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West Orange Town Council Addresses "Prism-gate"

Public asks council for answers about the struggling developer

 

The West Orange Township Council addressed concerns regarding the historic Edison Battery Factory and its re-developer, Prism Capital Partners, at its meeting Tuesday night. 

The council echoed the frustration of the public at not getting timely answers to questions about the developer’s financial position. 

“The public is really concerned, as is the council,” said Councilman Jerry Guarino. "(They are wondering) is (the redevelopment project) going to be viable? Is it going to happen and is the township exposed? The township is not exposed to any liability; we’re doing our job… it gets emotional. 

“The township isn’t giving (Prism) any money unless they maintain their requirements,” he said. “But the taxpayers aren’t exposed to any loss.” 

to the township and one of their properties was foreclosed upon. The developer has invested around $60 million into the Edison Battery property.

According to West Orange administrators, before Prism can put shovel to soil, their project still has to be approved by the state’s historic preservation commission, a process that is underway. 

With the backdrop of federal tax hikes on middle income households, Council President Victor Cirilo said he understands the public’s concerns, and said they will be addressed in further detail at upcoming budget hearings. “We haven’t raised taxes in three years and we’ve lowered the amount spent to 2008 levels, so right now our budget is around $73 million dollars,” he said. “We’re doing pretty decent. (But in the aftermath of Hurricane Sandy) it’s going to be tough to do again this year.” 

After public comments, the council approved the consent agenda, which included reimbursements totaling $185,081 to residents who overpaid on their property taxes last year, the temporary 2013 budget (attached to this article as a PDF) and transfers of $386,128 among accounts, among others. West Orange reports unspent 2012 appropriations of $477,008.

wohopeful January 15, 2013 at 08:25 PM
And as a holder of said mortgage they have a lien on the property and assets in question, thus making them a lien holder who have every right and title that the assets not be razed. Just because you dreamt it doesn't make it reality.
Gary Englert January 15, 2013 at 08:56 PM
wohopeful: And such differences of opinion is why we have courts of law and equity where the matter will be decided if not settled beforehand. The bottom line remains that Prism is restricted from do what it has always intended and is required to do with the property, based on the terms of a mortgage it assumed that was first cast when Barton Press was a going concern...and much has changed in ther interim.
wohopeful January 15, 2013 at 09:08 PM
Prism may have intentions to do a great many things, but it does not preclude them from meeting their obligations under a contract they signed without duress. And it doesn't make your excuses for them any more plausible.
Gary Englert January 15, 2013 at 09:16 PM
wohopeful: Understanding both sides of an issue and not rushing to judgment without being privy to all the facts of a matter isn't "making excuses" but, keeping an open mind.
Tom January 15, 2013 at 10:30 PM
I'm glad we agree that Prism has financial issues And would explain why their CEO Eugene Diaz was banging his head on the podium during a Townmeeting. I would consider Prism not paying their mortgage for approximately 18 months more than just a tussle As most people would
Gary Englert January 15, 2013 at 10:44 PM
Tom: Well, in the wide wonderful world of business and personal financial problems, cash flow anomalies are probably among the least of them; again, the expectation that anyone has a bottomless well of cash to draw from is simply naive. Again, Prism's arrearage with Wells Fargo is +/- $570,000 and paying it (notwithstanding the usurious interest rate and the onerous restrictions) wouldn't have been a problem had Prism not have to defend itself (and the Township) from a number of frivolous lawsuits, the cost of which comprises much of the $1.4 Million in Township expenses it has reimbursed.
wohopeful January 16, 2013 at 12:08 AM
Prism was well aware of all the restrictions and covenants contained in the contracts, if they had issues with them then shame on them for signing on the dotted line. It certainly speaks volumes about the kind of business people they are if they agree to such onerous contracts and then try to escape them by not paying. They also agreed to the escrow funding to be used for legal defense finds, so again shame on the bad businessmen running Prism for making deals that has them awash in red ink. Certainly no justification to stop paying your contractual obligations unless you don't have the cash which appears to be the situation with Prism.
Tom January 16, 2013 at 12:13 AM
And if I was 7 feet tall I would play for the Knicks
Gary Englert January 16, 2013 at 12:20 AM
Tom: Actually, being 7 feet tall won't automatically get you on the Knicks, the NBA, or even into a decent local hoops league as talent still outweighs tall.
Alan Sanders January 16, 2013 at 02:14 PM
I don't think of Prism as a benevolent mistreated benefactor of West Orange. They went into this to make a profit and they misjudged the financial (excusable) and political landscape. I think that they have been less than candid with the public and the town and that rouses suspicion and concern. Paul's comment also concerns me. If they have such abnormally high vacancies as he says, that's worrisome.
Gary Englert January 16, 2013 at 03:35 PM
Alan Saunders: Believe me, I have no doubt that altruism isn't Prism's reason for being but, it's also a given that a redevelopment project necessitating tax abatement to be remotely possible is a delicate balance to begin with. As to misjudging the political climate, do remember it was far different a decade ago when the Township was encouraging redevelopers to bid on the project; Prism was invited and offered incentives to come here. As to misjudging the financial climate, again, please keep in mind Prism's funding for the project was fully in place until the 2008 financial collapse and Bank of America's withdrawing its commitment, creating the impasse since. As to anyone's unsubstantiated assessment of what they perceive as less than full occupancy at other Prism properties it is just that, unsubstantiated. It's also rather clear that they are relying on income derived elsewhere to carry our downtown redevelopment.
wohopeful January 16, 2013 at 04:05 PM
Prism can play whatever shell games they choose with their money but that doesn't excuse them from paying their bills on time. Habitually late payment of property taxes, unfunded escrow accounts, foreclosure due to non-payment of mortgages, lack of funding for the first phases of the project, etc. are all cause for grave concern that Prism will ever be solvent enough to get this proejct off the ground.
Gary Englert January 16, 2013 at 04:47 PM
Again, Prism can't pay a bill it that hasn't been processed and sent to them, as was the case with replenishing the Township's redevelopment expense escrow account. The Planning Director's extended medical leave resulted in the bill not being calculated or sent and it was paid in full once it was.
wohopeful January 16, 2013 at 07:41 PM
Clearly, Prism received their property tax bills at the same time as those of us who own property in West Orange did. This was not the case of not receiving a bill, this was very apparent attempts to deal with fiscal insolvency through shell games with their creditors. These games only last so long before bankruptcy is knocking at the door.
wohopeful January 17, 2013 at 12:41 AM
As Prism shuffles what money they have around under those shells their creditors are forced to wait. Prism clearly has financial issues and they will only get deeper as they play their shell game and creditors tire of the nonsense and take legal remedies like foreclosure. The deeper Prism gets the less choice they have and bankruptcy becomes the proverbial nail in their coffin. I'm sure Prism had no desire to have their shell game end up with a foreclosed property but it happened as a result of the actions they took in not meeting their contractual obligations. The continued spin is an entertaining read but the time for dreaming up fictitional excuses is long past and WO needs to walk away from Prism's she'll game before we are fleeced like a tourist in Times Square.
Gary Englert January 17, 2013 at 12:59 AM
Wohopeful: West Orange "walking away" is neither possible nor practical as (1) Prism has an approval to build pending only final approval from the state's HPC, (2) Prism owns the subject properties and (3) there is a legally binding agreement in place. Frankly? I rather doubt a court would declare a default in item 3 (above) based on anything that Prism has or hasn't done thus far, which remains ample reason to stay on course. As to the Barton Press site, it really has nothing to do with the approvals in place and its development is at least a couple of years doWn the road.
wohopeful January 17, 2013 at 01:42 AM
Prism has stated they don't have the financing to move forward, so the project is clearly a no-go. But again you offer entertaining reading with the excuses you make up for your future employer.
Gary Englert January 17, 2013 at 02:01 AM
Wohopeful: It remains my mission in life to entertain you having long since concluded you are incapable of being educated. While they (or most anyone else) would be lucky to have me in their employ, I have no relationship of any type with Prism Capital Partners LLC and don't ever expect to have one. That said, Prism has one final piece to complete its approval process (a sign off from the state's HPC) and, once in hand, its final financing should fall into place. Rather than spouting nonsense about what the Township should do, and absent any summary of the possible consequences, I prefer to illuminate the terrain on which we are actually deployed...warts and all.
wohopeful January 17, 2013 at 11:15 AM
Well you should try illuminating with facts rather than your flawed personal opinions and conjecture. Facts remain, that Prism has stated they do not have the funding for the project, they haven't paid theri mortgage and the property has been foreclosed, they are habitually late paying their bills even when the bills were sent to them months ahead of time, etc. these folks are sliding down the failed financial insolvency slope towards bankruptcy. We need to protect the taxpayers interests and move on from this deal before WO is sucked into the failed financial abyss that is Prism.
Gary Englert January 17, 2013 at 03:11 PM
wohopeful: Again, missing from your prose is any real suggestion as to what the Township should be doing to "protect the taxpayers" who, thus far, haven't been adversely effect at all here, as the Township has yet to spend a penny on donwtown redevelopment (it's expenses having been fully paid by Prism) and given that it has received more tax revenues than when the redevelopment properties were partially occupied. The Barton Press property has NOT been foreclosed upon; the matter is being litigated and, in any event, involves the second phase of the project which will not even begin until the first phase is completed. Those are the facts but, should you have anything concrete to add I'm all ears.
Gary Englert January 17, 2013 at 03:38 PM
wohopeful: The classic shell game requires the rube to observe a pea placed between one of three identical shells, then to follow their movements when manipulated on the dealer's table, winning his bet if he then picks the shell containing the pea when the motion stops. I don't see how anything happening here resembles that at all. A project that should have taken 24-30 month to complete has dragged on twice as long and Prism has been carrying it with revenues from other entities it owns and operates. A company reallocating its resources is not a shell game...and if bankruptcy were its end game, it wouldn't be doing it...they'd let the Edison project (a separate corporate entity, by the way) go belly up and continue to operate its profitable, revenue producing businesses.
wohopeful January 17, 2013 at 05:47 PM
It is abundantly clear that business with Prism is going to end up unsatisfactory as the history has already proven. We have already spent money on valuable resoruces to chase after substantial monies that were due and not paid according to the bills they were presented We have suffered through the bait and switch games that Prism has played and will be forced to accept more and more concessions the further we go forward. Based on the history with Prism it is just a matter of time before they ask for changes to the already overly generous tax abatements they are due to recieve and we have already opened the taxpayer purse when it comes to provided taxpayer obligated bonds, hust a matter of time before they want access to more of that putting those of us who own homes here at even more risk. The time is now to sever the ties of a bad business deal that never should have gone forward to begin with. Prism own the property and can do as they wish with it within the regulations of the requisite planniing boards, but WO taxpayers should not be forced to go along for a ride which is clearly not in our best interests.
Gary Englert January 17, 2013 at 06:04 PM
wohopeful: Lacking both accuracy and substance you still haven't articulate just what specific course of action the Township should be taking that it isn't. Fact: The project hasn't cost the Township a penny; all costs have been totally reimbursed by Prism. Fact: There has been no "bait and switch" in any way, manner or form; the only change of substance being the residential units will now be rentals as opposed to condos and that is solely a function of what contruction financing is now currently available. Fact: With or without downtown redevelopmnt, the Township will (likely sooner than later) have to bond to replace the 100 year old infrastructure surrounding the battery factory. This IS something it routinely does, year in and out, tbroughout town. It's far better to do it in concert with redevelopment as Prism will provide dedicated funds to pay for it...period.
wohopeful January 17, 2013 at 07:08 PM
Mr. Englert, It is clear from your comments that you choose not to keep an open mind and review the many facts myself and others have provided here, including statements by Prism Management themselves. Instead you choose to attempt to demean others and pretend like the facts have not been presented to you when they clearly have. It is your choice to ignore the facts but it doesn't change the facts or mean that they don't exist or were never presented to you. A position of Ignorance is your choice but certainly not the position those of us who pay taxes and support the town of West Orange are likely to take up.
Paul P January 17, 2013 at 08:44 PM
Here's an old but good write up on the history of the Organon - Main Street - Edison building fiasco, as written by the attorney the township hired to determine if there was a conflict of interest with township attorney working for Prism as well as West Orange. http://pdfserver.amlaw.com/nj/trenk.pdf Though the attorney found no conflict of interest , his so called investigation shes some light on the process that brought us to this point.
Gary Englert January 17, 2013 at 10:06 PM
wohopeful: As I remain ready and willing to hear your grand plan asx to what the Township should be doing to move redevelopment forward and/or improve its financial position, I most certainly have an open mind. Unfortunately, rather than providing anything substantive, you continue the same inaccurate tripe that accomplishes and says nothing. There has been no "bait and switch or any "shell game." There is scant clear evidence of "bankruptcy or insolvency" but, more than ample evidence of Prism having significant income and resources tos sustain our project while pursuing others. This remains a process playing out during the worst economy in our lifetimes and it's also a process that hasn't cost the people of West Orange a penny to date.
john anthony prignano January 17, 2013 at 10:35 PM
wohopeful George Orwell, 1984; "He who controls the past controls the future. He who controls the present controls the past."
wohopeful January 18, 2013 at 01:40 AM
Prism is exhibiting very serious financial problems as they habitually pay their property taxes late, are unable to maintain the contractual escrow funds, have not paid their mortgages, have had properties foreclosed upon, etc. Prism has stated that they do not have the funding to start the project and there is no timeline when they will ever be financially solvent to do anything to downtown West Orange. The time has come for the township of WO to sever ties with Prism and move on before we are embroiled in more of their shell games, bait and switch, double talk and financial troubles. It is clear that this project will never come to pass with the involvement of Prism as they have stalled the project for at least six years. This travesty that is Prism cannot be allowed to continue endlessly and drag the good hard working taxpayers down with the financial collapse of Prism. The answer is clear and the time is now, we must sever the relationship as a result of Prism's numerous defaults and move on. Prism may pursue other remedies for their real estate.
Gary Englert January 18, 2013 at 03:17 AM
wohopeful: Your repetitive, inaccurate nonsense aside, the Township can't unilaterally "sever its relationship with Prism" without due cause which it has yet to be presented with and I'm reasonably sure no court would rule that it had. Your suggestion simply opens a can of worms that would result in significant legal expenses being incurred by the Township when none currently are...not to mention the loss of revenue that it is currently receiving. Without the promise of a PILOT program, the redevelopment zone would become worth a fraction of what it is currently assessed and Prism would be entitled to relief. Difficult as it may be for you to do, you need to think thes through.
Jerome Leslie Eben, AIA, PP January 18, 2013 at 04:30 PM
All: while everyone has points + & - on this project, please go all the way back to my original message. The site looks like something out of the TV Show the Walking Dead. In fact may be Prisim can make some money using the site as a movie set. In the meantime, where are the Township's Zoning Officer and Property Maintenance people. If any of our properties looked this bad, we would be slapped w/a fine. Make Prisim put back the green screen until they get started, so at least the site will not be Prisim testified before the Planning Board that the pre-cast conreted components for the Parking Garage are in the yard of the pre-caster out in PA. Has anyone from the township actually seen these components? Jerry such an eye sore.

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