Members of the Middletown Township Committee have adopted an ordinance that authorizes an agreement with Middletown Municipal Complex Urban Renewal, LLC, for the $56 million town hall redevelopment project.
The agreement officials adopted on Dec. 7 states that the redeveloper of the existing 9.7-acre municipal complex at 1 Kings Highway (Middletown Municipal Complex Urban Renewal) will privately finance and carry out the construction of the new town hall complex at that location.
In return, capital lease payments will be made by the township over a 30-year period to the redeveloper and Middletown’s government will occupy the new town hall.
After three decades, Middletown will assume ownership of the redeveloped property and the improvements, according to the ordinance.
“The township has conducted significant analysis regarding the costs and benefits of the agreement, which allows the township to construct a new town hall expeditiously with a guaranteed maximum contract price, without incurring any debt service and have minimal impact on future taxes,” the ordinance states.
Middletown public information officer Tara Berson previously said officials’ intention is to house municipal facilities in the majority of one central location. Berson said municipal buildings are currently spread throughout the 42-square-mile township.
Officials said they intend to maintain the ability to use and operate the existing municipal facilities during the construction of the new municipal complex.
Township Administrator Tony Mercantante previously said there would be pad sites on the perimeter of the municipal complex, along Route 35, which will be developed and provide a revenue stream.
According to a document issued by municipal officials on Dec. 7, “the township will subdivide two pad sites along Route 35 which can be sold outright or leased through the redeveloper who would either operate or sell them with the township. These sites will also become taxable commercial property.
“If the township sells them outright, 60 percent of the sale price for the pads would immediately be received by the township. Under a lease arrangement, the township would receive 50 percent of the revenue without any responsibility for operation. In either scenario, the township will also receive new tax revenue from the pad sites,” the document states.
The anticipated set-off of the pad site sale or lease would be $6 million to $10 million, the document states.
According to the document, Middletown would not have received the same benefits if the township entered into a traditional bond financing process to construct a new municipal complex. The document outlines the pros of the planned redevelopment process and the negatives of using traditional bond finances to fund a municipal project.
Several residents asked questions about the ordinance prior to the committee’s vote. None of the residents who spoke strenuously objected to the governing body’s plan to partner with a redeveloper.
Mayor Kevin Settembrino, Deputy Mayor Anthony Fiore, Committeeman Anthony Perry, Committeeman Rick Hibell and Committeewoman Patricia Snell voted to adopt the ordinance and proceed with the redevelopment project that will result in the construction of a new municipal complex.
While no start date was provided for the project, officials said it is anticipated that construction of the new municipal complex will take between 18 and 24 months once it gets underway.
