The Redevelopment Agency closed on the former Elizabethtown Gas property at the end of October and will convey the property to a developer, possibly as soon as Friday.
The Collingswood-based firm has approvals for a 58-unit affordable housing development geared toward people who work in the arts and entertainment industry.
Commissioners received an update from their attorney before passing the resolution at Wednesday’s meeting, and conveyance could occur as soon as Friday. There are a lot of “moving parts,” said attorney Louis Karp of Weiner Lesniak, in part because financing is coming from four different sources. The project secured $15 million in equity with tax credits from the state Housing and Mortgage Finance Agency (HMFA) last fall.
Closing and conveyance of the property has been in the works for several years but the acquisition of Elizabethtown’s parent company, AGL Resources, had apparently complicated the process. The applicant is working to break ground in December and has obtained their site plan and outside agency permits, engineer Jacqueline Dirmann said in a report to commissioners.
The property at 219 Central Ave. (Block 167, Lot 1) was acquired by the agency on Oct. 31 for $731,100, according to property records, and the agency will convey 239 Central Ave. (Block 167, Lot 101).
Under terms of the redevelopment agreement, the Redevelopment Agency acquired the approximately 1-acre property for $731,000 with plans to sell it to Ingerman Development Corp. for $956,000. The difference of $225,000 will be the agency’s contribution as a local match for a tax credit at closing.
The agency will use $600,000 in HOME funds through Union County toward the acquisition, with $131,000 as a loan from Ingerman. At closing of the sale, the developer will pay the agency $356,000 cash, part of which will pay off the $131,000 loan, while the redeveloper will assume the $600,000 mortgage, and the $225,000 retained by the agency as a local match. Ingerman will receive a subordinated mortgage, expected to be paid off over 30 years.
The Rahway Residence for the Arts received approval from the Planning Board in March for 58 units: 24 one-bedrooms, 28 two-bedroom units, and 6 three-bedrooms. There will be 37 parking spaces on site with another 36 spaces off-site, through an agreement with the Parking Authority, either at nearby Hamilton Stage or YMCA.
City Council approved a 30-year PILOT for the project in February 2013. Payments would be 6.28 percent of adjusted income of the property, projected at about $34,657 in the first year and rising each year until a projected $59,212 in the 30th year. Payments would average $45,926 over the 30 years, a total of $1.377 million.
The property currently is assessed at $496,400, for a property tax bill of about $32,886.50.