Lambertville wants to take $250,000 from a 2-year-old loan to help purchase 22 acres on Music Mountain.
By: Linda Seida
LAMBERTVILLE The City Council has agreed to ask the state Green Acres program to allow the reallocation of $250,000 from a 2-year-old loan to help finance the city’s purchase of approximately 22 acres on Music Mountain.
In November, officials said the purchase is expected to cost about $1.4 million. The city is in the process of obtaining another appraisal before moving ahead with the purchase.
If the state allows the reallocation, the result would be a slight savings for the city, according to Mayor David Del Vecchio.
By reallocating the Green Acres money toward the purchase of the land to be preserved on Music Mountain, the city would save 2.5 percent on $250,000 over a period of 20 years, according to Mayor David Del Vecchio.
If the city must finance the total purchase price of the land, estimates said the yearly payback to the city would be approximately $108,000 at an interest rate of 4.5 percent.
Yearly payments would drop to about $100,000 if Green Acres allows the $250,000 loan to be applied to the land purchase with an interest of 2 percent applied to the $250,000 over a period of 20 years, according to Mayor Del Vecchio.
"It’s just like saving 2.5 percent on your mortgage," Mayor Del Vecchio said. "It’s real money."
The council decided to make the request during a special meeting held Feb. 8.
Voters last year agreed to pay for the land purchase with a 2-cent open space tax. Right now, the purchase means about $52 more in taxes for the owner of a home assessed at the city average of $260,127.
The tax would be based on property value. The owner of a home assessed at more or less than the average would pay a correspondingly higher or lower amount.
Those figures are based on "the worst case scenario," according to Mayor Del Vecchio. That scenario would occur if the city did not receive any grant money to help pay for the purchase.
"It would be a 2½ percent savings on $250,000, which is a nice savings if they agree to do it," Mayor Del Vecchio said.