$2 Million Guaranty From Restaurateur Revives NHKT Project
Jack Morrison, owner of the Nassau Street Seafood & Produce Co. and Blue Point Grill, has joined downtown developer Nassau HKT & Associates (NHKT) with a $2 million cash guaranty to ensure that the developer will be able to move forward with the building of a five-story building on the Tulane Street surface parking lot. The new partnership will also correct water seepage in the Spring Street garage that has, for now, halted the entire development project. The Tulane Street building will include a grocery store on the first floor and residential units on the remaining floors.
NHKT principal Robert Powell appeared before Borough Council last Tuesday to offer not only an update on the stalled project, but to announce a recapitalization that will "strengthen our ability to continue work," Mr. Powell said.
A stipulation in the agreement between the Borough and NHKT was that Phase I of the project, which includes the plaza next to the library, the adjacent Witherspoon House, and the Spring Street municipal garage, must be completed before the planned five story building can be built on the Tulane Street lot. While the structures of all three are virtually complete, a permanent certificate of occupancy (CO) has yet to be acquired for the garage because of the wet basement. The Tulane Street building, "Building C," was originally scheduled to begin construction by Labor Day 2004. With the addition of JB Princeton, whose principal is Mr. Morrison, NHKT hopes to "face the work we have in the first phase and proceed as quickly as we can with the second phase," Mr. Powell said.
A Princeton resident, Mr. Morrison, has "substantial real estate holdings" in town, Mr. Powell said, but also has a vested interest in the project, as he is the proprietor of the Witherspoon Grill, the steak house that will open on the plaza at an as-yet-undetermined date. Mr. Morrison was first introduced to Borough Council at a June 14 closed session hearing ‹ one day before Council could have pulled the developer's letter of credit. Mr. Morrison's inclusion in the project ensures that NHKT will remain as the developer. Several months after the garage opened, a series of cracks began to form in the basement floor, where about 45 parking spaces are located. NHKT brought in an independent engineer who produced a report that essentially instructed the developer to find additional support to suppress the hydrostatic pressure formed by the underground spring ‹ part of Harry's Brook. The option put forth in the report, Mr. Powell said, was that the basement could be strengthened by installing rock anchors and by placing a sandwich slab on top of those anchors. He said that design teams working on the project were being "pressured" to arrive at a design for any work within the next few weeks. No pricing was given for the additional work needed for the garage, but costs are expected to surface once a design is chosen.
Although there were concerns that Borough monies would be lost due to the reduction in parking garage spaces and the closure of nearly one row of parking on the Tulane Street lot, Borough Administrator Robert Bruschi said the financial hit was minimal, because the original plan had called for the garage to be at full capacity with the Tulane Street lot completely closed. Since that lot was still partially open, the Borough was able to mitigate the impact, Mr. Bruschi said.
Councilman Roger Martindell, who voted against the original development project, said this delay poses a "unique opportunity" for another look at the agreement that would address concerns regarding the designation of affordable residential units in Witherspoon House and Building C under guidelines put forth by New Jersey's Council on Affordable Housing, as well as the question of rent payment for the as-yet-unbuilt Building C, set to begin in April 2006. "In any project, there are things that are delayed, or not done, or that need to get completed," Mr. Martindell said, adding that his questions first began to surface when it was discovered that the Borough did not have a performance or completion bond with NHKT, but a letter of credit. "I know we haven't given the public any sense of where the project stands until tonight," Mr. Martindell said, adding that instead of "patting ourselves on the back" for recapitalizing it, Council should avoid "making the mistakes we have in the past year." Mr. Martindell's concerns were delivered in the form of a 17-page memorandum issued to the other members of Council prior to NHKT's testimonial. A further financial review is slated to be heard at Council's July 12 session.
The amendment to include Mr. Morrison's group, JB Princeton, and to stipulate a change in 20 percent or more of the stock, partnership, or membership interests under the Borough's Redevelopment Agreement, was passed by Council five to one, with Mr. Martindell dissenting.