Image: Housing Authority of Plainfield
Rents in a 96-unit subsidized housing complex could go market rate if the City Council does not grant approvals a new owner needs in order to take charge of it.
A request to change a "payment in lieu of taxes" or PILOT agreement for Liberty Village sparked controversy Monday when the council failed to move it to the April 15 agenda for approval.
Unless Liberty Village Estates Urban Renewal LLC can get approvals needed for a HUD contract by May 1, the subsidized housing complex could move to market rate rents, an attorney for the company said.
Carlos Sanchez, the city's deputy city administrator for economic development, said the prospective new owner intends to increase the PILOT payment from 6.28 percent to 10 percent.. The new owner also would provide a new community room, a camera monitoring system, upgraded electrical and plumbing systems, a new laundry facility and sidewalk improvements.
The PILOT agreement dates back to 1982, with a 50-year term. The action requested from the council was simply to amend the agreement. Council President Bridget Rivers, who opposed the deal Monday, asked Sanchez whether it was for a tax credit, but Sanchez again explained it was a PILOT.
The contract of the current owner, Liberty Community Associates, expires on May 6. Sanchez said the owner failed a HUD inspection, attaining a score of about 50 when it should have been closer to 90. The prospective owner, which he called "a new entity with a lot of experience," expects to bring the score up to 85.
When an attorney for the new company stressed the need for resolution by May 1, Rivers said, "I'm so tired of 'time constraints, time constraints, time constraints'," and insisted on hearing from Housing Authority of Plainfield Director Randall Wood. Although Sanchez had said HAP had the right of first refusal for the sale but did not exercise it, Rivers said she was told something different.
"We never bowed out,"" Wood said. "I don't know who these gentlemen are at all."
Wood acknowledged that the complex had problems, saying the owners had an intermediary who passed away.
"It was null and void for a whole year," he said.
He also said HAP was interested in acquiring the complex, but most likely could not match the $9.2 million sales price that the new owner offered.
After saying for the last time she would not support the resolution, she said it could be added to the agenda as a new item on April 15 if five council members agreed then. On Monday, the consensus fell short of four in favor of moving it to the agenda, with Rivers and William Reid saying "no" and Cory Storch, Rebecca Williams and Tracey Brown saying "yes." Vera Greaves was absent and Gloria Taylor did not arrive until the meeting was almost over.
The regular meeting is 8 p.m. Tuesday, April 15 in Municipal Court, 325 Watchung Ave.