ADAMS TWP — A Lutheran Senior Life facility will pay both the Mars School District and the township an annual payment in lieu of the taxes.

An agreement was approved by the Adams Township supervisors on Monday night and the Mars School Board on Tuesday night for payments on the Overbrook Pointe building on the St. John’s Community property near the intersection of Route 228 and Pittsburgh Street.

That building is the only property on the St. John’s campus that is in Adams Township.

School district solicitor Tom King said Tuesday the “pilot agreements” are an alternative to potential litigation between entities regarding whether a business is actually nonprofit or not.

The school district will receive 10 percent of the potential taxes on the property, or $7,630, for three years, beginning retroactively with the 2012-13 school year.

The annual payments will increase to $11,446, or 15 percent, in the following two years.

In the sixth through 10th years of the agreement, the amount will increase to 50 percent of the building’s potential taxes, or $38,154 per year.

The agreement was reached through meetings with Lutheran Senior Life.

“This was mutually negotiated,” King said.

District business manager Jill Swaney said the amounts could rise in the future if the building is expanded and its assessed value increases.

She said the pilot agreement is a good for the district, given the alternatives.

“This entity could have filed for total tax exemption so it does benefit the district to enter into this agreement,” she said.

The district has a similar deal with St. Barnabas regarding its property in Valencia, Swaney said.

Township solicitor Mike Gallagher at Monday’s supervisors meeting said the township will receive $228 in each of the first three years of the agreement, then $443 each year until 2019, and $1,445 per year up until the end of the agreement in 2023.