Westfield redevelopment project could yield $213 million in town revenue

WESTFIELD – The Town Council is scheduled to vote March 14 on a financial agreement with the developer of the One Westfield Place project, the largest construction project in the town's history, that could yield $213 million to Westfield over the next 30 years.With the Town Council approving the $440 million One Westfield Place redevelopment plan in February, attention has turned to finalizing the details of the agreements, which run into hundreds of pages, with SW (Street Works) Westfield LLC, the developer of the project, to revitalize the downtown neighborhood in the area of the vacant Lord & Taylor and railroad station. Street Works is the development subsidiary of the Hudson Bay Company, which owns the Lord & Taylor property.

The redevelopment agreement, adopted by a 7-1 vote on Feb. 28, "finalizes the terms of the partnership" between the town and SW Westfield, Mayor Shelley Brindle told the Town Council.

The project has roiled the town for years and opponents continued to pepper the Town Council with objections during the Feb. 28 meeting.

Resident Susan Goodman, who maintained that most Westfield residents are opposed to the project, said she has been going door-to-door to gather opinions.

"They don't want you to sell the soul of our town to a corporate devil," she said.

The agreement, the mayor said, "protects the town and holds Street Works to the agreed upon standards" and allows the town "to control almost every aspect of the project until its completion."

A unique aspect of the proposed Payment in Lieu of Taxes (PILOT) financial pact is eight separate agreements for each part of the project.

That, Brindle said, will allow Westfield to start collecting the PILOT money as each segment is completed, rather than waiting for the entire project to be completed.

The PILOT tax abatements cover only the assessment of the improvements, not the assessed value of the land which will still be subject to property taxes.

If the Planning Board approves the site plan at the end of the year, construction is tentatively scheduled to start in late 2024.

The redevelopment plan calls for 205 housing units (172 market-rate units and 33 affordable units), 310,000 square feet of office space, 25,400 square feet of amenity space, 27,410 square feet of commercial (including restaurant) space and 1,144 private parking spaces. Of the 205 housing units, 154 will be age restricted.

The public improvements include two parking garages, a North Avenue Town Square, a South Avenue Town Green, train tunnel improvements, streetscape improvements, Quimby Street enhancements and a new smart-technology town parking system. Cost of the public improvements is estimated to be $54.2 million.

The town will issue $43.7 million in Redevelopment Area bonds to fund the improvements. The developer will contribute $8 million, and the town will use $5.5 million, half of the estimated amount realized from the sale of town property to the developer.

The town will cap the debt service on the Redevelopment Area bond at $3.6 million a year. During construction and for three years following the project stabilization, the town will impose a special assessment on each of the properties to cover the debt payment. That will protect the town from using general revenue to pay off the bond until the PILOTS are stabilized to cover the costAny excess PILOT revenue can be used at the town's discretion for any lawful purpose, including the school district.

If the annual debt payment exceeds $3.6 million, then town will decide which projects can be removed from the list of public improvements.

In 2022, the properties generate about $559,000 in total property taxes. Over the course of the 30-year agreement. the annual PILOT monies will average $7 million.

The project is also expected to generate almost 1,400 new jobs in Westfield's downtown.

Email: mdeak@mycentraljersey.com

Mike Deak is a reporter for mycentraljersey.com. To get unlimited access to his articles on Somerset and Hunterdon counties, please subscribe or activate your digital account.

This article originally appeared on MyCentralJersey.com: Westfield redevelopment project could yield $213M in town revenue