WESTFIELD — After several months of heated discussion and debate, the Westfield Council granted its final round of approving votes to the One Westfield Place redevelopment project Tuesday night.
“The approval of One Westfield Place caps almost four years of planning and collaboration with HBC|Streetworks Development, following the 2019 adoption of a new, community-driven Master Plan Reexamination, and a series of subsequent public legislative actions which laid the groundwork for the town to leverage the state’s redevelopment laws to its benefit,” Mayor Shelley Brindle said. “Those of us on the town council who voted to approve this project indeed realize the magnitude of our decision, acknowledging the once-in-a-lifetime opportunity to partner with our largest downtown property owner to create a vibrant downtown that will deliver foot traffic to our local businesses, provide engaging spaces for community gathering, art and events, and enable diverse housing options for newcomers and downsizers.”
As per state regulation, the council held separate public hearings for three ordinances related to the project: one that finalized eight financial agreements between the town and multiple subsidiaries of the project’s designated redeveloper, HBC|Streetworks; a second that calls for the implementation of special assessments for each expected phase of development; and a third that will allow the council to go out to bond for up to $57 million to build two parking decks and support ancillary public improvements.
Mayor Brindle, along with Council members Scott Katz, Dawn Mackey, Linda Habgood, Mike Dardia and Emily Root, voted by unanimous consent to approve each of the three ordinances. Council members Mark LoGrippo, who has voted against various aspects of the project throughout the course of the redevelopment process, and Mark Parmelee, a member of the town’s finance committee who has previously voted in favor of the redevelopment, were both absent from the proceedings due to work-related conflicts.
The first of Tuesday night’s ordinances (2023-07) finalizes the details of a 30-year PILOT (payment in lieu of taxes) agreement reached between the town and the individual redevelopment entities. The eight different limited liability companies (LLCs) (listed on the ordinance as SWD Westfield I Urban Renewal — SWD Westfield VIII Urban Renewal), said the town’s redevelopment attorney, Steve Mlenak, were formed in order to allow the redeveloper to “get better financing and attract a wider array of capital partners.”
“It’s not uncommon for redevelopers on multi-component projects like this [to create separate entities],” Mr. Mlenak said, adding that a similar structure, albeit on a smaller scale, was utilized to facilitate the Westfield Crossing agreement.
According to the ordinance, the town will utilize a portion of the annual service charges paid to it under the financial agreements to provide for the “payment of the principal of, redemption premium, if any, and interest” on whatever Redevelopment Area Bonds that the town ultimately decides to issue.
In other words, said Councilwoman Habgood, chair of the town’s finance and policy committee, the town intends to utilize the revenue generated by the PILOT to “pay itself back” for whatever debt service it may incur as the project develops.
The ordinance notes that the first project site (home to the now-vacant Lord & Taylor building) generated approximately $559,000 in total real estate taxes to all government units in 2022.
“The Redevelopment Project is projected to generate revenue for the town in the aggregate amount of approximately $4.6 million in the first year in which all Zone Projects are stabilized [town officials estimate stabilization by 2030] and approximately $221 million over the full term of the long term tax exemption granted, including approximately $150 million net of debt service due on the bonds,” the ordinance states.
Numerous residents, many of who have been linked to a citizens’ action group known as Westfield Advocates for Responsible Development, said Tuesday that while the projections paint a good picture, PILOTs may not be the only road forward.
“My conclusion is that the four residential projects in the West Zone totaling 296,500 rentable square feet and the one residential project in the North Zone totaling 35,000 rentable square feet would absolutely be built based on conventional taxes and without a PILOT tax break, whether by this developer or any other experienced residential developer,” resident Bill Fitzpatrick, a local real estate financial analyst, said via written communication to the council.
Mr. Fitzpatrick, who submitted a peer review of a financial analysis drafted by Nassau Capital Advisors to the council ahead of Tuesday night’s vote, said the Nassau report was likely too conservative in its estimation of the project’s projected Internal Rate of Return (a common metric utilized to estimate the profitability of potential investments and the basis for the advisory firm’s support of the PILOT).
“[Mr. Fitzpatrick’s] analysis calls into serious doubt whether the granting of a PILOT is justified for this development project. It appears that the Nassau Capital report, which the council is heavily and solely reliant on in granting [this abatement], is flawed in its analysis,” said resident Frank Fusaro, co-founder of Westfield Advocates.
Councilwoman Habgood thanked Mr. Fitzpatrick for his time and assistance, but noted that his analysis, which focused exclusively on the West Zone of the project (comprised of the Lord & Taylor building and its parking lots) was too limited in its scope.
“It is really important for everyone to understand that this is a comprehensive project that the redeveloper applied for,” Ms. Habgood said, adding that while she and the rest of the town’s financial team had run the models referenced in Mr. Fitzpatrick’s report, the difference between the two analyses was fairly negligible.
“We appreciate the comments, concerns and the large amount of time that Mr. Fitzpatrick took to create and analyze the numbers. We always want to make sure that the conclusions that we’re making are sound,” Ms. Habgood said.
The other two ordinances (designated as 2023-08 and Special Ordinance 2023-01), along with a resolution that will allow the town to issue its bonds, provide further details of the project’s timeline and insert a number of protections designed to safeguard the town and its taxpayers against any potential defaults by the redeveloper.
All three ordinances can be found in their entireties on the town’s website.
“It’s my sincere hope that, with this pivot from ‘if’ to ‘when and how,’ we can come together and move forward as a community to support the promise and opportunity of One Westfield Place,” Mayor Brindle said. “I am proud of the process that allowed our residents to be heard and to participate in shaping this plan, and am grateful to live in a community with such a high level of civic engagement.”