The slate has been wiped clean at the Rivercove apartment complex.
After close to a year of wrangling between Grove Street Urban Renewal, the now-former owners of the complex, and the township over potentially lifting age restrictions to help save the owners, creditors have stepped in, bought the property and paid off the bulk of back taxes and Payment in Lieu of Taxes (PILOT) payments, West Deptford officials announced Thursday night.
GE Capital, the mortgage lenders on the property, bought the property for $25 million at a U.S. Marshal’s sale in March, after an original marshal’s sale in February was postponed.
And as of Wednesday, a total of $1.5 million in PILOT and tax payments had been sent out by GE to bring the property up to date, according to West Deptford’s special counsel for redevelopment, Mark Cimino.
“We’re literally waiting for the money to hit the bank,” Committeeman Sam Cianfarini said.
But besides the revenue flowing into township coffers, GE’s purchase of the property preserves the age restriction on the complex, something the previous owners had fought against over a six-month period last year.
The sale brings to an end a process that began last May, when a bankruptcy proceeding was dismissed and GE moved to begin foreclosure proceedings against Grove Street Urban Realty. A month later, Grove Street’s managing member, Thomas Hedenberg, pitched a plan to the planning board for removing the age restriction, which he called at the time key to the complex’s survival.
The planning board moved that idea up to the township committee, which would’ve had final say on the age restriction, but no action came on that until September, when the township committee sent it back to the planning board for formal consideration.
Meanwhile, GE shifted the property into receivership in August, as the foreclosure proceedings ticked forward. On Oct. 11, U.S. District Court Judge Jerome B. Simandle issued a summary judgment against Grove Street, which owed $34,574,558 to GE at the time—more than $2 million more than what the original loan was for.
Over the four years Grove Street controlled the property, not a single PILOT payment was made, despite the agreement with the township that payments would start as soon as tenants occupied the building, back in October 2009, Cimino said.
“Unfortunately, things didn’t go as planned,” Cimino said.
Before the March marshal’s sale, Grove Street made a pair of last-ditch pitches, including one at a township committee meeting in December, and claimed they could pay $1 million in PILOT payments if the age restriction was lifted, Cimino said.
GE was satisfied with keeping the age restriction, Cimino said, after a 140-page appraisal indicated it was still a feasible option, though the company was advised to reduce the rents—just 34 of 199 apartments were filled at one point last year—and aggressively market the complex.
The overdue PILOT payments and back taxes, along with the taxes remaining to be paid through the rest of this year, could have a significant effect on this year’s budget, potentially reducing the projected tax increase.
Cianfarini indicated the PILOT payments and 2012 tax payments combined could knock 6.25¢ off the 15.3¢ per $100 of assessed value tax increase the township committee said would come as a result of this year’s budget.