Princeton Council slated to decide whether to grant changes to Waxwood housing agreement tonight
The Princeton Council is slated to decide Monday night whether to grant J. Robert Hillier’s request to permanently change a developer’s agreement regarding the historic Waxwood property on Quarry Street.
The town approved the Waxwood development as 34 condominiums back in 2002 and Hillier was granted variances because the zoning board liked the plans that included three moderate and low income units and five foundation units that would be sold to residents who had lived in the Witherspoon-Jackson neighborhood for at least 10 years, or their descendants. Back then the asking price for market rate units was going to start at $175,000 for a one-bedroom unit, according to published reports from 2002.
Hillier then asked and was given permission to rent out the units as apartments for five years as part of an amended developer’s agreement so he could receive federal tax credits for the project. The Federal Historic Preservation Tax Incentive Program entitled owners of historic properties to a tax credit of 20 percent of rehabilitation costs if the plans closely resembled the building’s original structure.
Hillier later asked the former Princeton Borough Council for another five-year extension after the housing market tanked, saying he would be unable to get the prices he wanted for the units. Last fall, Hillier asked the Princeton Council to change the terms of the agreement permanently so that the units remain rentals. He is proposing to swap the eight units (three affordable and five discounted foundation units for sale) to seven affordable rental units.
Hillier purchased the Waxwood property in 2002 for $2.2 million, according to property tax records. On Aug. 8 of 2016, he sold the Waxwood to Robinhood Plaza, a Livingston business owned by Avner Netter, for $11.6 million, according to the deed filed with the county clerk and obtained by Planet Princeton.
In 2016, the property was assessed at $4.8 million. A one-bedroom unit currently rents for up to $2650, according to the Waxwood website.
At an August meeting of the council, Hillier said he has not made a penny on the Waxwood and also claimed he never took the federal tax credits for the project.
An appraiser recently estimated that the market rate for Waxwood units is $400,000, but foundation units were appraised at $310,000 because of the restrictions placed on them in the developer’s agreement, municipal officials said at the August meeting. Under the original developer’s agreement, Hillier would create a foundation that would provide a 20 percent down-payment for the foundation units. The down-payment would be $62,000, meaning the remaining cost for the five foundation units would be $248,000 each, officials said at the August meeting. It is unclear how many people in the neighborhood were aware of the $248,000 figure (after down-payment by the foundation) to purchase a unit. Hillier told the council in a memo last week that none of the current tenants who are renting affordable units are interested in buying their units, and said the foundation unit renters he spoke to recently were also not interested in buying. A resident said during that meeting that at least one person who was waiting for the opportunity to buy a unit gave up and moved out of town.
George Cumberbatch, an African-American tenant who has roots in the Witherspoon-Jackson neighborhood and works as a municipal parking garage attendant, has been renting at the Waxwood since 2004, waiting for his opportunity to buy his 1-bedroom foundation unit. Cumberbatch, and possibly others, were concerned about the loss of opportunity to purchase a unit over the years. Cumberbatch hired a lawyer to represent him regarding Hillier’s request to change the units to rentals permanently. In August, the council postponed making a decision on the Waxwood at the request of Cumberbatch’s lawyer, Robert Lytle, because Cumberbatch was out of state caring for a sick relative.
“What Mr. Hillier did when he developed property is he made a promise to foundation unit members to rent with option to buy. It wasn’t just an option to buy — it was an option to fulfill a dream,” Lytle told the council at the August meeting. “Mr. Cumberbatch is not a man of means. He was provided the opportunity to lay down firm roots in area he has been in for long time. It was also an opportunity to afford a house, a place to live, a sentiment all of us hold very dearly…Hillier is asking for the opportunity to essentially break that promise. He is asking the council for am imprimatur for that action…”
A decision on the issue was postponed until the Sept. 25 public meeting.I n the meantime, lawyers for Cumberbatch and Hillier tried to negotiate a settlement.
In a Sept. 21 letter to the Princeton Council, Hillier then accused Cumberbatch and his lawyer of trying to “hold him up” for cash before the Sept. 25 hearing by threatening to sue him and the municipality. He also said in the letter that foundation unit residents were never promised they would be able to buy their units. “None of the affordable or Foundation tenants was ever told that he or she would be entitled to buy the unit they were renting. It is not in the leases; it is not in the 2002 agreement with the Borough; it was never the case,” Hillier wrote. “Of course we would have offered to sell the units to existing tenants – any landlord would. But we would want to sell the units to the most qualified buyer, who may well not have been the existing tenant.”
At the August council meeting, Hillier said he has been unable to fill vacancies in the foundation units and that two were empty. He said he sent four letters to all the black churches in the neighborhood saying the Waxwood had vacant units that were renting for $1,350. “Nobody has come forward,” he said.
Councilwoman Jo Butler said it was hard to understand why Hillier wasn’t lowering the rents for the foundation units if they were sitting there empty. “You can adjust the price to get any occupancy you want, so I don’t understand,” she said. “You’re talking about wanting people in neighborhood to have opportunities, but the price is at a level they can’t afford.”
Hillier said he been doing outreach and that he could rent the units for a lower price. “The problem is we can’t advertise it,” he told the council. “If you wanted to rent it and you don’t qualify — all of a sudden we are into discrimination issue.” Hiller’s and his representatives told the council there was a question as to whether advertising broadly violates the federal fair housing act by restricting occupants to a certain group of people. They said they didn’t want to risk of advertising more broadly, and that their technique is to get word out informally around neighborhood.
“So you’re allowed to discriminate if it is only by word of mouth?” Butler asked, requesting that lawyers look into the issue to make sure the neighborhood preference doesn’t violate fair housing laws.
There were suggestions that the neighborhood residency requirement for the foundation be shortened to five years. It was unclear whether five years has sometimes been used in the past. But Witherspoon-Jackson residents who were at the August meeting were adamant that it be 10 years. Councilman Tim Quinn suggested that in the spirit of partnership they could redefine who qualifies as a neighborhood resident and expand the definition.
If the property remains rentals, he has proposed to create a revolving fund of $400,000 to help people in the neighborhood who are having difficulty paying their mortgages in lieu o the down-payments he would have made to home buyers from the neighborhood. The money in the fund would be provided to neighborhood residents in the form of an equity loan.
Hillier has enlisted former Witherspoon-Jackson resident John Bailey and his son, Kamau Bailey, to rally support from the neighborhood for his proposal. Hillier wrote a letter to Witherspoon-Jackson residents recently about a survey and then Kamau Bailey visited homes to conduct the survey.
It is unclear what kind of precedent is created by changing a developer’s agreement many years later.
The Waxwood, a National Historic Register site, was built in 1858. The site became the Witherspoon School for Colored Children in 1908 and was later renamed The Waxwood in honor of Howard B. Waxwood, Jr., principal at the school between 1936 and 1948. In 1947, segregation of public schools was declared unconstitutional in New Jersey, and and the “Princeton Plan” was established, making the building the Borough’s new junior high school. The building was turned into the Princeton Nursing Home in 1966, when the John Witherspoon Middle School was built.
Links to Source Documents
Aug. 12, 2004 Waxwood Master Condominium Deed
Aug. 8, 2016 Deed – Hillier sells Waxwood to Robinhood Plaza
Aug. 8, 2016 Easement Agreement – Allows Hillier to lease 4 parking spaces for his business on Witherspoon Street for three years with option to renew.
Sept. 21, 2017 Hillier Letter to Princeton Council
2002 Princeton Borough Resolution Regarding Developer’s Agreement
Resolution Council will vote on Sept. 25
[pdf-embedder url=”https://planetprinceton.com/wp-content/uploads/2017/09/image-1.pdf” title=”image (1)”]
I truly don’t understand what the issue is here — and when I say that, I literally mean I don’t understand what the issue is/issues are.
Is it the precedential aspect of changing an agreement with the municipality made years ago? If so, I don’t understand that because any contract can be updated to result in something better for both sides, and there’s nothing wrong with that. I’ve done that in a public agency – many times for the same deal – so this point confuses me.
Is it that Hillier has reneged on an agreement with a specific tenant?
Is it that Hillier appears to have profited on this development project?
I also don’t understand Jo Butler’s questions about occupancy rates and lease rates. Is Hillier obligated to lease the units at whatever rate will fill the apartments? Does the Council think that a monthly rental of $1,350 per apartment is unaffordable, or is that the market to which Hillier is restricted simply doesn’t generate enough demand for housing that there’s a market-clearing rental rate?
Anyhow, like I said, I don’t understand what’s going on here, and would appreciate any insight available…
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