Jennifer Credidio, the township’s legal counsel for redevelopment, speaks about Phase II of the Edison redevelopment project at the June 26 council meeting.
WEST ORANGE, NJ — At its June 26 meeting, the West Orange Township Council approved a resolution allowing the transfer of Greenfield’s ownership interests in DGP Urban Renewal and Prism Green Associates IV, the redevelopers for Edison Village on Main Street.
DGP was responsible for the recently completed Phase I of the project and Prism is responsible for Phase II, beginning now; Greenfield, or GF Edison LLC, is an investor in the project. The resolution passed 4-1, with Councilman Joe Krakoviak casting the only vote against it.
“There is an organization called Origami who has bought out some of Greenfield’s investments,” business administrator Jack Sayers said at the meeting. “One of the investments that they bought out was our redevelopment project. We have to agree to that, and we feel it’s not a big deal.”
Origami Opportunities Fund III is an investor in Terra Viridi IV LLC, the investment group to which the Greenfield shares will be transferred. According to Jennifer Credidio, legal counsel to West Orange for redevelopment, nothing in the redevelopment contract between West Orange and Prism will change except for the ownership shares.
“The only change would be the disposal of the Greenfield interests to an entity called Terra Veridi,” Credidio said at the meeting.
The ownership transfer, as Credidio said, will be for 32.5-percent ownership of the redevelopment project. Michael Hanley, a financial adviser for NW Financial Group, which negotiated Prism’s deal, said at the meeting that Origami had raised approximately $370 million in 2016.
“They invest in a variety of assets and focus on things that have existing ownership challenges,” Hanley said. “They are not only a real estate investor; they invest in all types of assets in different places.”
Hanley said two of Origami’s investors, a public employee pension fund from Alberta, Canada, and a pension endowment from the University of Toronto, would be 10-percent owners in the project. He also said Origami is a typical hedge fund investor.
Councilman Victor Cirilo asked Credidio about a conditional approval of the resolution, pointing out that Prism has been delinquent in paying property taxes in the past.
“Do we have any type of leverage with respect to this approval? Can it be conditional?” Cirilo asked at the meeting. “We have to make sure the property taxes are paid; I know they have a track record.”
Credidio said that she would recommend staying away from a conditional approval, because it could create confusion and complications in the future.
“As a general rule I try to stay away from conditional approvals because it becomes difficult later to determine whether conditions are met, and sometimes it can become an issue,” she said. “It requires an extra step of them ensuring, in a future event years down the road, that that condition has been met.”
Chief Financial Officer John Gross said that the administration is confident that the property taxes will be paid. Prism has been sent notices that they are overdue on their tax payment, and the town receives an additional 18 percent when the taxes are paid late.
“We always get our tax money,” Gross said at the meeting. “There’s no doubt about that. It’s not like a revolving credit account — we will receive our funds. It’s something we feel isn’t a risk at this point.”
Councilman Joe Krakoviak did not support the ownership transfer because he does not want to continue working with Prism based on the fact that they are consistently tardy in paying property taxes.
“I don’t think saying ‘we will get the taxes’ fully addresses what is in the contract,” Krakoviak said at the meeting. “I’m not arguing with anyone that we get the taxes and 18 percent. I’m arguing that we have what appears to me to be a bad faith partner here. Prism has been delinquent on their taxes virtually every quarter for five years. So the point is not that we’re going to get the taxes, but that they are not complying with the contracts they’ve already signed.”
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