Maley Offers LumberYard Recap in Video Blog
As financial paperwork was finalized last week, Mayor James Maley recorded a brief video message outlining the ups and downs of the project.
Last week, as the borough put the finishing touches on a number of details involved in the completion of the LumberYard project—including closing out its financing and securing a builder for the remainder of the site—Collingswood Mayor James Maley offered a video recap of the project timeline.
In an effort to showcase the potential of the downtown residential project, Maley delivered his remarks from the finished condo of Tom and Pat Kelly, a couple whose story has circulated in media coverage of the LumberYard.
To start, Maley reminded viewers that the LumberYard project began with a planning grant and public input process, and emphasized that the biggest obstacle to the project has been the housing recession that scuttled its original timeline.
The reason the borough became involved to begin with, Maley claimed in the video, was that private developers’ proposals for the space—some of which included 12-story high-rise towers—didn’t jibe with the small-town downtown image of Collingswood.
“We finally decided that the way to cover the environmental costs that were here and to get something that was of a scale that fit in with our Haddon Avenue downtown was that we were going to have to be very deeply involved with it and really develop this project ourselves,” Maley said in the recording.
Now the time has come for Collingswood to close out the project, Maley said, which is why the borough secured its release from $4 million in loans last week. These will be transferred back to the TICIC banking consortium, the original lender on the project, which will sell them to Ingerman Group.
In turn, Ingerman will replace Costanza Builders as the builders of record on the project in a deal that includes 13 remaining condo units, which Collingswood will sell to raise funds to pay down its debt, and 90 apartment units, which Ingerman will own.
Of those 13 units, Maley says three have been rented and tenants for two more have signed occupancy agreements. By the end of June, the other eight will hit the open market, and the borough will seek to recoup as much as it can to offset the cost of the loan.
“It’s time to look at what the benefits are and what a value this is going to be for this borough for the next hundred years,” Maley said.
Maley claimed that although the recession and subsequent derailment of the project from its original timeline were critical challenges, the fact that the economy spiraled downward made transit-oriented communities more attractive to downsizing or cash-strapped buyers.
“The hard times have been difficult for us, but the hard times have made this project more attractive than it was before the hard times,” he said.
Some of the hardest times were brought on by the severe credit downgrade from Moody’s Investors Service, which gave Collingswood bonds a junk rating almost overnight.
In all, the borough said Moody's refusal to improve its bond rating only materially cost the town about half of one percentage point on its latest loan, which Collingswood claims is the difference between its rating now and what the municipality would have received with an investment grade rating.
“We were able to do everything that Moody’s said we could not do,” Maley said. “Their own rating is the reason that we can’t get the market [interest rate], and the fact that we can’t get the market [interest rate] is the reason that their rating is what it is.”
Maley called the Moody’s approach to the Collingswood downgrade “a national issue,” and said that he had been invited to speak on the trials of the town at a municipal financing panel at a national conference.
“We are moving ahead with this project despite Moody’s,” he said.