Civic JC, a public policy advocacy group, aims to “Protect Jersey City Taxpayers from Variable Interest Rates and Inflated Rent Costs” from the Fulop-Brandywine MLK City Hall Annex deal.
By Michael Shurin/Hudson County View
With Jersey City Ordinance #14.136 – which would enter the city into a lease agreement with Brandywine Financial Services Corporation – slated to be voted on for final passage at the December 17th, 2014 Jersey City Council meeting, a group of taxpayer advocates have started an online petition to raise awareness about the deal.
The petition – which is addressed to Mayor Fulop, the City Council, and the NJ Local Finance Board – cites two sections, which according to the group “expose taxpayers to potential financial harm in the long-term.”
The first deals with “section 4 of the ordinance and Section 1(g) of the lease states that the lease will commence “on the date that is the earlier of (i) substantial completion of the improvements” or (ii) October 1, 2016.”
The petition states that the clause is “unacceptable,” and that the “City should only start paying rent after the building is cleared for occupancy.”
The second issue cited deals with the inclusion of interest rates in the lease, specifically that “the lease includes an interest rate of 4.6%, and states that the tenant (i.e. the City) must pay for interest expense charges above 4.6% for years 6-25 of the lease term.”
The petition claims the “inclusion of interest rate terms in a lease contract is highly unusual because interest rates specific to a mortgage should be the sole responsibility of the landlord, not the tenant.”
Brandywine, which bills itself as “a full service real estate operating company that offers its clients and partners a complete suite of real estate and traditional financial services,” is currently the property manager of the MLK HUB shopping center.
According to The Jersey Journal, “besides being paid on average $4,500 a month to manage the Hub for the JCRA, Brandywine, a Pennsylvania-based real estate company, is supposed to receive a 6 percent commission on the rent for every tenant it brings into the Hub.”
“Brandywine has deferred receiving these payments in order for the Hub to operate and pay its debt,” said Fiore. The agency has agreed to pay Brandywine $262,000 in back commissions when the Hub can support the payment, he said.”
During a mid-August community meeting at the Bethune Center, Mayor Fulop said there was “no downside” to the proposed MLK City Hall Annex deal with Brandywine:
The full ordinance can be found here: Ord. 14-136