ROGER MARTINDELL
Member, Princeton Borough Council
WALTER EMMERICH
Dodds Lane
To the Editor:
Princeton Borough's governing body will soon decide whether to take the next step in the downtown redevelopment project. That decision affects Borough taxpayers.
The downtown redeveloper, NHKT, and its new partner, WURA, seek a long-term loan at a favorable interest rate to save themselves hundreds of thousands of dollars in financing costs. Their lender requires that NHKT transfer its interest in Witherspoon House, the multi-million dollar structure next to the municipal parking garage, to WURA. The transfer is subject to Borough approval. Should the Borough approve?
Maybe. The Borough wants to complete the downtown redevelopment and therefore is inclined to support the transfer. But what risks exist in Borough approval, and what should the Borough negotiate as a condition of approval?
The Borough's main concern is that Witherspoon House secures many obligations to the Borough. Once the building is transferred, that security is gone. Without that security the Borough faces significant risk in relying on NHKT to make good on its obligations to the town.
First, the Borough has been named as a defendant in lawsuits filed by contractors who built the municipal garage, plaza, and Witherspoon House, but were not paid by NHKT. If the Borough is not successful in the defense of those claims, it will spend hundreds of thousands of dollars to satisfy the contractors. Clearly, the Borough should not approve the transfer of Witherspoon House until the suits are settled.
Second, there are numerous "punch list" items yet to be finished in the project: for example, the pergola to be installed between the plaza and the stores on Spring Street. Will NHKT have the financial wherewithal to complete the items, or will the Borough have to do so?
Third, the Borough has incurred tens of thousands of dollars in legal bills, and additional tens of thousands of dollars in staff time, to defend lawsuits filed by the unpaid NHKT contractors and to negotiate the refinancing of the project — more than $100,000 and still climbing. To date, NHKT and WURA have refused to pay the Borough's legal and staff costs. Isn't it reasonable that they be required to do so, especially since the Borough approval they seek will save them hundreds of thousands of dollars in financing costs?
Fourth, the municipal parking garage leaks ground water. The cost of repair has been variously reported at $400,000 to $700,000. NHKT is obligated to cover that cost. The Borough has hired an independent consultant to review the proposed fix. The Borough has yet to receive a written report from its consultant opining whether NHKT's proposed fix is feasible and whether the warranties covering the fix are appropriate. In the absence of such report, the Borough runs the risk of having an incomplete garage with impaired structural integrity.
These and other issues confront the Borough in considering whether to permit NHKT to transfer Witherspoon House to WURA. The developers assert that the Borough need not feel insecure by the transfer because the developers posted substantial escrow funds to settle the lawsuits, complete the project's punch list, and repair the garage. But the Borough does not have unilateral control over those funds and must obtain the developers' consent for their release. What if the developers refuse to release the escrowed funds?
In sum, there is good reason for the Borough to assist in completing the downtown redevelopment by approving the proposed transfer of Witherspoon House. But there remain significant risks also. The risk-reward analysis should be carefully conducted in public.
ROGER MARTINDELL
Member, Princeton Borough Council
To the Editor:
In his letter to the editor (Town Topics, July 12), William B. Stephenson objects to the attempt by Morgan Estates, LLC to gain a zoning variance for senior housing on Bunn Drive. After questioning the legitimacy of the proposal, Mr. Stephenson asks us to believe that "this is not senior housing."
If something looks like a duck, walks like a duck, and quacks like a duck, it's a duck. Similarly, if a project qualifies by law as senior housing, conforms to zoning regulations for senior housing, and is approved as senior housing by overseeing agencies and committees, it's senior housing.
WALTER EMMERICH
Dodds Lane