Articles
current | archive
Prism pays taxes — with 18-percent interest in late fees
essexnewsdaily.com
December 6, 2015
Original Article

Eugene Diaz, founder and principal of Prism Capital Partners, LLC in Bloomfield, has been named among the NJBIZ 2015 Real Estate Power 50. The WEST ORANGE, NJ — Township Business Administrator Jack Sayers informed the West Orange Township Council during its Nov. 24 meeting that Edison Village redeveloper Prism Capital Partners has paid everything it owed in fourth-quarter taxes on its redevelopment properties following the township's issuance of a Nov. 11 default letter — the third in two tax periods.

Responding to an inquiry from Councilman Joe Krakoviak, Sayers said Prism paid what was due plus 18-percent interest on Nov. 20, well within the 30-day time period it had to meet before it would have been faced with the possibility of having its 2006 redevelopment agreement terminated. At the time the default letter was sent, it owed more than $245,000 in delinquent taxes for five properties.

Although Prism made good on what it owed, Krakoviak still expressed frustration at the real estate operator's continued tardiness in paying its taxes. Pointing out that this most recent instance marked the 18th straight quarter in which the redeveloper was delinquent, the councilman stressed that paying taxes on time is required by the redevelopment agreement to which Prism is held. The fact that it routinely does not meet that obligation does not bode well for the future of Edison Village, he said.

"I think we all know why anybody would go 18 straight quarters of not paying the property taxes on time and paying 18-percent interest — it's because they can't do anything else," Krakoviak said. "I've always taken that to be a suggestion that the redeveloper may not have the financial capabilities to complete this project. And the fact that we're coming up on the ninth year anniversary since they were given the approval to move forward with the project and we're still stuck here is perhaps another indication."

Krakoviak asked if any additional construction had taken place since the last council meeting, to which Sayers answered that he has seen some surveying work the last time he checked out the property. But Sayers said he did not see any construction work, though he had not been by the site in a while.

The councilman also questioned whether the redeveloper had been able to obtain the $70 million construction loan it was seeking as well as whether the Aug. 11 redevelopment agreement had yet been executed. This agreement transfers the right, title and interest in the Edison Village project's construction phase and financial agreement from Prism entity GP 177 Main Urban Renewal LLC to Dune Real Estate Partners entity DGP Urban Renewal LLC. Sayers said he had not heard anything on either front.

Resident Mark Meyerowitz raised another issue regarding Edison Village during the public comment period of the meeting: the safety of the Edison Battery building itself. Meyerowitz inquired whether any tests will be done to make sure the building is physically secure, warning that concrete and rebar can become very weak if they begin to deteriorate. And considering that the structure had been left empty for approximately 10 years, he said West Orange should be especially concerned.

"The last thing we need is for residences to be built in a building that is not structurally sound," Meyerowitz said. "What you don't want is for people to start living in this place and then all of a sudden have things falling apart, or worse, collapsing."

Meyerowitz is one of five township residents who filed a lawsuit against the township with regard to the Edison Village redevelopment, asserting that the township did not legally issue its bonds for the project. The New Jersey Supreme Court heard oral arguments in the case Oct. 7, but has yet to issue a decision. Township officials have previously cited this lawsuit as the reason construction has not started sooner at the site.

In response to Meyerowitz, Councilwoman Susan McCartney said that, while the township does not own the property, she is sure that the structural integrity of the building will be checked once construction begins.