In Last-Minute Move, City Salvages $3.1 Million

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City Hall
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PATERSON, NJ - Less than a week away from losing $3.15 million in federal funds for affordable housing, Paterson officials beat the clock Tuesday night by allocating the money to two proposed projects.

The City Council on Tuesday night approved resolutions that will earmark $2.6 million of the federal money to Zion Community Development Corp's plans to build 10 units in the 5th Ward near the corner of Summer and Pearl streets and $555,491 to the Alpert Group for 99 units in the 6th Ward on Gray Street, part of the historic Reinhardt Mills site.
The United States Department of Housing and Urban Development (HUD) warned Paterson of the danger of losing the money in a letter dated June 20. The letter said the city had until July 31 to commit the money to specific projects or it would lose the funding. Paterson also received a warning about the potential loss of the money back in March, according to HUD documents. The city previously had allocated $26.32 million of its $29.47 allotment under HUD's Home Investment Partnership Program (HOME), the documents say.
 
In the past two years, the city has lost more than $1.1 million in federal affordable housing funds because it failed to come up with ways to spend the money.
 
The resolutions did not indicate how many other developers - if any - had applied for the funding. 
 

Zion Community Development, a Paterson-based nonprofit, says its project, Zion Plaza, would cost $3.2 million and the average monthly rent would be $1,182.
 
The Alpert Group, a for-profit firm based in Fort Lee, says its project, called Paterson Commons II, would cost a total of $23 million, according to documents attached to the resolution. Most of the apartment would have two-bedrooms and the average rent would be $1,037 per month, documents indicate.
 
At one point Tuesday night, the council seemed ready to reject the Alpert Group's project because the developer was seeking to make an annual payment in lieu of taxes (PILOT), instead of paying regular property taxes. Joseph Alpert, the company's president, said the PILOT was needed as part of the project's application for $17 million in tax credits.
 
But when it became clear the city council wasn't going for the PILOT, even if it meant risking losing the $555,000 in federal housing funds, Alpert dropped his request for the special tax status.
 

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