Tax payers get squeezed while township attorneys and engineers get rich!
MOUNT HOLLY – The lack of progress on the Mount Holly Gardens redevelopment has put the township in a financial bind.
Officials are acknowledging just how much of a strain is being caused by the decade-long effort to redevelop the 25-acre neighborhood at Levis Drive and the Route 541 Bypass.
On April 12, James Maley, the township’s special redevelopment counsel, filed an affidavit with the 3rd U.S. Circuit Court of Appeals related to a March 16 decision that prohibits the municipality from moving forward with eminent domain to take ownership of some homes that remain at the Gardens until an appeal of a lower-court ruling is decided.
Some residents have filed a fair-share housing and discrimination suit against the township. Maley is asking the court for more clarification if the township is barred from proceeding with eminent domain.
“The injunction will delay closing for the second and third phase of this project. In addition, the injunction could impact the township’s ability to sell the units which will be constructed under the first phase,” Maley wrote. “Without these revenues, the township will be unable to pay its debt service payment of $1.2 million annually, which will mean the township must again raise taxes, cut services and/or lay off employees.”
When reached for comment Friday, Township Manager Kathy Hoffman said the municipality is “struggling” to keep up with debt costs related to the project.
“We’re able to pay it, but at what expense?” Hoffman said.
In the affidavit, Maley said the township is holding a public referendum April 27 to exceed the state’s 2 percent cap, by $750,000, on tax levy increases. That revenue would be used to pay debt costs and avoid layoffs.
Whether all layoffs will be avoided remains to be seen; the township still has a $750,000 budget gap to close even if the referendum passes. Officials hope to use $500,000 in Urban Enterprise Zone funds but have yet to get state approval, Mayor Tom Gibson said Friday.
The township has submitted a plan to the state to lay off as many as eight police officers from its 22-member force, two public works employees, a housing and zoning officer, two clerks, and an administrator, Hoffman said. It has yet to be approved.
Maley told the court that the municipality has incurred $17 million in debt to “designate the property as an area in need of redevelopment,” pay legal costs, acquire properties and relocate residents.
The township began purchasing the 1950s-era rowhomes in the Gardens in 2003 so they could be demolished to make way for a development that will include 292 townhouses, 228 apartments, and 54,000 square feet of commercial space.
In 2008, Mount Holly reached an agreement of sale with Keating Urban Partners of Philadelphia and set phasing for the project. Under the agreement, Keating will pay $9 million for the land: $2.6 million for the first phase, and $1.5 million, $1.6 million, and $3.3 million for subsequent phases.
But closing has yet to occur on any of the phases, and the schedule to receive deposits on all but one has come and gone. To date, the township has received only $166,490 for the project, Hoffman has said.
“All the litigation has probably slowed this project by several years, which is impacting finances,” Gibson said. “(The situation) has snowballed because of the litigation and what the economy is now. Hopefully by summertime, we’ll have this closing.”
In the affidavit, Maley said the township and developer are working to close on the first phase within 45 days and the second within 60 days thereafter.
Taxpayers already have paid $8.1 million in debt service and will continue to pay more.
“It’s imperative that we get this closing (on the first phase),” Gibson said, adding that he hopes the township can get that revenue before the budget is finalized. If it does, he said “it is his understanding” that it could be used to pay down debt costs in the budget.
Mike Sencindiver, a vice president for Keating, told the council Monday night that few issues are left to be resolved before closing on the first phase of construction, which would include the 228 apartments and 60 townhouses.
Sencindiver said he hopes construction can begin this summer. A builder for the apartments is in place, but a deal for the townhouses is still being negotiated, he said.
Rose Krebs can be reached at 609-871-8064 or rkrebs@phillyBurbs.com