HILLSBOROUGH: Township commits to purchasing 335 acre plot, takes out $20M bond to fund acquisition

A more than 300-acre plot of land sandwiched between Hillsborough Township’s Mountain View and Ann Van Middlesworth Parks will be acquired with some financial assistance from the county to the tune of $20 million in bonds.

According to a bond ordinance that received unanimous support from the township committee during its July 11 meeting, the purchase and remediation of the property will be paid for through a lease purchase agreement with the Somerset County Improvement Authority.

Anthony Ferrera, the township’s business administrator, called the acquisition a “very big win” for the municipality, which he says has sought to stymie any potential development on that parcel for a number of years.

“The town has been in litigation for over 10 years on this property because developers were looking to put hundreds or thousands of homes there,” Ferrera said. “The lawsuit was to stop the move to residential zoning for that property.”

Now effectively under township control, the former GSA Belle Mead Depot site will undergo up to 18 months of remediation.

This was not the first time that the plot changed hands over the last 20 years. More than a decade ago, the property was part of a bank auction, where it sold for $2.5 million. At the time, the township did not bid for the land.

Since then, the property has been on the municipality’s radar, with regular negotiations to purchase it over the years, Ferrera said. The main sticking point for the township, however, was that the asking price was always expensive for what Ferrera called a “dirty property.”

In total, Ferrera said the township estimates that it will need to spend $18.5 million of the county’s $20 million bond for the acquisition of the property, with the remaining $1.5 million left over to cover any unexpected costs.

Commiteeman Frank DelCore said the agreement gives the township a “significant flexibility from a financial standpoint.”

“The Improvement Authority has been willing to work with us to ensure that we could put something in place that would not impact us in the short term or long term,” DelCore said. “It will be an extended term on the financing that will have two short-term notes on an annual basis…and we could go up to 20 years beyond the initial two.

“At the end of the day, from a debt service perspective, it’s essentially a wash once we begin the debt repayments,” DelCore continued.

Officials said the township will not begin making any payments on the bonds until 2019.

According to the township, funding for the property and its remediation will be doled out as certain milestones are met. Only once a certain amount of the property has been cleaned and tested will bond money be disbursed.

“We would be foolish to spend all $18.5 million and not make sure that the property is clean,” Ferrera said.

The effort to acquire this piece of property is not unlike the joint effort made by the township and the Somerset County Improvement Authority to purchase the 369-acres of the former GSA Belle Mead Depot where Mountain View Park is now located. That property was purchased for just less than $15.8 million.

Though that piece of property was recently reopened as a new state-of-the-art sports complex for the surrounding region, officials said there are currently no plans for this new 335-acre plot at the moment.

“At the very least, we wanted to stop any further development that could possibly take place,” Ferrera said.

Despite the congratulatory stance of the township’s administration on this matter, Democratic township committee candidates Jane Staats and Harry Burke questioned how open the governing body was being with the purchase.

“The amount of $20 million was not mentioned in the agenda to the general public, unlike other items on the agenda that had much smaller amounts,” Staats said after the meeting. “For the sake of being straightforward and open to the public, that amount should have been listed in advance in the agenda.”

“The township committee is authorizing a $20 million debt, and they waited until the last minute to let the public know that they have pledged the full faith and credit of the township to repaying this debt,” Burke said. “For a township that puts out a weekly newsletter and calls itself fiscally responsible, it should be expected that a hearing for $20 million in debt would be widely publicized.”

Municipal officials countered their complaints by pointing to the fact that the full bond amount was listed in the ordinance.

“Bond counsel prepares all of the ordinances for the township and the amount was in the ordinance itself,” Ferrera said. “Do we list every single paragraph in the agenda? We don’t, but all of it is in the ordinance.”