The City Council voted 5-3 on April 29 to guarantee the Section 108 Department of Housing and Urban Development loan.
Council members David Donnelly, Steven Fulop and Nidia Lopez voted against ordinance to back the loan.
Councilwoman Lopez said it was not worth the risk to back redevelopment in an area already thriving.
“This is an area that doesn’t need any more rebuilding,” said Lopez. “Why take a risk on something that may not be secure? If it were in Ward F, I would consider it.”
Councilman Donnelly agreed.
“Section 108 loans are a great way to go, but there are places on Monticello and Bergen avenues that could use it more,” Donnelly said.
“Those areas need the push.”
Council members Michael Sottolano, Peter Brenna, Mariano Vega, Bill Gaughan and Willie Flood supported the move to back Tramz. Councilwoman Viola Richardson was absent.
The city could lose its federal Community Development Block Grant funds, distributed through HUD, if the developer defaults.
Tramz has put $1.25 million in reserve to cover payments over three years, should they default.
The project calls for a 300-room hotel, parking garage and retail space coupled with a 470-unit condominium complex.
The council had the property appraised at appraisal $27 million, after the developer's appraisal of $50 million. The city sold the land to owner Tarrunumn Murad, of Tramz, who find a contractor to remediate the contaminated site. In 2008, the city sold the property to Tramz for $15 million, $12 million below the appraised value.
Post a Comment