Concerned that the NextGen park has been stalled for too long, Atlantic County is considering paying off as much as $595,000 in debt on the project, hoping that the investment will spawn progress.
The South Jersey Economic Development District, which was spearheading the project, has been unable to pay the contractors for nearly a year and was recently considering taking out a loan to cover its debts. But as that process has proved lengthy and complicated, Atlantic County has proposed another option: paying off the debt with county money under an existing bond ordinance.
On Tuesday, the county Board of Chosen Freeholders took steps toward amending a bond ordinance that would allow existing bond money to be used to pay the contractors. The county would then receive a $250,000 reimbursement from the U.S. Economic Development Administration but would shoulder the remaining amount — as much as $345,000.
The county's offer is contingent upon the district's other three member counties — Cape May, Cumberland, and Salem — agreeing to back a loan for the district's remaining debt totaling $750,000. The district expects to be able to repay that money over time with its own revenues, but the three counties would then be responsible for the debt, resulting from mismanaged revolving loan funds among other things, should the district be unable to pay.
Atlantic County Freeholder Chairman Frank Formica said there is a small window to move forward with the NextGen Aviation Research and Technology Park, and the county is not willing to risk losing that opportunity.
“The reason we took the next step forward ... is that (the project is) in peril. The developer we now have in place ... has tenants ready like Boeing, like Lockheed (Martin), other aeronautic research companies. They cannot wait for the four counties to get together in resolution, so we took the lead," Formica said referring to the park’s conditional developer, New Vistas Corp. "It's a spotless cause as far as economic development in this county. It's a spotless cause."
Local leaders have focused on the project’s potential to diversify the region’s economy, which is primariliy focused on Atlantic City’s gambling industry. The park is expected to bring 2,000 high-paying engineering jobs to the region, playing on a synergy with the Federal Aviation Administration’s William J. Hughes Technical Center where the park would be located.
Fixing the financial problems associated with the project has proved frustrating for officials involved in recent months as several steps need to be taken simultaneously. The district has informally agreed to relinquish control of the project to the park’s board. That requires that a lease agreement for the park’s land owned by the FAA be transferred — a process that requires several debts and legal transactions be settled.
Until recently, the district had only discussed a loan to the pay contractors, ultimately leaving the district still responsible for the financing. The county’s offer is the first that would relieve the district of a portion of the debt entirely. The amount owed to contractors is estimated at between $495,000 and $595,000; the discrepancy reflects the fact that one contractor is still disputing how much is owed.
“Atlantic County really is concerned about how the resolution on this issue is taking so long,” said Steve O’Connor, the district’s interim executive director. “They’re concerned that any future delays could undermine all the efforts of the NextGen park, and the developer is really unable to pursue his tenants while we’re in limbo.”
Northfield-based New Vistas was selected by the park’s board as conditional developer earlier this year following an intensive application process. To date, however, the parties have been unable to settle on terms of a finalized contract, foregoing two of their own deadlines. The parties recently agreed to execute a contract by the “earliest feasible date” for the project that could take between eight and 10 years to complete.
Staff Writer David Simpson contributed to this report.
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