Edison Redevelopment Project Gains Preliminary Council Approval

Council passes two ordinances on first reading, approves resolution

[Editor's note: This story was updated at 10:30 a.m.]

The plan to redevelop the Thomas Edison battery building on Main Street is one step closer to becoming reality.

Following more than two hours of public comment Tuesday, the township council approved a resolution and passed two ordinances on first reading, authorizing the finances for

Phase I calls for 333 luxury apartment units for-rent and 18,500 square feet of retail space in the Edison battery building. It will also include a 635-space parking garage and a Jitney service to both the Orange and South Orange New Jersey Transit train stations.

The approved resolution grants a 30-year tax exemption for the developer, Prism Capital Partners, LLC.

The township will instead enter a payment in lieu of taxes (PILOT) agreement with Prism, whereby the developer agrees to pay a reduced amount to the township instead of regularly applied real estate taxes.

The PILOT payments are predicted to be roughly $950,000 in the first stabilized year, according to Eugene Diaz of Prism. The PILOT will increase every five years in the 10th year at a greater percentage than regular taxes to reduce the difference. 

The first ordinance authorizes the township to issue $6.3 million in general obligation bonds to the developer to pay for infrastructure costs and places a special assessment on the property. The second ordinance outlines the financial agreement between the township and Prism.

As part of the agreement, the developer agrees to repay 50 percent of the issued bonds to the township, with interest.

Residents React

Residents were torn on the issue and while some praised the plan, others questioned the financial partnership between the township and the land's developer.

Donna Uher, a resident of Llewellyn Park said, "I love history, but I don't want to pay for it. Public-private partnership, great. But why does my part of the partnership have to be putting up money to guarantee? Do I get a part of the profit if it's successful? You (Prism) take that risk and leave me out of it."

Others said issuing the bonds to the developer was comparable to giving them a "bailout."

"This developer doesn't have the financial wherewithal for this project. They never had it, they are looking for a bailout," said resident Kevin Malanga.

While the dissenters agreed something needed to be done downtown, most were staunchly opposed to the issuance of bonds by the township.

Councilman Sal Anderton, who also sits on the redevelopment committee, said he was "open-minded" to residents' concerns, and clarified the financial risk involved with the project.

Of the $6.3 million in bonds, he said $3.1 million of the debt service would be paid back by a special assessment on the property. "It's not something that is going to come out of tax dollars that you and I pay … What's the impact on your taxes? None. The impact is entirely on the properties that receive the special assessment," he said, adding that issuing assessments were not unprecedented in the township.

In addition, the township will receive revenue generated from the project that will pay for the other half, he said. The township's risk is "contained," he assured.

Many cheered the move and said it was a long time coming.

"I think we've talked enough, it's time to stop talking and start doing something about making that property a vital part of our community," said resident Bill Sullivan.

"Partnerships are two way streets … both sides have to give something, both sides have to make some type of commitment for the greater good. The greater good here is that hole in the wall."

John McElroy, a downtown business owner, said the project would bring jobs to the township and benefit the business community in town, "The revitalization will bring hundreds of new residents downtown."

Councilwoman Patricia Spango said she was sympathetic to residents' complaints and was also concerned about the accuracy of the traffic study, parking and public safety issues.

Spango, though, maintained that she believed the project would benefit the entire community. "I've seen the change and the deterioration of this site. I am a firm believer that as goes Main Street, so goes the town. If we don't do something, it's going to trickle throughout the town."

Affordable Housing Concerns

Councilman Joe Krakoviak thanked everyone for packing the auditorium at Thomas A. Edison Central Six School where the township meeting was held.

However, he expressed explicit concern with the affordable housing obligation required by the project.

State law requires a municipality to meet an affordable housing obligation whenever they build a house or commercial building, he said. But while the township incurs that obligation, the developer usually meets it.

Phase I will require about 44 affordable housing units, Krakoviak said, adding that the township is planning on getting a waiver so the obligations will not have to be met in the first phase.

"We are going to take a huge risk if we allow that to happen and if the state gives us the waiver to do that," he said. "I am very concerned about us moving off this obligation without getting any risk management in place, something that makes sure that we don't have to pay for it."

The council will meet March 6 to vote on the ordinances on second reading.

If both ordinances are approved as well as additional resolutions next meeting, the developer must still garner approval from the zoning board before proceeding with construction. Construction is expected to take 20 months.

Paul P February 26, 2012 at 06:22 PM
It's an insult to the voters and tax paying citizens of a town, when they are being told, this is the way it is, it's this or nothing, to bad. Yes, at this point it seems the project is a done deal. But how we got here is still a tangled web of insider deals and lack of transparency. This piece of property was packaged in a deal with the sale of the Organon property. A group of secret investors was put together by the then town attorney, to purchase the Organon property, while this same town attorney was "consulting" with the then mayor and govt on the redevelopment plan and districts. We were told no one wanted to buy Organon property at the time so the then town lawyer took the proactive step to find a group of investors to buy the property, without any bidding from other outside investors, because supposedly no one was interested in the property. This is called pay to play, common in NJ , not totally illegal, but very shady. So forgive me if I dredge up the past as we look into the future of this project that has been "forced" upon the town. Maybe they should finally admit that this project is only going forward, not because it was the best one for the town, but it was the one they are now being forced to agree with.
Gary Englert February 26, 2012 at 06:23 PM
@ James Johnston & wohopeful: Please spare us the very selective, righteous indignation.as I engaged in totally civil discourse until personally attacked and seeing others' character assassinated anonymously. I feel no need to apologize for defending myself and others here as I wrote nothing I would have been ashamed to say in public or to anyone's face, if being attacked in such fashion. The problem is the people so inclined would never do such a thing without the cover and anonymity provided by a screen name.. If The Patch truly wishes to further civil discourse it will require people to register and use their verifiabnle given names when posting, rather than the "imaginary friends" we all should have long since outgrown. I'm please that the majority of my substantive posts remain here as the information is both germane and accurate.
Gary Englert February 26, 2012 at 06:40 PM
@ Paul P: Your analysis and summary are a complete obfuscation of what occurred, during the project's history and without basis in fact. Again, and as previously advised, if you have proof of malfeasance, misfeasance and/or anyone's violation of any fiduciary responsibility to the public, there are appropriate law enforcement authorities and agencies to which they can and should be brought. Absent your doing that, your anonymous nonsense is nothing more than that.
Paul P February 26, 2012 at 06:50 PM
In the age of identity theft, govt eavesdropping, the ability for strangers to poke and prod into our personal lives, and for personal safety, a bit of anonymity is not a bad thing. A first name, and living in the town, is enough " credentials" for me exchange information and thoughts, with others in this forum. This was and is a bad project for West Orange. The PILOT money alone is a drop in the bucket and cannot possibly cover the added expense brought on, by even a small number of new citizens in town. A few years down the road our taxes will have to cover these overages. All it takes is one family with a special needs child moving into town, and half the PILOT money is gone, poof. And that's just one example.
Gary Englert February 26, 2012 at 06:57 PM
@ Adam Kraemer: Your issue is then with the legislature as both the theory and concept of redevlopment has long been accepted as a public good, with rules and regulations to encourage it promulgated and memorialized in public law. We cannot in good conscience have some paradigm shift after following the proscribed criteria for most of a decade and having induced an entity to invest +/- $60 Million in Edison Village. Your continuing this line of discussion only encourages the uniformed to revisit related issues that have long been decided and are no longer germane, such as the general nature of the desgn and mixed-use nature that have long since been approved. The salient remaining issues to be determined are pretty much twofold: 1. Should the Township allow a change from condo sales to rentals (in the residential portion of the project) in order that the developer can secure financing? 2. Should the Township approve the issuance of $6.3 Million general obligation bonds (to finance infrastucture improvements and public amenities), the carrying costs for which will be covered (50-50) by an annual "special assessment" (against Prism) and income from the PILOT. That is where our atttention should be devoted as nothing else is truly open for discussion; most everything else having been examined, debated and approved.


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