CRANBERRY TWP — The Sherwood Oaks retirement community recently reached a 10-year extension on its tax agreement with the township, the Seneca Valley School District and Butler County.

The payment in lieu of taxation agreement says that Sherwood Oaks will pay $3.97 million over 10 years to the three taxing bodies. The agreement is an extension of a deal originally struck in 2004. The new term runs from now to 2025.

For 2016, Sherwood Oaks will pay $285,000 to the school district, $58,500 to Butler County and $31,000 to the township. Starting in 2020, those figures will increase slightly each year.

The community has 239 original patio-home units, 13 patio home units built since 2010 and 24 apartment units. Construction of new units will automatically make the tax obligations increase.

It also includes a clause stating that the agreement will automatically renew until 2030, with increases, unless any party opts not to renew.

The agreement was initially struck after Sherwood Oaks had twice challenged its tax assessment, arguing that a nonprofit organization should not have to pay the full real estate tax.

The agreement includes language recognizing Sherwood Oaks as a 501(c)(3) charitable organization, which exempts it from various federal, state and local taxes.

Sherwood Oaks is a 84-acre campus off Rochester Road. The total assessed value for the property is $9.77 million, according to county real estate records.

It offers retirement housing, assisted living and nursing care.

The agreement was approved by the township supervisors in December, by the commissioners on May 11 and the school board on June 13.

“We were very happy that we were able to come to a mutually beneficial agreement with the taxing bodies to extend the already existing agreement for the residents of Sherwood Oaks,” said Annette McPeek, chief financial officer, in a statement.