[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 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.