Increased Funding For Post Office Plaza Addressed By Chatham Mayor

CHATHAM, NJ — Mayor Thaddeus Kobylarz spoke out in response to questions and concerns about the recent approval of a $6 million bond ordinance for the Post Office Plaza redevelopment project.

The bond ordinance was approved on Sept. 12 to authorize the appropriation of up to $6 million as a financial backstop for the Post Office Plaza affordable housing project.

"It is anticipated that the Borough and/or BCUW/Madeline Housing Partners, LLC, will receive funds from various funding sources for the provision of the aforesaid affordable housing units," according to the ordinance. The $6 million will be used only if "said funds to be received by the Borough and/or BCUW/Madeline Housing Partners, LLC, are insufficient to pay the costs associated with satisfying the Borough's affordable housing obligation."

At the Sept. 12 meeting, there was a public comment made by Bob Weber, a borough council candidate, who inquired about the project's increased cost, stating that it had originally been estimated to cost between $500,000 and $1.5 million.

According to Mayor Kobylarz, the borough fully expects to obtain funding from a number of sources to cover the cost of the project and should only anticipate a net cost of $1,319,074.

"While it is understood that this figure should be treated as an estimate, BCUW/Madeline Housing Partners, LLC, has indicated it will aggressively pursue all avenues of available funding, as it has done for its other 100% affordable housing projects, to produce a substantially lower net cost to the Borough than the $6 million (maximum) appropriation figure," Kobylarz said.

The need for this financial backstop is mandated by COAH rules for a municipally sponsored 100 percent affordable housing project, as well as by Fair Share Housing Center (FSHC), with whom the Borough has reached a Settlement Agreement, according to Kobylarz.

To obtain FSHC approval for the 15-unit affordable housing project as a replacement for a larger, inclusionary one, the Borough agreed to bond for the project's total cost as a guarantor in the unlikely event that all other funding sources failed.

"The attempt by certain parties to muddy the waters regarding this bond's function as a financial backstop is not only unfortunate but does damage to the Borough's credibility and standing," Kobylarz said.

The Mayor also addressed the second point of concern, the land that the new development will sit on.

"The first section of the ordinance talks about granting, what I assume is the land for the project, I'm not quite sure what that means. Does that mean it is a long-term lease, does that mean we are actually donating the land in perpetuity," Weber said.

According to Kobylarz, the Borough's land at the southeast corner of Post Office Plaza will be leased to BCUW/Madeline Housing Partners, LLC for a nominal rent for 45 years.

At the end of the lease, the project will become the property of Chatham Borough.