3 Takeaways From The One Westfield Place Finance Discussion

WESTFIELD, NJ — During a Facebook Live presentation on the financials of the proposed One Westfield Place redevelopment project, finance experts and town officials argued that the project would generate a significant amount of money for the town over the next several years.

Mayor Shelley Brindle held a presentation on the traffic impact of the redevelopment earlier this month, and on Monday held a presentation on the financials of the project.

She was accompanied by Councilwoman Linda Habgood, real estate financial adviser Robert Powell, the town’s legal counsel Steve Mlenak and bond counsel Matt Jessup.

Here Are 3 Key Takeaways From The Financial Presentation

1. Revenue from the project is expected to increase over time.

In the first year of anticipated PILOT revenue, which would be 2027, town professionals project that the town would receive a total revenue of $494,654.

Over 30 years, town professionals predict that the town will receive a total revenue of $213 million of which $140 million would be available for municipal use due to debt service.

One Westfield Place also includes a number of extra cost-generating elements, which will serve a public purpose.

For instance, the project will include 36 affordable housing units that will be subsidized by the developer. This entails 12 family units and 24 age-restricted units. The total number of residentialunits across the project is proposed to be 223.

HBC Streetworks will also contribute $8 million toward a list of public "off-site" improvements, in addition to public streetscape improvements and other public spaces being planned on their property with an incremental value of $3 million.

2. Streetworks proposes $54.2 million of planned public improvements.

Here are the public improvements that Streetworks has proposed as part of the project:

• North Avenue town square
• South Avenue town square
• South Avenue public parking garage
• New smart technology town parking system
• Traffic/congestion mitigation upgrades at 11 intersections
• Quimby Street enhancements
• Roadway improvements
• Streetscape improvements
• Mobility hub enhancements

Mayor Shelley Brindle said having both a North and South Avenue parking garage will help "mitigate traffic for people having to travel from the north side of town to the south side of town." As it functions now, all commuters must park in the South Avenue lot.

Brindle added that the use of smart technology will help mitigate traffic by showing drivers how many parking spots are available in the garage via an app on their phone.

"It can operate from an app on your phone, so before you leave your house, you can go directly to where a spot is available and not only is that convenient to you, it is another opportunity to mitigate some of that unnecessary circulation in town looking for parking," Brindle said.

According to the presentation, the project itself will pay for these public improvements.

The $16.5 million North Ave. Parking Garage and the $13 million South Ave. Parking Garage will be funded by two Redevelopment Area Bonds (RABs).

Of the remaining $24.5 million needed, $8 million will come from a cash contribution from Streetworks, and another $16.5 million will come from a mix of RABs and town re-investment of land sale proceeds.

3. Town professionals argue that a PILOT program is necessary.

PILOTS are a "powerful tool used as a financial incentive to attract private investment in areas in need of redevelopment in a manner established by the municipality in a redevelopment plan that would otherwise not be financially viable," according to the professionals.

With a PILOT agreement, the project would see a return on investment of just above 10 percent, according to financial advisor Powell, which he said is sufficient to justify this equity investment.

At full taxes, Powell said the entire project would require an equity investment in addition to the debt of approximately $150 million.

"That kind of investment is not feasible or practical in the context of a return that’s as low as we found it to be if the project is subject to full real estate taxes," Powell said.

The projected PILOT payments represent 70 percent of what would be full taxes in the first five years of the agreement. In years six through 15, because rates will go up, the PILOT would represent about 75 percent of full taxes, according to Powell.

At the end of the 30-year term financial agreement, Powell said the project reverts to full taxes.

You can view the full presentation on the town's Facebook page.

An additional Facebook Live financial discussion is scheduled for Jan. 11 at 6:30 p.m. Questions can be submitted in advance at westfieldnj.gov/FBLive.