The Redevelopment Agency voted unanimously last night to declare Carriage City Properties in default of its redevelopment agreement. Carriage City has 30 days to rectify the situation or the matter could head to Superior Court, Redevelopment Director and City Administrator Peter Pelissier said.
Before going into a 40-minute closed session to discuss the potential litigation, Pelissier told commissioners there hasn’t been much redevelopment activity except issues dealing with Carriage City Properties.
The city will begin inspecting units at SkyView at Carriage City Plaza to determine how many are rented and how many have been sold, Pelissier said in a brief interview after last night’s meeting. Carriage City has apparently turned to renting unsold units at the 220-unit, 16-story Irving Street building, advertising a lease to buy option on its Web site. The Redevelopment Agency contends that renting units is in violation of the Sept. 30, 2005 redevelopment agreement. Officials have expected Carriage City to come before the agency to revise the agreement since January, but Pelissier said the developer has been unresponsive.
The issue seems to come down to money: when the agency gets its $10,000 fee for each unit sold, but also, it has been paid for 46 units while 57 have closed. The redevelopment agreement indicates it is to be paid by the developer at closing, but if units are rented (thus, no closing), city officials expect the fee to be paid upon occupation of the unit.
It’s unclear how many units have been rented through the developer. With 76 temporary certificates of occupancy (TCO) issued by the city and 57 units sold, it’s conceivable that fewer than 30 are rented, but that also could mean as much as $300,000 in fees may be owed to the agency — if they are occupied. It’s also possible that those TCOs issued may expire. The agency has been paid for 46 units as of last month and no units have closed since then to my knowledge.
Carrage City is not the only one in default. Diversfied Communities (Builders of Riverwalk) has packed up and left without completing the required improvements (like paving the streets) and the city will need to go after them as the roads are not safe
And after that will be the builders of The Savoy and that other building on Main St. And then Park Square, the second building of which will not be done for years.The developers are kind of stuck, I imagine. They can’t get financing because of the credit crisis. I don’t know what could or should have been done to prevent all this. Maybe the city officials should have required the financing to be in place up front? Regardless, we’re going to be left with these half-finished projects in this town for the next 10 years. So we better decide right now what to do with the lots. The ones that are not even started we should level and turn into parks or parking lots. At Riverwalk, we should seize whatever properties the developer hasn’t sold. And at SkyView, we should take the owner’s Lamborghini.
And maybe we should rename this blog.
So much for being the next Hoboken. How will the city make up the revenue shortfall?Here’s how this could have been prevented: renovate slowly and steadily rather than plan to go big-time based on a few years of runaway asset price inflation.
I can’t believe Park Square started on the second phase building, when they haven’t finished the first one yet, and have been dragging their feet on it for over a year. Now I fear that the Park Square phase II building is going to be a half-built eyesore for years to come.I think Mark should stic with the blog name — Rahway is rising, even if at a snail’s pace, and even if what’s rising is mostly skeletons at this point.Hopefully the city will be able to collect on some of the money its owed. But most importantly, I hope Park Square finishes and that we get some more people living downtown ASAP.
If 220 units are in the building, and 57 are sold and 76 have TCO, do we assume the rest of the building is empty? Do we know how much the maintenance is running in the sold units? (My boyfriend suggests they would raise maintenance to make up for empty units?)