by Jim Cann, Bordentown Deputy Mayor
After nearly five years of research, planning and careful consideration, the Bordentown Township Committee has entered into an agreement to purchase the National Fence property to expand our Public Works Department. What follows is a comprehensive look at this project and its impact on our taxpayers.
Why should we expand our Public Works facility?
Our Public Works department is located on a half-acre site on Crosswicks Street in a building that was built in the ‘30s when our population was about 1,000 people. Today, we number close to 11,500.
This building has not been updated in years and is not large enough to accommodate all of our equipment, and as a result most of our vehicles and materials are stored outdoors. We have already seen this brutal winter take its toll on our machinery, wasting time and money.
We do not have enough space to increase services to our residents such as recycling and disposal of electronics, branches, white goods, paint, oil, batteries, etc. Expanding the Public Works facility will allow us to provide this service.
Can we expect revenue from this project?
Many of our neighboring communities have found these services provide substantial savings in landfill and recycling fees. In addition, this site will permit us to have an area for vehicles impounded by the police department instead of paying for private storage.
An extremely conservative estimate of the cost savings and added revenue we can anticipate is $30,000 per year. Our research into other communities that have added these services found that their savings are considerably higher.
Why purchase the National Fence property?
This property lies directly adjacent to our Public Works Facility, on 3.6 acres of land. The existing buildings on the site will allow us to shelter our vehicles and equipment, which will greatly extend their useful life and cut maintenance costs. The size of the lot will allow us to put in all the recycling facilities we need, and as a bonus we can build an impound area, which will result in additional savings for our township.
Isn’t the National Fence site contaminated?
Most older light-industrial sites like this property have some level of contamination. Our environmental consultant found PCB contamination in one small area situated under a concrete slab. Since the DEP recommended method of remediation is capping of the contaminated area, no further remediation should be necessary.
There are also some metal contaminates, but unless they are migratory, highly unlikely in our clay soil, they do not present a significant problem. As our environmental consultant and our engineer have both stated, “for a light industrial site it is clean and the level of contamination was less than anticipated.”
A summary of the environmental report is available on the township’s website.
Why is the sales price higher than our appraisal?
We cannot force the owner to sell his property to us for the price we want to pay. The owner’s original listing price for the property was $750,000. Prior to our negotiations, he removed the property from the market, deciding instead to wait until property values improved and he could get his asking price. He offered the property for rent and had immediate interest in the property from multiple sources, so he was not motivated to sell.
The owner’s appraisal of the property came in at $500,000 and our appraisal came in at $425,000. After months of negotiations in 2012, both parties settled on a sales price of $550,000 when the seller refused to lower his price any further. Because this property is one-of-a-kind, in the exact location we need, with buildings that meet our specific requirements, it is worth more than market value to us.
When some contamination was discovered the owner was notified by New Jersey Department of Environmental Protection that he was required to do further testing and remediate the property. We reopened negotiations and he lowered his price to $500,000 to compensate for the cost of any cleanup that must be performed.
He will be relieved of liability from the known contamination on the site that is specified in the agreement, but will be responsible if any other contamination is found.
Why didn’t we acquire the property through eminent domain?
Our attorney advised us that an eminent domain lawsuit could cost up to $125,000. Even if a judge accepted our appraiser’s value, which is in no way guaranteed, the cost of the property would likely meet or exceed the amount we agreed to pay.
Why didn’t we just let the owner clean up the property and then purchase it?
There was no assurance that once the seller remediated the property that he would not return to his original asking price of $750,000. Nobody can look into the future and guarantee that we would have been able to purchase this property for a lower price, or even the same price had we waited, especially since property values are starting to rise. There is no doubt that we would have been looking at an expensive eminent domain lawsuit if we followed this route.
How much will this expansion cost?
To meet state requirements for a recycling facility there are improvements that must be made to our existing facility and the National Fence site. The estimate of the cost of these renovations and improvements is $1.6 million plus the cost of the land.
Why not build on the Green Acres land that we own on the other side of the public works facility?
This would have been the next best alternative. Unfortunately, the two-acre site is not directly adjacent to Public Works, as there is 20-foot water pipeline easement between Public Works and this property. The smaller size of the property would preclude us from realizing savings from an impound center and in addition the bike path would have to be moved.
Our engineer’s estimate of the cost to make the improvements we require on the Green Acres site, including constructing buildings, paving, utilities hookups, fencing, landscaping, etc., is nearly $3.4 million. That is over a million dollars more than developing National Fence site will cost.
Isn’t there any other property in the township that would be suitable?
There are several problems with this option. First of all, if we abandon our current Public Works site for a new piece of property, we must pay for the cost of the land plus all of the improvements, which would be prohibitively expensive, and our present facility would become useless real estate.
If we retain our current site and buy land for a recycling center, then we must, staff, maintain and make improvements to two separate sites, which would cost taxpayers more. There is no property currently for sale that meets our needs so we would have the possible expense of an eminent domain lawsuit. Of all options, this would cost taxpayers the most money and make the least sense.
How will this expansion affect my property taxes?
The National Fence property will come off the tax rolls and become public property and we will also have to pay the debt service for the renovations and expansion. Because this facility will be generating revenue and cost savings, taxpayers should see no increase in their tax bills due to the expansion.
In the unlikely event that the facility produced no income or savings, homeowners with an average assessment would see an increase of approximately $17 per year for the expanded services.
What if we had done nothing?
If we did not act on this Public Works expansion our vehicles would continue to be exposed to the elements, which would cost taxpayers more in repairs and depreciation, and shorten the life span of our expensive equipment. We would have no viable alternative to provide residents with a facility where they can bring materials for recycling, and we would not be able to realize the savings that an impound center will generate. However, we would have had to invest in improvements and repairs to our aging Public Works, site which would still have remained an inadequate facility.
Ironically, paying more than our appraiser’s valuation of the National Fence property, as bitter a pill as that it is, will still save our taxpayers a million dollars in overall costs when you compare it to our next best option. When you look at the big picture it is obvious that in terms of cost, income generation and ability to meet the future needs of our residents, the township was fiscally prudent to purchase this property for our Public Works expansion.
As always, we will continue to work in the best interest of our residents to move Bordentown forward.