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The Use of Publicly Owned Property to Facilitate PPP/Redevelopment Projects

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  • 1. New Brunswick: Maximizing the Benefit of Publicly-Owned Property Panelists: Mitchell Karon, Executive Director – Parking Authority of the City of New Brunswick (NBPA) Cheryl J. Oberdorf, Esq. – Wilentz, Goldman & Spitzer, P.A., Bond Counsel and Special Counsel Parking Projects Undertaken by the Parking Authority of the City of New Brunswick In Redevelopment Areas
  • 2.
    • Case Study I - Spring Street Project
  • 3. Case Study I - Spring Street Project
  • 4.
        • Two contiguous surface parking lots owned by NBPA in government business district redevelopment area; 91 spaces, land underutilized, not subject to taxation
        • Two surface lots purchased by Redeveloper from NBPA
        • Redeveloper owned and privately financed Redevelopment project in redevelopment area consisting of 422 parking spaces, office space and 121 residential units
    Case Study I - Spring Street Project
  • 5.
        • Project completed, awaiting final CO’s
        • Tax abatement – 15% - Annual Gross Revenue Method
        • NBPA to lease 94 spaces for daily/hourly parkers from Redeveloper
        • NBPA will receive revenue generated from those spaces and will be responsible for general maintenance and housekeeping of those 94 spaces
    Case Study I - Spring Street Project
  • 6. Case Study II - New Street Deck
  • 7. Case Study II - New Street Deck
  • 8.
      • Surface lot owned by NBPA
      • NBPA constructed 430 parking space deck next to family courthouse
      • Middlesex County College owns office space within the footprint of deck
      • Redevelopment project in redevelopment area
      • Additional land acquired by NBPA and Redeveloper
      • Land swap to assemble remaining parcels for deck
    Case Study II - New Street Deck
  • 9.
      • No condemnation
      • Construction contract publicly bid by NBPA
      • NBPA issued revenue bonds to finance the deck; revenues from operation of all facilities of NBPA are pledged to pay debt service on bonds
      • County paid for judges’ spaces and associated construction
      • County college paid for construction of its office space
    Case Study II - New Street Deck
  • 10. Case Study III - Morris Street Deck
  • 11.
        • Redevelopment project in redevelopment area
        • Land acquired by Redeveloper and NBPA
        • Land swap to assemble parcels for deck
        • No condemnation
        • Tax abatement – 15% - Annual Gross Revenue Method (contiguous dormitory facility owned by 501(c)(3) entity)
        • 820 space parking deck constructed to service dormitory, publicly owned hotel/conference center and public uses
    Case Study III - Morris Street Deck
  • 12.
        • Issues – demand study assumptions and timing for construction and completion
        • Developer’s Agreement executed with Redeveloper for construction of deck
            • GMP
            • No fixed completion date
            • No liquidated damages
        • NBPA financed land acquisition costs and deck through the issuance of revenue bonds
    Case Study III - Morris Street Deck
  • 13. Case Study IV - Plum Street/French Street Deck
  • 14.
        • Redevelopment project in redevelopment area
        • Land acquired by NBPA and Redeveloper
        • Land swap with Redeveloper to assemble
        • parcels for construction of deck
        • No condemnation
        • Tax abatement – 15% Annual Gross Revenue Method (office and residential components)
        • 854 space deck constructed to meet public parking demands in redevelopment area
    Case Study IV - Plum Street/French Street Deck
  • 15.
        • Developer’s Agreement executed with Redeveloper
          • GMP
          • Scheduled completion date – March 31, 2007
          • Liquidated damages equal to daily debt service in the event deck is not open by scheduled completion date
          • In the event of construction savings, savings shared between Contractor, Redeveloper and NBPA
          • NBPA is an obligee on construction contract in the event of a default by either Contractor or Redeveloper
        • NBPA financed land acquisition costs and construction of deck through issuance of revenue bonds
    Case Study IV - Plum Street/French Street Deck
  • 16.
    • Basis for Transactions
        • N.J.S.A. 40A:12A-39(f)
          • Any public body may do all things necessary or convenient to and in the planning, undertaking, construction or operation of redevelopment projects
        • N.J.S.A. 40:11A-6
          • Any parking authority is authorized to plan, design construct…such parking project as, in the opinion of such authority, will provide an effective and satisfactory method of promoting the purposes of the authority
          • Any parking authority may sell, transfer and dispose of any property or interest therein at any time acquired by it upon such terms and conditions as it may determine, with or without public bidding
  • 17.
    • Points to Consider
        • Allocation of costs between Redeveloper and NBPA
        • Economic viability of project and assumptions related thereto
        • Defaults of Redeveloper – construction and performance
        • Remedies of Redevelopment Agency in the event of a default by Redeveloper
        • Can a Parking Authority be designated a Redeveloper?