Borough Council postponed a public discussion last week that would have addressed an ownership transfer in Witherspoon House—"Building A"—of the Borough's downtown redevelopment project.
The transfer would see ownership move from developer Nassau HKT Urban Renewal Associates, LLC (NHKT), to Witherspoon Urban Renewal Associates, LLC—both groups have the same principals, Jack Morrison, owner of Witherspoon Grill, located in Witherspoon House, and Robert Powell, NHKT principal.
The move is fairly standard: ownership transfer would result in permanent financing at lowered interest rates, resulting in a financially viable Borough building owner. However, Mr. Powell and Mr. Morrison are asking the Borough's permission to amend the developer's agreement to allow an early ownership transfer of Witherspoon House. Currently, the developer's agreement stipulates that the properties cannot change hands without the entire first phase of the project being completed, and, as the plaza and garage, whose leaky basement floor, has delayed the entire project, an amendment is required.
Council is likely to revisit the issue in an upcoming public session, but in the meantime, the partners in play are trying to work out glitches that could further delay a project that is already behind schedule.
"It's taking more time than we expected it to take, but I think both parties are slowly but surely resolving the outstanding concerns that we have about this," Mr. Powell said Tuesday, adding that common ground is being sought among more vocal members of Council who want to curb the deed transfer of Witherspoon House until the pergola and garage are completed.
Councilman Roger Martindell, who had prepared a statement for Borough Council at its intended discussion last week, worried about ongoing litigation, a series of mechanics liens, between the Borough and NHKT subcontractors. "If we allow the transfer to go ahead, we don't want to have to continue to subject ourselves to legal fees," he said, estimating up to $60,000 in fees thus far.
A resolution is in order, Mr. Powell said, but he could not offer specifics: "We have resolved substantially all those claims, with some legal detail needed to be finalized." Mr. Powell added that progress had been made with Borough Council in the last month because subcontractor complaints had been addressed: "the concern has dropped dramatically."
Mr. Martindell also pointed to the wet garage basement that has precluded a permanent certificate of occupancy from being issued for the structure. NHKT is currently undergoing a remediation effort where an added concrete slab will be bolted down, preventing any further leaking.
The garage should be repaired by mid to late summer, Mr. Powell said, adding that a contractor has been engaged with work beginning in July.
Borough Administrator Robert Bruschi, in an interview last week, said he was comfortable with letting NHKT cordon off Witherspoon House for ownership transfer, indicating that financial guaranties would remain in place, effectively safeguarding the Borough from losing money. Mr. Martindell said he plans to publicly address his concerns when the Borough revisits its NHKT discussion.