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Prism Still Hot Topic at West Orange Council Meeting

Township Council gets some answers, but questions remain on project.

Once again, the historic Edison Battery Factory and its redeveloper, Prism Capital Partners, were the hot topic at The West Orange Township Council meeting, on Tuesday night.

Prism was approved earlier this year to begin building a mixed residential-retail development on the site of the former Edison Battery building.

Representatives of West Orange's Redevelopment Counsel, McManimon, Scotland and Baumann, LLC, and NW Financial, West Orange's redevelopment financial advisors, were on hand to provide an update on the project to the council and answer questions.

One major concern addressed was the possible foreclosure by Wells Fargo. The council learned Tuesday the foreclosure was dismissed.

The council was also told escrow accounts are up to date and Prism was researching whether to take advantage of a Historical Tax Credit, which would affect whether the project would be for-rent or for-sale, as part of their financing strategy.

The major bone of contention with Prism was in their slowness in responding to the township administration’s requests for updates on their finances.

Council President Victor Cirilo said since it was taking Prism so long to provide their audited 2011 financial statements, requested in October, he would like the Redevelopment Counsel reps to ask Prism to provide unaudited drafts in the meantime.

Councilman Jerry Guarino said, "I am frustrated with Prism," adding, "Facts are important when making decisions."

The Redevelopment Counsel reported four major lending institutions have expressed interest in underwriting the project. They said they are cautiously optimistic because on the macro level, this interest from large-scale institutions in financing large development projects shows the market is improving.

It was also determined, just like any property owner, Prism is responsible for maintaining the aesthetics of its property and action will be taken to request they manage the tarps and debris objected to by the local community.

Lastly, the council discussed having the Redevelopment Counsel provide regular updates on the project.

In the public meeting, the council:

■ Adopted a discharge of mortgage at 131 Franklin Ave.
■ Authorizing a net decrease of $14,042.15, from the original contract amount of the project “Mayfair District Sanitary Sewer Improvements” contract no. 3A, resulting in a 2.25% decrease.
■ Authorized a contract with SOR Consulting Engineers, Inc., of Cedar Grove for $4,900, for the investigation of soil at four (4) light pole locations at West Orange High School football field and track.
■  Authorized raffle licenses.
■ After a brief explanation by a representative, the council unanimously showed its support for Essex County’s proposal to improve the fields in the Turtle Back Rock area.
■ Authorized the collector of taxes to rebate payment to the listed taxpayer pursuant to final judgment, by the Essex County Board of Taxation.
■ Authorizing execution of the Garden State Municipal JIF Risk Management Consultant’s Agreement, for the period of one (1) year beginning Jan. 1, 2013 to Dec. 31, 2013.
■ Authorized the township West Orange to enter into three inter-local services agreements, with the Board of Education, in connection with the improvements to the West Orange High School Athletic Complex.
■ Authorized an agreement with Bourne, Noll and Kenyan, of Summit, for non-commercial real estate tax appeal services, for a flat fee of $2,750 per month, for one (1) year totaling $33,000.
■ Authorized a professional services contract, for the re-construction of the wading pool, at Ginny Duenkel Pool/Colgate Field.

The board then went into an executive session to discuss personnel matters and potential litigation matters.

Mark Paulson January 24, 2013 at 12:50 PM
"Four major lending institutions have expressed interest in underwriting this development project." Unfortunately, every report indicates that Prism is the only party that is ever doing something wrong even though #1 They have invested millions and millions of dollars into this project, #2. They are the only people who are currently willing to make the investment necessary in order to develop this piece of property and #3. Starting over would require Prism to have to sell the property and for the town to find a new investor who is willing to deal with the road blocks that this town puts in front of them in order to develop their own investment plans. (Not to mention that Prism has obtained numerous approvals from the town in order to move forward). I applaud the council for being cautious and raising concerns. However, some of the blame needs to be put on anyone who stands in the way of Prism. Prism has made many concessions in the past in order to satisfy the demands of the town. However, anyone who constantly says NO NO NO NO NO NO NO NO NO NO NO can't remain blameless. Sometimes we need to allow things to move forward so that progress can occur. Prism has done some things that are not acceptable. However, they are not the only reason why this project is not progressing as it should.
Bert Peronilla January 24, 2013 at 02:25 PM
Mark, your last sentence states there are other reasons delaying the progress of this project, other than Prism. Can you share with us what these other reasons are?
amy wall January 24, 2013 at 02:28 PM
Redevelopment is critical. Remove the obstacles and get moving.
Mark Paulson January 24, 2013 at 03:14 PM
Prism has invested millions and millions of dollars in order to develop this property. Many of the delays in this project have been caused by a member or members of this community who do not want Prism to be allowed to succeed. Their objections have delayed this project for too long. The difficulty that Prism has in paying taxes could be partially caused by the delays that the objectors have instigated. Prism might also be sick and tired of dealing with people who have a significantly less financial interest in this project. I am very upset with people who constantly try to block Prism from improving our community. There are future political reasons for these objections that may appeal to some people but they also have a negative impact on the community as a whole. Anyone who finds these numerous objections to be beneficial does not understand the benefits that this project can bring to West Orange. It's time for some people to start saying Yes Yes Yes more often with those who appreciate what this development has to offer.
Gary Englert January 24, 2013 at 04:54 PM
There has been a great deal of ill-informed commentary and posturing concerning this project, not the least of which was The Patch refering to to it as "Prismgate" ...suggesting the writer's own unfamiliarity with the genesis of the term, not to mention the fact that nothing here rises to the level of criminality, let alone Presidential perjury. Concerns about Prism's financial condition arose with revelation that it was involved in a foreclsoure action, with Wells Fargo Bank, concerning the Barton Press property...not even scheduled for development until Phase 2 of the redevelopment project. That his suit has been dismissed, the mortgaged discharged with Prism retaining title to the property should pretty much resolve anyone's real concerns...absent financial statements or not. The simple fact remains that the nature of a redevelopment project is such that each parcel of land is held in a separate LLC and there is not one hell of a lot of activity being recorded on its books; there is not income but, a lot of recurring expenses (property taxes, etc.) and Prism is carrying them with income from other sources and projects. What anyone is expecting to see other than that...whatever audited financial statements are to be submitted...is beyond me.
Sue Freivald January 24, 2013 at 06:32 PM
To say "they are the only people who are currently willing to make the investment necessary to develop this piece of property" ignores point #3--that Prism owns the property. We don't know that no one else would be willing to develop the property--no one else owns it or has the ability to show interest. (If anyone has offered to purchase it from Prism to develop it, how would we know?) Prism is not altruistic, and the fact they have misrepresented their plans and their finances (recall that last spring Diaz publicly told us that they had million in financing) makes caution that much more important. And they are, in fact the only reason the project is not progressing as it should--the Town has not stood in their way at all this past year. The mayor made it clear that no bonds or permits would be issued unless they were up-to-date with taxes--now they are. But Prism's not close to ready to ask for permits, because they have to find financing and they're no longer even sure they want to build rentals anymore. It's not that anyone is saying NO NO NO NO NO--residents have been saying that but have been ignored by the Council, administration, and planning board, all of whom have given Prism approvals so far. What's holding up Prism is Prism. All the Council is doing at this point is gathering information because things are not as Prism led them to believe, but Prism is in no way obstructed at this point. They seem simply unable to proceed due to finances...
Gary Englert January 24, 2013 at 07:08 PM
What Mrs. Freivald seems to be totally ignoring is the fact that Prism Partners LLC was chosen (from three vying to be named as such) as the designated redeveloper; the plans submitted for each being remarkably similar mixed use, residential-commercial projects. Once selected, Prism acquired the properties in the redevelopment zone and, yes, now owns the properties. While suggesting Prism itself is responsible for not yet having a shovel in the ground is to be unaware of the timing and protocols in place...not the least of which was a mandatory 45 day waiting period until the Planning Board (September) approval went into effect. Prism also needs approval of the state Historic Preservation Commission (which is pending) before building permits can be issued and final financing secured, as nobody formally commits funding based on speculation. If there is any white knight waiting in the wings, with the requisite $250 Million, ready to ride to the rescue and complete downtown redevelopment more swiftly than Prism, they haven't made themselves known. That, however, would be totally unrealistic as any new player would essentially have to start the entire approval process from scratch.
Gary Englert January 24, 2013 at 07:26 PM
By the way, rather than Prism "not being sure that they no longer want to build rentals," what our redevelopment counsel specifically stated was that Prism is questioning the efficacy of applying for certain historic tax credits as that would preclude them from selling units for some specified period of time. There is no crime, or likely adverse financial implications to the Township, should Prism wish to convert the property to a co-op/condo facility should changing market forces make that desireable.
Bert Peronilla January 24, 2013 at 09:40 PM
What is holding up the Historic Preservation Commission from giving their approval? Is there a chance that they will not give their approval, hence nobody wants to commit to final financing since the fruition of this project is still speculative? Just asking.
Paul P January 24, 2013 at 09:42 PM
"Prism Partners LLC was chosen (from three vying to be named as such) as the designated redeveloper; the plans submitted for each being remarkably similar mixed use, residential-commercial projects." http://pdfserver.amlaw.com/nj/trenk.pdf
Gary Englert January 24, 2013 at 10:20 PM
Concerned: I don't know that anything is "holding up" the approval by the state Historic Preservation Commission; there's a bureaucratic process in place and it takes what time it takes. The salient point being that the application couldn't even be submitted until the local Planning Board approval was given and in full force and effect...45 days after the approval was granted. Paul P: Is there some point you're trying to make by posting a link to Judge Stein's report exonerating Mr. Trenk of any conflict of interest or wrongdoing?
wohopeful January 25, 2013 at 01:44 AM
We must not give Prism carte blanche with the town of West Orange as Mr. Paulson would have us do. They have not been able to meet their financial obligations on time, have shown that they will unilaterally decide to stop paying their financial obligations forcing the other party to seek litigation to get appropriate restitution, and have continuously played bait and switch in order to gain concessions. Now is the time to be more vigilant with Prism as they have not shown that they act in good faith or honor their financial and contractual obligations. If they are not able to pay their property taxes what can we expect will happen for the next 30 years of PILOT payments? We cannot hand down such a poor deal to the future generation of taxpayers in WO. Mr. Paulson's suggestion that we give Prism a blank check and free reign to proceed is the height of absurdity. Prism entered into a contract six years ago knowing full well that their were laws and ordinances they would have to follow and they cannot get a free pass. Prism does not have the funding now nor have they ever had the funding to move this project forward. No one is stopping Prism but themselves.
Gary Englert January 25, 2013 at 04:27 AM
wohopeful: Prism has not been given Carte Blanche by the Township, quite the contrary; not only have they rembursed the Township for every penny it has spent on the redevelopment process, they've provided it with substantially more revenue than the parcels in the redevelopment zone ever previously generated...all while no generating any income for Prism. Mark Paulson is completely on point as, except for the ill-conceived efforts of a vocal minority, redevelopment area bonds would have been issued in 2009 and Edison Lofts would now be a reality...with the Township drawing greater annual income and, yes, being a bigger partner. Mark is also correct that these same people have created such an adversarial climate that its difficult to believe any other developer would entertain coming to West Orange, lest they subject themselves to similar abuse...like the incessant inaccurate claims there has been some "bait and switch" when ther has been none. Prism has paid all of their property taxes, albeit some a few weeks late; a function of the fact the parcels are producing no revenue and they must rely on income from other enterprises. The PILOT is predicated on a completed project that WILL be generating income of its own...the Township's interests being secured by a 1st and absolute lien on the property.
Mark Paulson January 25, 2013 at 05:20 AM
I always enjoy reading wohopeful's comments. His comments always reflect a pessimistic tone but yet his name continues to reflect hope. ): Maybe someday he will be willing to offer some. There are never any positive suggestions offered but his comments are always interesting to read anyway. I look forward to reading his opinions. However, when he misquotes me, I must object. I never suggested that we should give Prism a blank check and free reign to proceed. I simply stated that Prism is not the only party that is ever doing something wrong. I don't mind his contrasting opinions but I will not tolerate him misrepresenting what I said. Besides that, I look forward to any contrasting opinions that wohopeful has to offer. That's what makes this country wonderful. Let us always cherish our freedom of speech. In all sincerity, I wish wohopeful well and look forward to many other disagreements in the future.
wohopeful January 27, 2013 at 02:04 AM
Mr. Paulson, you don't get to say things like "It's time for some people to start saying Yes Yes Yes " from your bully pulpit and then tell us all that you never suggested giving Prism carte blanche. There are laws, codes, and approval processes that must be followed in order to ensure the welfare and safety of the township and its residents. We cannot let our guard done and allow Prism to proceed as you have stated as your desire. They must comply with the laws and regulations which they are fully aware of. The fact that Prism does not have the financing to move this project forward is the only reason this project is stalled. Laying blame upon anyone else is just ignorance to the history and facts of this project.
Michelle Cadeau January 27, 2013 at 01:54 PM
Couldn't agree more! Let's get it done for the sake of our town.
steve@murraystreet.com January 27, 2013 at 02:03 PM
Amen! Thank You Mark Paulson and Gary Englert. It astounds me that some writers never have a good word to say about how someone else is doing the difficult jobs.


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