Montvale Faces Decision on 34-Acre Site: Data Center or Affordable Housing Development

The borough of Montvale, New Jersey, is at the center of a contentious decision regarding the future of a 34-acre former KPMG office campus in Bergen County. A settlement agreement filed with the Bergen County Superior Court offers developer SHG Montvale MB VI two options: construct 250 residential units, including 50 affordable housing units, or build a large data center, which would come with a Payment in Lieu of Taxes (PILOT) agreement. This proposal has sparked a major conflict between local government and housing advocates. The Fair Share Housing Center, a statewide nonprofit dedicated to enforcing affordable housing compliance, has filed legal challenges to the settlement. The organization argues that Montvale is incentivizing commercial development over its state-mandated affordable housing obligations, rejecting the borough's housing plan in February. This legal dispute is scheduled to proceed to court this summer. Montvale officials, led by Mayor Mike Ghassali, contend that a data center is already permitted under existing zoning and that the borough has historically exceeded its affordable housing requirements. Mayor Ghassali also highlighted potential benefits from a data center, such as job creation and substantial development fees for the town, characterizing the housing advocates' arguments as overreaching. This local conflict is reflective of broader tensions across New Jersey, where many municipalities are resisting state mandates to add approximately 146,000 affordable units by 2035. The outcome of the Montvale case, expected in the coming months, will have significant implications for how towns across the state navigate development, affordable housing requirements, and the growing demand for data centers, which are increasingly scrutinized for their impact on power grids and water supplies.