Hudson Terrace News 10/1/2020
As discussed with the Board, Lennard Charles Board President and Richard Bendix Property Manager have reached out to several builders regarding developing the rear parking lot at Hudson Terrace. The concept is to have a developer build on the back parking lot with a structured deal resulting in a payoff of our underlying mortgage.
The underlying mortgage was originally $6,000,000, term of 30 years, due and payable or maturing in 10 years. At such time of the "balloon" period the balance of the loan becomes due and payable.
Balance of loan which was $6,000,000 10 years ago or in 2013 will be about $5,000,000 when it is due- 10 years later or in 2023.
The purchase price the developer pays will be equal to the amount of about $5,000,000.
Such amount would be paid off after Municipal approvals and upon commencement of construction.
If the cooperative does not come to terms with the developer, then in about 2.5 years the remaining balance of the loan will have to be paid off or the loan will have to be refinanced.
If the coop comes to terms with the developer then the deal will be structured to avoid or eliminate prepayment penalties.
The savings to the cooperative would be about $30,000 per month resulting in a savings of $135p/m apx per unit which does not include any soft costs (bookkeeping, accounting, refinance costs and fees, etc.). The estimated total savings to each shareholder is about $150 p/m all costs considered.
Meetings, discussions and negotiations with James Demetrakis, a well known local developer have been taking place for about 6 months. He has developed properties such as The Centre and Carlyle Towers- Cliffside Park, Crown Village, Panorama, Grand Cove, The Metropolitan – Edgewater, Hudson Mews and Metro Place – North Bergen to name a few.
His concept is to deck the rear lot creating covered parking for the shareholders of Hudson Terrace creating a foundation for a new building which will not exceed 90’ in height or about 3-4 stories above the existing 3 buildings. Parking for the new building will be on the second level of the deck.
Amenities will be on the deck, the pool either on the deck or rooftop.
The new building will have about 100-125 units. It will have amenities including a pool, health club, fitness center, lounge and business center. The use of amenities by shareholders will be optional and voluntary and at the same cost the developer charges the residents of the new structure.
The current cost for use of the amenities are estimated at $50 p/m.
During the due diligence we discovered 7th Street is a “paper street” and will be the main ingress and egress for the new building. Shareholders of Hudson Terrace who park in the rear can also use 7th Street. Residents of the new building will be allowed ingress and egress off Hudson Terrace.
The parking space layout will not change as the developer will build around the existing parking configuration. The beneficiary of any extra parking fees for covered spaces has also been discussed. Parking during construction must accommodate the relocating of cars temporarily. Several ideas have been tossed around.
Assuming the Board and shareholders agree with the plan proposed by the developer, then the Agreement will depend on plans submitted and approvals obtained by the Municipality.
All costs related to the above will be the responsibility of the developer.
Once the underlying mortgage is paid off, the Board and shareholders can discuss converting the cooperative to a condominium. There are several advantages to either converting or keeping the current structure. These advantages are subject for discussion at a later date.
Lennard Charles, Board President