Obstacles that continue to hold up Princeton Borough's downtown redevelopment project surfaced again last Tuesday as the municipality attempted to move forward on a project that's now about a year-and-a-half behind original developer estimates.
The Borough is faced with two main issues: the transfer of ownership from the municipality to developer Nassau HKT & Associates (NHKT), as requested by the developer's executive partners, Robert Powell and Jack Morrison, owner of the recently-opened Witherspoon Grill, and, more troublesome, a series of claims and mechanics liens filed by two subcontractors against former general contractor, Troast Construction Company.
Six claims have been filed against the Borough concerning Witherspoon House, the building that faces the Library plaza. If a subcontractor on a public project complains of a lack of payment by the general contractor, the result is a municipal lien. If the project is private, then a mechanics lien is filed with the owner, which, since the transfer of ownership has yet to take place. is still the Borough.
According to Borough Administrator Robert Bruschi, Borough staff and NHKT are looking to pay out the claims through various accounts, including an escrow account that has been established to guarantee claims payments. Mr. Bruschi also said there is a $1.4 million unpaid balance of the redevelopment project budget that could finance claims settlements.
The claims boil down to three categories: those related to the Spring Street Municipal Garage and the plaza; those related to Witherspoon House that are against the Borough; and those against the general contractor that are solely related to Witherspoon House.
Mr. Bruschi indicated that the garage and plaza claims could be paid out through the abovementioned $1.4 million fund and that the claims against the Borough related to Witherspoon House could come out of a $1.7 million escrow account.
Once Phase I is completed, it will set into motion the transfer of ownership from the Borough to the developer and will also facilitate progress toward breaking ground on the Tulane Street surface parking lot—the future site of Building C, a five-story apartment building with a grocery store on the first floor. For ownership transfer to occur, a certificate of completion must be granted by the Borough's Engineering Department, and the transfer must then be approved by Borough Council—a move that if done early, Mr. Bruschi said, would benefit the NHKT's financing of the building, and, in turn, help the Borough in the long run. "Ultimately, I see that as helping the Borough's financial position down the line if we have a permanent structure in there," Mr. Bruschi said, adding that the transfer would help facilitate the permanent financing of Witherspoon House.
Otherwise, the transfer will have little impact on the Borough, he added, and could be implemented as early as Council's March 14 session.
Roger Martindell, who had voted against the redevelopment project at the outset, worried that if the Borough were pay the claimants out of the unpaid $1.4 million project balance, the Borough would then be caught in the situation of relying on the $1.7 million escrow to cover liabilities.
The Borough cannot access the escrow fund without the go-ahead from NHKT, and if that doesn't happen, Mr. Martindell said in a presentation last Tuesday, the Borough could shoulder as much as $1.2 million in claims, after the $1.4 million unpaid project balance is used.
A situation where the Borough would not be able to access the escrow is unlikely, but the risk is there, Mr. Martindell said.
In a memo to the rest of Council, Mr. Bruschi, Borough Engineer Carl Peters, and Borough Attorney Michael Herbert, Mr. Martindell echoed a previous request to go straight to the escrow to resolve claims, in case those monies might not be available in the future.
Mr. Powell has said that the funds available are sufficient to handle the various claims.