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* Personal Guarantees from Redevelopers


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Mayor Raymond McDonough and the Town Council moved one step forward towards modifying a financial agreement with the Harrison Commons, Pegasus Group, and the Canyon Johnson Urban Fund (Redevelopers). According to a Memorandum from Bond Counsel Tom Hastie, the necessity for the change was caused by an objection by Harrison Common's mortgage holder Citibank. Citibank objected to a special assessment concept because it diminished Citibank's security interest in the real property.

Mayor McDonough started the meeting off by stating that he appreciated everyone making an effort to attend the meeting on such short notice. The Meeting Notice was printed on Friday, July 17, 2009 and the actual Agenda was uploaded to the Town's website late last night or early this morning (Hey! I can't stay awake all night). There was no member of the press at the meeting and only a handful of residents. Mayor McDonough held the meeting on the Third Floor of the Town Hall even though the Second Floor Council chambers was open and available for use. The reason for the Special Meeting, the Redevelopers need to make an application to the New Jersey Environmental Infrastructure Trust Fund (NJEIT) by tomorrow, July 22, 2009.

There was some interesting discussion back and forth between Council members Steve McCormick and Maria McCormick with Councilman James Doran and Bond Counsel Tom Hastie. Ultimately, the Mayor and Council passed two resolutions, the first a Resolution Making Application to the Local Finance Board, and the second a Resolution Declaring the Town's Official intent to Reimburse Expenditures for Project Costs from the Proceeds of Debt Obligations. These two resolutions were necessary for the application to NJEIT for funding. Councilmembers Steve & Marie McCormick voted against the two resolutions. The Mayor and Council also introduced for first reading Bond Ordinance 1213 which proposed bonding of 4.5 million for the water, sanitary sewer and infrastructure.

After some questions from Councilmembers Steve and Marie McCormick, Bond Council Tom Hastic revealed that the Redeveloper "principles" would be personally guarantee the infrastructure bonds. At the end of the meeting, Town Clerk Paul Zarbetski distributed the Financial Agreement with the Redevelopers. Among the apparent principals are Richard Miller, Michael Richman, David Barry, Michael Barry, and Mark Villamar. There was however no personal guarantees contained in the package. Mayor McDonough promised me that he would provide the names of the principles that would be signing personal guarantees before the September 2009 Mayor and Council meeting.

If the Redevelopment principles sign personal guarantees, I will be a lot more comfortable with the town bonding for infrastructure which originally was suppose to be paid entirely by the Redevelopers. If there are no personal guarantees, I believe the Harrison taxpayer will ultimately be holding the bag.

Of interest is that the principals of Canyon Johnson Urban Fund will not be signing personal guarantees. One of the principles of Canyon Johnson is Magic Johnson. The Financial Agreement and proposed Bond Ordinance is available here

The partial Agenda provided to me is available here

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