Downtown Developer Looks to New Partner For Stalled Project
The developer and general contractor of Princeton Borough's downtown development project, Nassau HKT Associates (NHKT), has brought on a new financial partner to mobilize the project that has, in essence, stalled since hitting some logistical snares.
Jack Morrison, owner of Blue Point Grill and Nassau Street Seafood and Produce Company, has been confirmed as the proposed new partner in the venture, pending Borough Council approval. Mr. Morrison, whose name has long been tied to the development project as the proprietor of the not-yet-opened Witherspoon Grill on the plaza adjacent to the Princeton Public Library, is expected to be brought on as a partner with NHKT, providing a cash guaranty until the Borough can secure a letter of credit, according to Borough Administrator Robert Bruschi.
The developer's agreement that the Borough wrote with NHKT Principal Robert Powell for the entire redevelopment project made NHKT the ostensible general contractor both for building the Spring Street municipal garage and Witherspoon House, the mixed use commercial/residential complex that faces the plaza. Part of that agreement said that if NHKT were to sell its interest in the building, it would have to come before Borough Council for a transfer. The reason for this is that many stipulations of the agreement outline long-term resolutions, such has the developer's obligation to maintain cleanliness in the plaza. "We want to make sure that, as this case is a kind of refinancing, that the original intent will be fulfilled," said Borough Mayor Joe O'Neill in an interview Friday. Borough Council was expected to approve an amendment to the agreement Tuesday night after Town Topics went to press. Additionally, NHKT's Mr. Powell was expected to offer a presentation updating Council on the status of the project.
There are other concerns raised by some members of Council, however, Mr. O'Neill added, including the question of when the payments in lieu of taxes would begin, if the Borough has the opportunity to change the developer, or hold the developer in "default" if it does not fulfill the terms of the agreement.
Other concerns are the parking spaces that remain unavailable in the parking garage because of excess water in the basement and the potential Borough revenue lost when a portion of the Tulane Street Parking Lot was closed when NHKT had preliminary crew equipment on-site to build "Building C" of the development on that lot. Building C, when built, will be a five-story building with 18 one-bedroom and 35 two-bedroom residential units with a grocery store on the first floor. However, the aforementioned flooding in the garage basement has posed a problem for the developer. Water is seeping up through the concrete slabs from the spring over which the garage lies. NHKT cannot acquire a permanent certificate of occupancy for the garage until that situation is corrected.
There are basically two ways to deal with the problem, Mr. O'Neill said: one would be to let the water come up and drain it off into a sump pump, or to put down another layer of concrete to further suppress the spring.
"Frankly, I have no idea which of the two methods is preferable, but until that's fixed, the permanent certificate of occupancy would not be issued," the mayor said.
There is a connection in the developer's agreement between the certificate for the garage and the start of constructing Building C, hence the significant delay to a project that was scheduled to get underway by Labor Day 2004.
Neither Mr. Powell nor Mr. Morrison were available for comment. NHKT could have been held in default by the Borough if it did not meet a June 15 deadline to fulfill its financial obligation. Holding the developer in default would have, in essence, allowed the Borough to remove the developer from the project, find a new developer, or take over the project entirely. But the agreement was fulfilled when NHKT met with Council in a June 14 closed session. It was at that session that Mr. Morrison was introduced to Council as a prospective partner.
The letter of credit is effectively supplied in lieu of a performance or completion bond. The letter, according to Mr. O'Neill, is an alternative means of ensuring the completion of the project. The letter signifies assets that are held in escrow, whereas a bond is more of an insurance policy.