- September 16, 2026. The borough attorney says the final redevelopment agreement hasn't been executed. He says independent professionals, not affiliated with CoreWeave, will be retained to review concerns raised at public meetings and decide whether more restrictions or protections belong in the agreement.
The $75,000 escrow covers the borough's professional costs. It isn't a tax payment. In September, the mayor also said a certificate of occupancy would not be issued until those studies and other applicable requirements were complete.
The rest of the campus sits outside the data center deal
CoreWeave owns 35.9 acres of a 107-acre property. The borough's July 1, 2026 minutes record that Onyx Equities owns NEST Building 15, which is slated for future renovation as office and research space. A subdivision would create separate lots for NEST office buildings 1, 5 and 6 so they can be sold to a new owner. In April, the Planning Board took up CoreWeave's own application to divide its parcel into four lots. No site improvements were proposed in that application.
So the Merck site's eventual contribution to the borough won't come from one agreement. The office buildings could end up on the tax rolls on a separate timeline and on separate terms from the data center.
A tax base on one side of the line
Under the 2024 redevelopment plan and the 2025 approvals, the site is in Kenilworth. The township of Union sits close by and has no claim on its tax base. TAPinto reported that at the Union Township Committee meeting on October 13, 2026, residents raised concerns about air and water quality, noise, energy use and public health. The township hired a planner and a law firm, each under a contract capped at $15,000, to review the project's public records, approvals and permits.
In her May statement, Mayor Karlovitch said the facility would have no contaminated water, burn-off or airborne emissions. She also said independent analyses showed no impact on the grid or on utility costs.
Union's committee also endorsed state Senate bills S4657, S4658 and S4659. The text of S4657 shows it was introduced October 1, 2026. It would add environmental justice impact and hearing requirements to data center permits. The text of S4658 would require data center reporting to the DEP and have the department set up a Data Center Transparency Dashboard. In TAPinto's account, one of the endorsed measures would also have the DEP study the environmental impacts of large data centers and temporarily halt new data center construction.
Kenilworth's redevelopment agreement is being finished while these debates continue. The borough attorney has said the agreement may pick up added restrictions or protections.
FAQ
Has Kenilworth signed a PILOT with CoreWeave? The most recent direct answer in the minutes came on June 3, 2026, when a council official said no PILOT agreement existed. On September 16, 2026, the borough attorney said the final redevelopment agreement hadn't been executed. The October 21 agenda listed no CoreWeave item, though an agenda doesn't show what happened at the meeting.
How much will the data center pay each year? No official estimate has been published. Under state law, a PILOT's minimum depends on the project's annual gross revenue or total project cost, and the agreement would set the schedule.
When is the facility expected to open? NJ.com reported in April 2026 that it was expected to be fully operational in early 2027. The mayor later said a certificate of occupancy would wait until independent studies were complete.
Where can I follow the agreement? The borough posts agendas and minutes in its online Agenda Center. A financial agreement would come before the Kenilworth Borough Council. The borough's December calendar lists a council meeting on December 2.
If you're comparing Kenilworth with its neighbors and want to know how the Galloping Hill Road agreement could affect your own costs, or you own near the NEST Center and want to talk through timing before you list, Eleana Giannisi can walk you through the borough's latest public record and what each part of it means for your plans. Schedule a consultation.
