FROM THE CRANFORD CHRONICLE (NJN Publishing)
Thursday, March 08, 2007
By LESLIE MURRAY
CRANFORD -- Located at the intersection of South and South Union avenues, Cranford Crossing looms over the other buildings in the downtown. Lately, a rash of bad news about the project has also loomed over public debate.
The string of announcements began last month with the news that the residential units at the site would be rental apartments, not purchased condominiums, as both the township and the developer had hoped.
On Feb. 12, Brian Silbert of Silbert Realty, the leasing agent for the retail component of the project, said that the retail spaces have had "challenges" attracting quality tenants because of insufficient depth and proximity to parking.
On Feb. 27, Mayor Michael Plick said that project developer Cranford Building Associates (CBA), a branch of Kushner Companies, was overdue on a $50,000 debt service payment for the 70 parking spots the company is leasing in the municipally owned parking garage. In a statement issued the following day, Sam Gershwin, president of Westminster Communities, another Kushner affiliate, said the payment would "be remitted shortly."
Finance Officer Tom Grady said Monday the developer had told the township the payment was forthcoming, but it still had not been received. Grady could not be reached Tuesday for an update on the issue. The payment was due Feb. 15.
Asked about the current relationship between the township and CBA, Plick said, "They're obviously a business entity within Cranford. I believe this move by the developer puts a strain on that relationship."
"We are not taking this lightly," added Plick, who noted that in an age of "wire transfers," a payment can often be made in hours, not days.
Though the township has authorized $7.4 million in bonds to pay for construction of the garage and owns the facility, the developer, which owns the retail and residential components of the project, is obligated to lease 70 of the 300 spaces for use by its residential tenants.
According to Grady, CBA is due to pay the township $100,504 this year in debt service for the 70 spots. Over the 30-year life of the garage bonds, CBA is responsible for $3.79 million for the spots, he said.
Plick said last week that the redevelopment agreement allows for a number of legal options in case of breach of contract, including taking back the 70 spots from the developer, rescinding the payment in lieu of taxes (PILOT) program under which the developer receives partial tax breaks for the first few years after the project is completed, or even taking the entire property from CBA and selling it to another party.
This week, he said the township would avail itself of legal action if that became necessary.
"Two things could happen. They make the payment, or they don't cure the breach and the township takes legal (action)," he said. "We're hoping it's the first."
Objections of a different sort came this week from downtown property owner Paul LaCorte, a former mayor who is currently chairman of the Downtown Management Corporation. Though LaCorte has been critical at times of Kushner, he also found fault with the way township officials had handled the most recent news. Board members for the DMC, which is supported by tax revenues, did not know about the missed payment until Plick made his announcement at the Feb. 27 meeting, LaCorte said.
"For us to receive notice via TV-35 puts (the DMC) in an awkward position," LaCorte said this week.
"We're responsible for the economic viability of the downtown," he added. "The DMC should have been on the heads-up list as soon as it happened."
Plick said the announcement, made a week after a DMC board meeting and over 12 days after the payment was due, was a "matter of legal timing" designed to give the township time to notify CBA of the breach of contract, he said.
Still, LaCorte said there has been a negative impact on the board of the DMC, because "when information is not flowing it puts the DMC in a bad light."
Also, LaCorte said "there is no relationship" between the DMC and Cranford Crossing, even though the redevelopment project falls within the boundaries of the Special Improvement District. "We are notified of developments at Cranford Crossing the same way an average citizen is," he said.
While he expressed disappointment about the latest news, LaCorte cast blame on the township officials for not immediately disclosing the breach as well as the developer for not making the payment on time. "Westminster is no more of a villain then the local bureaucracy," LaCorte said.