Orange City Council clears way to redevelop Rec Center site

Photo by Chris Sykes
Orange City Council President Kerry Coley discusses the governing body’s passage of three new resolutions related to the redevelopment of the old YWCA site on Main Street that is being demolished to make way for a new mixed-use residential and commercial project that will also include a health and wellness facility for children, adults and senior citizens at the regular meeting on Wednesday, Nov. 7.

ORANGE, NJ — Orange City Council unanimously passed three new ordinances on second reading related to the redevelopment of the old YWCA site on Main Street at its regular meeting on Wednesday, Nov. 7.

The first ordinance authorizes an agreement between Orange and the J. Rossi Paint and Wallpaper store to relocate from its current building, on the same side of the street as the YWCA, which is needed to facilitate the mixed-use redevelopment project that business administrator Chris Hartwyk brokered with developers, to the building at 425 Main St., currently owned by former Orange chief financial officer Jack Kelly and former fire Chief John Gamba. The ordinance also provides for the city to make improvements to 425 Main St. necessary for business operations and to accept the transfer of real property from J. Rossi and Wallpaper, Joseph Rossi and Annemarie P. Rossi to Orange.

The second ordinance authorizes the acquisition of 425 Main St. for the purchase price of $1,990,000.

The third ordinance is a bond ordinance providing for the acquisition and renovation of 425 Main St., appropriating $3 million and authorizing the issuance of $2,857,000 bonds or notes of the city to finance part of the costs.

Orange is buying the building at 403 Main St. that Rossi Paint currently occupies, in order to make the YWCA redevelopment project happen, and paying the Rossis to move across the street into 425 Main St., which the city is buying from Kelly and Gamba.

“These three ordinances are related to the revised project plan for the Health and Wellness Center, formerly referred to as the Rec Center, and they authorize the acquisition of certain properties, so that we can square the corner of Main and High Street and have a larger footprint, where we intend to do a mixed-use development project, which will include a new health and wellness center, for approximately 45,000 to 60,000 square feet and a residential component above it and a parking component below it,” said Hartwyk on Wednesday, Nov. 7.

Hartwyk said the YWCA redevelopment project, including the new health and wellness center, provides for the demolition of the old YWCA building on Main Street and the building at 403 Main St. to make way for the new mixed-use facility. He added that the new building is mixed-use, meaning that it will generate revenue that can eventually be used to offset the overall cost of the redevelopment project.

“The Y property has been tax exempt for all these years and, at the conclusion of this project, it will be subject to taxation” or payment in lieu of taxes payment, said Hartwyk. “The acquisition of the property that we have now has been accomplished through a $2.5 million state legislative grant and there is approximately $1 million of that grant left. It’s a little under $1 million, but that is still available to us.”

Hartwyk said Ordinance 51-2018 is a stop-gap measure needed to facilitate the YWCA redevelopment deal.

“We have to acquire some additional properties, because we’ve changed the project and we have qualified several developers who have shown proof of funds and signed term sheets stating that they will reimburse us, if they are the selected developer, for the cost and the money that we lay out for the acquisition of those properties,” said Hartwyk. “So this $3 million that we have in Ordinance 51, at most, we will be going to notes for a short period of time and then that will be paid off and retired by the selected developer. The actual cost of construction of the new facility will be somewhere in the neighborhood of $8-and-a-half to $10 million and we’re pursuing what we call a ‘capital stack of grants.’ If, at some point in time, it becomes clear that we’re not going to be able to raise all of the $8½ to $10 million, we will have to come back to the council and the public and explain why, before we can go forward.”

Hartwyk admitted there is the potential that it could cost the city money, but said that is not currently the plan.

“I have identified a number of grants that we can pursue for the construction component of this project that would be the city’s, but there is a possibility that it would cost us some money. I’m trying to avoid that,” said Hartwyk. “We always try to do things without costing taxpayer money. This is a creative project, just like the Crane Street project that we discussed tonight is a creative project, where the private developer is putting up $3½   million to build a deck or an additional level to the deck, which provides 160 parking spaces for the city, and we get the revenue from it. That’s never been done before in this city.”

City Council President Kerry Coley said the new YWCA site redevelopment deal replaces and improves upon the old recreation center deal that Mayor Dwayne Warren and former deputy business administrator Willis Edwards proposed in 2015, on the eve of the 2016 mayoral election. At the time, Warren and Edwards promised that the $2.5 million grant from the state Department of Community Affairs would cover the entire cost of buying and renovating the old YWCA building and converting it into a new recreation center.

But the Warren and Edwards deal fell through and the recreation center closed its doors to the public shortly after it opened on Saturday, May 7, 2016, for unspecified reasons. Now, thanks to Hartwyk and council passing these three new ordinances, Coley said the city is getting the chance to take a lemon and make lemonade.

“All I can say is what happened in 2015-2016, when I was running for mayor against the incumbent, current mayor. A deal came, we got a grant to purchase the building, it didn’t unfold the way that we anticipated it to unfold, because I supported that,” said Coley on Wednesday, Nov. 7. “However, here it is, what, two, three years later, and we are getting something that will benefit the people of Orange for years to come. Will it cost us maybe a little extra money than what was previously spoke about? I don’t know. But all I do know is we are getting a brand new state-of-the-art facility and it’s going to be something for all to see and it’s going to be around, servicing the people of Orange and surrounding communities, for years to come.”