ATLANTIC CITY — The state Casino Reinvestment Development Authority decided Thursday to go ahead with helping pay for a
$142 million mixed-use project in Newark.
The project is one of the last approved for financial assistance before CRDA funds stopped flowing out of Atlantic City upon the launch of the Tourism District — and mirrors the type of development some planning experts want to see in the resort.
CRDA officials reconsidered the $10 million loan to Ron Beit, founding partner and CEO of New York City-based RBH Group and developer of the Newark Teachers Village, because some aspects of the project’s financing had changed since the CRDA issued final approval March 11, authority attorney Paul Weiss said.
The Teachers Village project will transform a blighted, eight-block section of Newark into a mixed-use development consisting of 205 residential units, 63,000 square feet of retail space, a day care center and three charter schools, Beit said.
Lenders — whom Beit declined to name — providing the majority of the money for multiple project components changed and the federal Department of Housing and Urban Development’s contribution will be less, delayed or both, Weiss said.
The changes increase the risk involved in investing in the project, but not enough to warrant pulling out of the endeavor, according to an analysis by CRDA’s financial rating agency Public Resources Advisory Group.
“Those are risks that we had to figure into our analysis to determine whether we still met our bond-rating criteria,” said Weiss, adding that CRDA only funds projects with bond ratings of A or B. “We were able to examine the project and make the determination, and not only did the project in its totality still qualify, but each part still qualified.”
CRDA funds for the Teachers Village will come from its North Jersey Project Fund, leaving $18.7 million for other initiatives. Another $6 million was committed March 16 to help build a hotel-anchored development in Newark, the largest in New Jersey with 27,000 units , CRDA CFO Val Berzins said.
Beit must finalize all financial commitments by Sept. 13, or risk losing $50 million in tax credits — and that could delay or jeopardize the project, CRDA project manager Jeremy Sunkett said.
Originally, the CRDA intended to finalize its commitment only after — or at the same time as — other financial backers had done so. If all other financing sources aren’t secured by March 11, 2012, Beit would lose the CRDA loan, too, CRDA documents show.
But so long as other financing sources are finalized by Sept. 13, construction will start within the next month, Beit said.
The city’s government and nonprofit economic incubator Brick City Development Corporation of Newark will kick in $1 million each, in addition for an undetermined sum from the federal HUD. The project also will receive proceeds from New Market and Urban Transit Hub tax-credit programs, in addition to redevelopment area bonds and Economic Redevelopment Grant rebates, CRDA documents show.
Beit declined Thursday to name private contributors.
Weiss and Sunkett said the CRDA money will go toward the construction of three buildings, each residential units above ground-floor retail space. The proximity of those structures — and the entire project — to rail lines and other public transportation points fits with CRDA policy objectives, as does its supply of work force housing.
The Teachers Village will provide housing for people who make no more than $64,454 — or 120 percent of the median income in Essex County, according to the U.S. Census Bureau — and want to live in an urban setting closer to their workplace.
Beit declined to name the restaurateur and other tenants — a medical facility and grocery store among them — expected to set up shop. The project also will create 416 construction jobs and employ an estimated 461 people once the schools and shops open for business, in addition to creating 713 jobs from an expected increase in activity at nearby existing businesses during construction and 629 such positions permanently.
The retail portion will meet demand that already exists given the Four Corners Historic District neighborhood’s proximity to the Prudential Center in downtown Newark and the city’s University Heights section, which attracts 40,000 students daily, project description documents show.
The Walk outlet shopping mall already serves a similar function for casino patrons and CRDA officials working how to expand similar benefits to Atlantic City.
Currently, an $80,000 feasibility study and $10 million land acquisition initiative in downtown Atlantic City is intended to increase artistic and cultural offerings — galleries, studio space, and low-cost housing for artists — in the area surrounding Dante Hall. The plan also would expand medical and educational facilities and housing for workers.
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