West Orange, Prism Reach Deal To End Real Estate Standoff

WEST ORANGE, NJ — There’s an end in sight to a legal standoff between West Orange and a North Jersey real estate development firm.

Mayor Robert Parisi announced Sunday that the town has reached a settlement with Prism Capital Partners (Prism Green) over a massive redevelopment plan dubbed Edison Village, which was named after inventor Thomas Edison, who ran a factory in the area.

The $12.5 million deal will result in several properties swapping hands, and will lay the foundation for a new future at the 21-acre site on Main Street, which was previously billed as the “largest non-waterfront adaptive-reuse project in New Jersey.” It will also end Prism’s redevelopment rights aside from Edison Lofts, an existing apartment building that was part of the original development plan.

The West Orange Town Council first approved a redevelopment plan for the area in 2003, which encompasses 21 acres on Main Street. Prism Capital Partners eventually secured the role as developer in 2006, planning to revamp the historic Thomas Edison Battery Building and surrounding grounds with thousands of square feet of retail space and hundreds of units of housing.

Since then, Prism has completed some key work, such as the award-winning Edison Lofts residential complex. But after years of allegedly "stagnant" development, West Orange officials are now seeking another company to complete what Prism began.

Declaring Prism to be "in default" of the redevelopment agreement, the township terminated the deal in June. In August, the town council introduced an ordinance that would create a new plan for the area.

• The ordinance can be seen here
• The current draft plan can be seen here
• The original plan and previous three amendments can be seen here

Prism later launched a lawsuit to stop the process and restore its rights as exclusive developer for the project, naming town officials and other developers, including Whoopi Inc., a production company owned by actor Whoopi Goldberg that reportedly wants to bring a movie studio to the area.

Principal partner Eugene Diaz blasted town officials, calling their actions "unconscionable and totally unorthodox." Read More: Battle Erupts Over Edison Village Redevelopment In West Orange

On Monday, Diaz gave Patch the following statement after being asked to comment on Mayor Parisi's announcement, adopting a much different tone:

"The parties worked out an amicable settlement that will allow the township to take the Downtown Redevelopment Area in a different direction, one that will complement and add to the success of the Edison Lofts and Edison Mews project. Prism is happy to have played an instrumental role as the catalyst to bring new life and opportunities to this area of the township, and we wish all of West Orange good luck with the future plans."

HERE’S THE DEAL

On Sunday, Parisi released a statement about the settlement. He wrote:

“As preparations continue to close on this acquisition, the township will pursue a new plan for the roughly 20 acres of the Phase II portion of the redevelopment zone as well as the Phase III section, encompassing the CVS complex and surrounding properties. The first step of this process has already begun, as the planning board recently approved an amended redevelopment plan for the zone which creates the parameters for a new vision. These approved amendments will be presented to the township council for final review and approval.”

The West Orange Township Council will also be asked to approve a second reading of a bond ordinance to fund the acquisition at its meeting on Sept. 14. There will be a discussion at the meeting, and additional talks in the months ahead as plans are finalized, Parisi said.

“But this is an important step in re-imaging the current plan and determining what are the best uses to compliment the Edison Lofts and the Main Street corridor,” the mayor added.

Parisi also extended an olive branch to Prism in his statement:

“The township is proud of the relationship with Prism Partners and the success of the Edison Lofts and Edison Mews, transforming the old Battery Factory, as part of the original Thomas Edison Manufacturing Complex, into beautiful luxury apartments. The apartments are 95 percent occupied, demanding high rents, with two retail uses preparing to move into the retail space in the coming months, and in the full 12-months of 2022, the complex will produce more than $1,200,000 in revenue for the municipality.”

Here are some key details of the deal, Parisi said:

• The township or its designee will obtain all right, title and interest in the property owned by Prism Green in the Township of West Orange, including Barton Press, various Ashland Avenue properties and a single-family lot on Babcock. The settlement does not include the already developed Phase I apartment building.
• The purchase price shall be $12.5 million
• The properties will be sold “𝐀𝐒 𝐈𝐒”
• The township shall have the right to obtain an environmental analysis of the properties within 30 days
• At the closing, full mutual releases shall be provided “between and among all parties and persons including defendants Whoopi, Inc., MBS, Mr. Henry and all other parties.” The releases will acknowledge that all of Prism Green’s redevelopment or other rights are extinguished.
• The township will be assigned an environmental escrow in the amount of approximately $316,000 held by the DEP. The township will assume all remaining environmental liabilities.
• The current deed restriction shall be extinguished at the closing and a new deed restriction which only applies to approximately six lots on Ashland (approximately two acres) shall apply which will prohibit the following uses: outdoor storage, auto repair and/or body shop usage; junkyard and/or other waste or refuse facilities (e.g., public works facility); other industrial usages including but not limited to bus parking; truck depots (cross dock facility); gasoline station; manufacturing facility; commercial warehousing; logistics facility; and lumber yards
• At the closing, the township will receive the infrastructure escrow currently held by the township (for the benefit of the project) in the amount of $766,000
• At the closing, the township shall pay seller $383,000 to release the existing deed restriction. (current deed restriction requires that construction on Phase II be limited to condominium residential development)
• Closing will occur no later than December 31, 2021
• At the closing, certain property maintenance and other issues shall be resolved; in the meantime, the properties shall be maintained by Prism in a safe manner.
• A formal purchase and sale agreement shall be drafted and finalized in “the coming weeks”

QUESTIONS REMAIN: HERE ARE A FEW

Several people offered comments after Parisi announced settlement details on social media. They included former West Orange councilman Joe Krakoviak, who said there are still several questions remaining about the new plan, including affordable housing numbers.

Krakoviak wrote:

“Didn't the township incur an affordable housing obligation in the building of Phase I? Didn't Prism and the township agree to fulfill this obligation in Phase II? What happens to the township's and Prism's obligation to build affordable housing in Phase II? The draft Fourth Amended Redevelopment Plan contemplates 44 units of affordable housing in Phase II. What's your estimate of the value/cost of fulfilling that obligation? How much is Prism paying of that obligation, which it had agreed to fulfill? Now that Prism is defaulted out as redeveloper, who do you expect is going to fulfill this obligation?”

Other questions seen online included:

• “Has there been an estimate prepared of the value of the property and rights the town will be acquiring for all this money? Who will be taking over the development and what will they pay for these rights?”
• “How much real estate tax revenue do the parcels to be acquired generate for the township?”
• “Can you explain whether there will be an increase or decrease in taxes for the average homeowner as a result of this action when all is said and done with the properties? It would give perspective as to whether to support this agreement and project.”

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