BERKELEY HEIGHTS, NJ – The Municipal Complex Project now has a redeveloper, a $32 million price tag and with it, a different impact on municipal taxes. Rather than costing taxpayers $78 more in municipal taxes a year, it will cost owners of the average assessed home $3. If all goes as planned, site work will begin on the project in August, with fencing going up around the site and shovels in the ground.
As of the end of the Tuesday, June 26, meeting, the redeveloper is Epic Management, Inc., Piscataway. The council authorized the conditional designation of Epic Management based on the unanimous recommendation of the Selection Committee during a May 22 Executive Session. The agreed upon Guaranteed Maximum Price (GMP) of the project is $26,828,574.
The cost of the total project is now estimated to be $32 million, which reflects changes in prices for a slightly larger than originally proposed salt dome – an increase of $45,000; site-work, abatement and demolition, which increased $2,375,000 and the cost of the municipal building, which increased $2.5 million. All of these are included in the GMP.
The DPW facility renovations have been dropped, a savings of $1,545,000; costs of equipment, furniture, moving and data/telecommunications increased $1.1 million and soft costs and contingency costs dropped $475,000.
Township Planner Mike Mistretta described the increases. Storm water management is responsible for about $1 million in additional costs, and will, once the project is done, not be visible, as most of it will be underground. Water will be collected and directed to a large area of wetlands on the property, where it will be absorbed. In the end, though, the majority of the additional costs have come because the economy has improved, a lot of building projects are being undertaken in New Jersey.
The higher cost estimate means “the township is required by state law to appropriate the total estimated project cost in order to certify available funds for the two projects,” according to a handout on the estimated tax impact of the project prepared by CFO Michel Marceau. That does not mean, however the township is required to fund the entire project.
Residents expressed concerns about the increased cost of the project and many asked whether the money from the sale of the Hamilton Avenue property will be used to pay off bonds. The mayor and council asked Township Attorney Joe Sordillo to amend the bond ordinance before the vote was taken. Sordillo dictated a clause to be added to the ordinance requiring any proceeds from the sale of the Hamilton Avenue property be used for either direct payment of the cost of the improvement or pay down of the bonds.
According to Marceau’s presentation on the “Estimated Tax Impact” of the increased $4 million appropriation and increase in Bond Anticipation Notes interest rates, the “anticipated average annual debt service decreased by about $351,713.” Annual tax revenues from Toll Brothers Hamilton Avenue development and other redeveloper PILOT payments have gone up to $1,124,420, which results in the $3 per year tax increase for owners of the average assessed home.
A full copy of Marceau’s financial analysis should be found on the township’s website. The ordinance, and the meeting agenda, can be found here.
Following almost four hours of discussion, the council returned to its regular agenda. First members voted on a resolution conditional designation of a developer -- Epic. Councilwoman Susan Poage voted "No." Councilman Mike D'Aquila was not present and the remained of the council voted yes.
Then council members voted to introduce a bond ordinance providing “a supplemental appropriation of $4 million for aid to the municipal complex redevelopment project and authorize the issuance of $4 million in bonds or notes by the township.” Councilwoman Poage again voted against the introduction of the ordinance.
The public hearing on the ordinance will be held at 7 p.m. Tuesday, July 10, in Town Hall, 29 Park Ave.
The township’s Bond Counsel Matt Jessup laid out a timeline of the next steps in the process. Each of the dates is “anticipated.”
1. Complete the negotiation of the Redevelopment Agreement – July 6;
2. Council approves Redevelopment Agreement – July 10;
3. Adopt Supplemental Bond Ordinance – July 10;
4. Execute Redevelopment Agreement – July 11;
5. Redeveloper begins construction – during August.
See the entire meeting, on LiveStream here, including resident’s questions. The video is not yet on the site, but should be soon.