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Wednesday, October 31, 2007

More financial delays plague downtown development

The Palmer administration continued its battling with a prospective developer this week, with government officials balking at the developer's requests for additional financial support from the city for the project, which would revitalize an abandoned portion of downtown into a thriving mixed-use center.

City officials receiving a Tuesday presentation from the developer - Full Spectrum of New York - said the developer was renneging on earlier plans that did not include the financial request, which would have the city place tax payments into a bond to help finance the project instead of heading into city coffers.

City officials said the proposal was a Payment in Lieu of Taxes in disguise that had never been part of the development deal previously.

"The mechanism is a PILOT," said City Housing and Economic Development Director Sasa Olessi MontaƱo in the Times of Trenton Wednesday.

The developer is asking for more financial assistance from the city than originally envisioned, but one would think Trenton officials would assist, in any way they can, someone proposing to turn a group of abandoned buildings in a prime downtown location into a massive mixed-use development of 760,000-square-feet.

This same project was supposed to have had a ground breaking over a year ago, according to statements made by Mayor Palmer, but it seems the city and the developer are having trouble reaching any type of consensus on the project.

The city seems to place no value in the project and the great, multi-faceted package of benefits it would provide to Trenton, unless they make the maximum profit off of the early stages of the property's development.

It would bring a large population of middle-income people to Trenton that the city lacks, provide numerous jobs in both the short and long-term, and make downtown businesses and projects - like the Broad St. Bank building - more viable.

But no one has yet to move into the Bank's beautiful apartments yet following financial snafus that one anonymous source attributed to missteps by the city's development officials, especially Assistant Business Administrator Dennis Gonzalez.

So it seems Full Spectrum has a good deal of work ahead of it, from haggling with city officials to dealing with their financial development gaffes.

Hang in there Full Spectrum, Trenton needs you!


Old Mill Hill said...

Without a doubt Trenton needs more middle and high income residents to pull it out of it's decades long slump.

Whether the Full Spectrum project is able to help remains to be seen.

For some, the project seems a tad too large-scale. There are questions about the amount of parking, the types of retail, etc.

Also, not all the buildings in the footprint are abandoned or unused. Businesses will be displaced during the construction.

Finally, if we are to believe what we have read/heard from city officials, the developer has not done a good enough job demonstrating the financial viability of the project.

There are definitely two (or more) sides to this story and it will be interesting to see how it all plays out.

Greg Forester said...

This is true, but I personally believe in the viability of such a project.

Regular middle-income folks and others who cannot afford to live in the $600,000-plus per-home suburbs of Trenton and do not like Pennsylvania could look at living in a building such as this, much like the BSB, to which this project would be a perfect partner development.

Officials in the paper questioned studies showing the viabiltiy of the project and $300,000 condos, but there have to be other prices in the project, otherwise it would be completely unviable. Companies like Full Spectrum do not spend money unless they believe a project is viable, no matter how much cash they have.

Those Trenton officials showed their inexperience with when they made those statements.

There are many general studies recently supporting the tendency of the the high-end and low-end real estate markets - like Trenton - benefiting from the current state of the market through people actually moving in, while the rest of NJ loses people. The mayor of West Windsor has been using a similar study to support a proposed mixed-use transit village in the disused part of town around the Train Station, in a similar project.

Since this real estate situation should remain unless major government reforms occur (unlikely), this project could be built in time to take advantage.

Plus, if this is an area of redevelopment, then the city can require the developer to devote portions of the housing in the project to a sane mix of low and moderate-income units that possibly make it more easily swallowed for Trenton development officials.

The businesses that are still open in the footprint, if my memory serves me correctly, include a pawn shop, a check cashing place, and seldom-used bank. I think most people agree we can afford to part ways with these.

Old Mill Hill said...

Regarding the footprint of project:

You would be talking about displacing a law office, a bank, an accounting firm, some artist work space, among others.

There are also concerns from the community immediately adjacent to the project regarding scale and design of buildings. They also, rightfully or wrongly, feel left out of the process.

It would seem that maybe development should be done on a somewhat smaller scale: get the BSB on line; help the developers of the Commonwealth Building to get that project up and running; work on stabilizing and improving neighborhoods ala HHG, Roebling Development, et al.

Plunking a massive, big-ticket development downtown hasn't worked to date (the big office building at W. State and Willow is an example...I believe there was originally supposed to be a companion edifice erected) Downtown is still a Mon-Fri, 9-5 place.

Granted, prior projects haven't included a residential component. So mixed use seems to make sense, but does it make dollars?

How much of the commercial space at the BSB has been rented? As we hear it, there just aren't any takers.

Without a doubt, the powers that be in the City of Trenton have mishandled many development projects. Maybe they should quit trying to play in the big leagues until they get their act together.