.

Edison Village Opposition is Unfounded

Historical perspective helps with most things and Edison Village is no exception ...

Just how much financial "risk" accrues to any single taxpayer through the Township's issuance of $6.3 Million in general obligation bonds in support of the project?

Not very much at all, really.

First the township bonding authority is detailed in state law, with the allowable value of bonds a municipality can issue predicated on its total assessed property value.

At present, the township has outstanding bond obligations equal to less than 1/3 of its total bonding authority and enjoys an excellent credit rating; the issuance of $6.3 Million in bonds would not adversely effect either.

If however the absolute worst case scenario were to come about ... Edison Village/Prism goes belly up, they can't make their payments, can't sell and/or we get tied up for years in litigation to collect monies due ... here's what the effect would be on the typical taxpayer:

1. If the Township decided to retire the bonds with a one-time assessment (unlikely): a one-time payment of $350 for every property owner (+/- 18,000)

2. If the Township decided to repay the bonds over their 30 year term (likely): an annual payment of $24 per year for 30 years for every property owner (+/- 18,000)

Those are pretty big "ifs" and given something that the people putting $250 million into Main Street aren't about to let that happen very easily.

Still, redevelopment is a complicated process and missing from the most recent debate is a summary of things decided years ago for reasons that color the entire project.

Why formal redevelopment and tax incentives are necessary here is because the parcel is not conducive for fully private investment without them.

Like it or not, the battery factory has historic significance as status as such been given it by both the state and federal governments.

Second, the building itself is made of Edison's own design and using his proprietary formula for concrete and will likely outlast the pyramids of Egypt; if it could be demolished (and it can't, see preceding point) the cost would be extraordinary and prohibitive.

Last, because the property was an industrial site long before environmental concerns were on anyone's radar screen, the property required substantial site remediation (already accomplished) overseen by the DEP.

What all of this means is that redeveloping this property will require an investment of +/- $112 Million to construct a complex that will have an assessed value of $80 Million.

Can anyone get a (legitimate) mortgage on a home equal to 40% more than its value?

No, and investors aren't lining up to back such a project without some incentive that makes it palatable and that incentive is the PILOT (Payment in Lieu of Taxes) Program and willingness to assist with providing advantageous financing of $6.3 Million (the bond) for infrastructure and public amenities.

This dynamic would apply to any investor and to whatever fanciful alternative uses one might think preferable, as those that were willing to make the investment agreed on one point: a mixed use (commercial-residential) is what was appropriate for the site.

That people are willing to turn their nose up at a $250 million investment in our community ... in the face of risk so small as to be non-existent ... is simply mind boggling to me; particularly given this debate has gone on for 50 years.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Tom G. March 28, 2012 at 06:28 PM
@Cynthia - exactly, and I'm sure the "other" towns within a 5-mile radius (Orange, East Orange) that the person was referring to don't have many residents with the ability to drop $3k on an apartment. If they did, they probably wouldn't be living in Orange or EO to begin with.
Adam Kraemer January 22, 2014 at 09:50 PM
It the project is so great why can't the market support this with out tax payer backed loans and special tax deals? Get the government out of this. Developers can tax the risk and get the down side or upside depending on the market.
Gary Englert January 26, 2014 at 01:10 AM
Adam Kraemer: While the inactivity with the Edison redevelopment project has long since become as troubling to me as it is to most everyone else, you continue to regurgitate fundamental questions asked and answered years ago...and the answers negate the suggestion that this project would ever occur, or succeed, were it to rely strictly on market forces. Fundamental to the matter, as stated ad nauseum, is that the building's historic designations and environmental remediation require an investment of $30 Million more than the property will ever be worth on build out. Tax abatement is the long accepted mechanism to encourage re-development of such properties. Without it, all West Orange could look forward to is an ever deteriorating eyesore on Main Street.
Bart June 12, 2014 at 10:52 AM
2+ years later, this is a hysterical read from the town's main cheerleader.

Boards

More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something
See more »