Nassau HKT eyes a transfer for Tulane Street project
By: Courtney Gross
Princeton Borough downtown developer Nassau HKT is eyeing a transfer of ownership for its yet to be constructed five-story mixed-use building slated for the Tulane Street surface parking lot, according to borough officials.
As part of the borough and the downtown developer’s closed-door negotiations, the downtown developer is considering using a separate entity to construct the long-delayed Building C, much like the developer’s transfer following the completion of Witherspoon House during the first phase of the two-phased project.
"There is talk about a second entity that will construct Building C," said borough Administrator Robert Bruschi. "Whatever the entity is, the financial wherewithal will be there."
Mr. Bruschi said the possible transfer is among the issues being debated in closed session. Another issue is when the developer should begin paying land lease payments on the property, he said. The borough contends the payments should have been triggered already, while the developer argues payments should not occur until it has access to the property.
Mr. Bruschi said part of the negotiations will ensure the developer posts a performance bond for Building C an insurance guarantee that was not in place during the first phase of the development, which was delayed by lawsuits from subcontractors who claimed they were not paid.
The project has been mired in debate, mainly because of the delay associated with the completion of its first phase which is still awaiting a pergola in the Albert E. Hinds Community Plaza and a solution to flooding problems in the lower floor of the Spring Street parking garage.
The pergola, Nassau HKT Principal Robert Powell said recently, should be erected sometime in early summer.
Mr. Powell was not available for comment on the possible transfer of ownership.
Last year, Borough Council narrowly approved a transfer of ownership for Witherspoon House from Nassau HKT to Witherspoon Urban Renewal Development Corp. a company that includes the same principles as the original downtown developer. The move was considered risky by some council members, including Councilman Roger Martindell.
This time around, Mr. Martindell said, he is less concerned with the entity that controls the building, than whether Nassau HKT’s outstanding obligation to the municipality is met.
"Last time around Nassau HKT retained the right to build Building C," Mr. Martindell said of the transfer of ownership last year. "This time around who knows what they will retain. … Will the new entity take over all the obligations of Nassau HKT? There is a reason why you create these new entities."
Mr. Martindell, who voted against the transfer of ownership for Witherspoon House, said he had opposed the previous transfer because it did not provide enough security for the borough, which might not be the case this time around.
"It’s OK as long as the borough is adequately secured in having the obligations it’s owed currently by Nassau HKT paid by somebody," Mr. Martindell said.
Those obligations, he added, include land lease payments, the pergola assembly, garage leaks, attorney fees and others.
Borough officials said it is not unusual for transfers to occur during multi-phased development projects.
In fact, according to Councilman David Goldfarb, the transfer of ownership for Building C was expected from the get-go, so Nassau HKT could muster up the appropriate financing to construct the building. Although the council is not obligated to approve the transfer, the original agreement anticipates it, he added.
Even so, several issues should be resolved before the council considers it, Mr. Goldfarb said.
"I would hope that it wouldn’t be brought before council until we have a tentative agreement with Nassau HKT on how we should proceed," Mr. Goldfarb said. "I would be reluctant to approve it without a full settlement of the outstanding issues."
The borough, Mr. Bruschi said, is also attempting to approach the completion of the redevelopment project more openly. Although a number of matters need to be brought to closure before the negotiations are complete, Mr. Bruschi said the deal is coming very close to a conclusion.