Creating the Infrastructurefor Future Investment

2011 NJ Future Redevelopment Forum

March 4, 2011

NEW BRUNSWICK DEVELOPMENT CORPORATION“DEVCO”

Not For Profit Development Company

35 Years Experience in Urban Redevelopment with $1.6 billion in public and private investment

Completed redevelopment projects in New Brunswick and throughout the State

PLANNING FOR FUTURE INVESTMENT

“Make No Small Plans” Use Predevelopment Phase as a chance to

identify opportunities

Identify Local Strengths Existing Infrastructure, Key Participants

Understand Marketplace Changing requirements from developers,

lenders and end users

Identify Low Cost Sources of Capital

GATEWAY TRANSIT VILLAGE

WELLNESS PLAZA

FERREN MALL REDEVELOPMENT

Use predevelopment phase as opportunity to plan the context of the larger area

Revise and refine plans with continuous input

Address challenges and identify solutions early

1. OPPORTUNITY TO PLAN

FERREN MALL REDEVELOPMENT

SOM STUDY - 2002

HAAHS MASSING STUDY - 2006

FX FOWLE MASTER PLAN - 2008

FERREN MASTER REDEVELOPMENT PLAN - 2009

2. LOCAL STRENGTHS Identify Strong Local Partners + Uses

Public Sector Corporations Institutions Small Businesses

Determine Major Downtown Strengths Train Station Orientation Parking Strong Retail Building Areas

Downtown Train Station Strong Partnerships City, NBPA, Rutgers, RWJ, Public

Schools)

Neighborhood Connections Strong Existing Downtown

Housing Mix with the need for Additional Retail, Parking and Residential

NEW BRUNSWICK LOCAL STRENGTHS

NEW BRUNSWICK PARKING AUTHORITY

CONNECTION TO NJ TRANSIT TRAIN STATION

BARNES & NOBLE RUTGERS UNIVERSITY BOOKSTORE

WELLNESS PLAZA – NBPA PARKING

WELLNESS PLAZA - RWJ FITNESS & WELLNESS CENTER

WELLNESS PLAZA - RWJ FITNESS & WELLNESS CENTER

Demand for both rental and for sale residential units

Demand for mid sized office footprints

Existing and future demand for public parking

Underserved retail market

3. UNDERSTANDING THE MARKETPLACE

GATEWAY TRANSIT VILLAGE

WELLNESS PLAZA

WELLNESS PLAZA – FRESH GROCER

Redevelopment projects that address public purposes Workforce Housing at mid market price

levels with 20% affordable set aside Urban Grocery store with higher

operating costs and tighter margins Fitness and Wellness program with

discounted public memberships

Resulting Financing structure requires combining traditional sources of capital with low-cost, mezzanine or soft debt.

4. SOURCES OF CAPITAL

RESIDENTIAL FINANCING First Position Mortgage Urban Transit Hub Tax Credits (UTHTC) Bridge Financing for the UTHTC New Markets Tax Credits Equity

GATEWAY TRANSIT VILLAGE FINANCING

PARKING AUTHORITY FINANCING Build America Bonds Recovery Zone ED Bonds (Super BAB’s)

Received $55 million from the NJEDA in Urban Transit Hub Tax Credits based upon total eligible capital investment.

Allocated $27 million toward the Gateway project.

Developer (DEVCO/Pennrose partnership) transferred the tax credits to an investor at the statutory minimum of 75 cents for every dollar of tax credit.

Secured bridge financing to provide funds to the project during construction. Take out of the loan occurs after completion of the project.

URBAN TRANSIT HUB TAX CREDIT

GATEWAY TRANSIT VILLAGE NMTC STRUCTURE