2006 Section 108 Project Summaries - New Jersey

Philipsburg Industrial Park
Philipsburg, NJ
Section 108 Guaranteed Loan- $4,700,000

The Town of Philipsburg, NJ will provide financial assistance to Preferred Real Estate Investment, Inc., a for profit Developer, for the redevelopment of a former Ingersoll Rand property into a light manufacturing industrial park, which is to be called Philipsburg Industrial Park. The redevelopment includes the acquisition of the 137-acre brownfield site, rehabilitation of the existing 625,000 square feet of plant facilities, environmental remediation, construction of a 1 mile, four lane connector road linking Route 22 to the park, upgraded utilities, extension of rail spurs for loading/unloading truck freight, and construction of up to 1 million square feet of light industrial space including warehousing and distribution facilities.

The redevelopment will occur in six phases. Phases one and two will consist of the redevelopment of existing plant facilities for reuse as manufacturing space, resulting in the creation of an estimated 208 new full-time manufacturing jobs, and the construction of the connector road. In the remaining four phases, the rest of the site will be divided into eleven lots ranging in size from two to twenty-five acres for development, which will cause the creation of an estimated additional 1,500 new full-time jobs. Also, the Developer will donate six acres to the Philipsburg Housing Authority for the development of a public recreation center.

The Town will use the Section 108 Guaranteed Loan proceeds to fund the construction of the 1 mile, four lane connector road, which will extend from Route 22 to the industrial park. The road will be the main transportation route into the park and will not pass through any residential neighborhoods. The Town will use $500,000 from a 2000 fiscal year Brownfields Economic Development Initiative (BEDI) grant awarded to the Town by HUD to repay the interest on its guaranteed loan. The total project cost is an estimated $28,256,650.

The Community Development Block Grant (CDBG) national objective for the Town's use of its guaranteed loan funds is to benefit low-moderate income persons through job creation. The project will create an estimated 1,700 new full-time jobs.

The Town will repay the guaranteed loan over a 20-year period, paying interest only for the first two years. To secure repayment of the guaranteed loan, the Town pledges an assignment of a special assessment tax imposed on the Developer in an amount sufficient to pay the obligation on its Section 108 Guaranteed Loan. In the event the taxes are not paid according to the terms of the agreement, the Town will place a tax lien on the property. Also, since the Town is a non-entitlement community which receives its CDBG funding from New Jersey's state CDBG allocation, New Jersey has certified to HUD that it will pledge its CDBG funds as security for the repayment of Philipsburg's Section 108 Guaranteed Loan.