Protect Jersey City Taxpayers from Variable Interest Rates and Inflated Rent Costs

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Protect Jersey City Taxpayers from Variable Interest Rates and Inflated Rent Costs

This petition had 69 supporters

Civic JC started this petition to NJ Local Finance Board and

Jersey City Ordinance #14.136 is a $45 million, 25-year lease contract between Jersey City and a financing real estate company called Brandywine. The ultimate purpose of the lease contract is to finance the construction of a new City Hall Annex, a 60,000 square foot, 3-story office building for City employees. We believe this lease is unacceptable in its current form and requires modification before it can proceed with a City Council vote.

First, section 4 of the ordinance and Section 1(g) of the lease states that the lease will commence "on the date that is the earlier of (i) substantial completion of the improvements" or (ii) October 1, 2016.  This is unacceptable. The City should only start paying rent after the building is cleared for occupancy. We therefore believe the City should start paying rent only after a certificate of occupancy is granted for the building. 

Second, Section 4 of the lease includes an interest rate of 4.6%, and states that the tenant (i.e. the City) must pay for interest expense charges above 4.6% for years 6-25 of the lease term.  The inclusion of interest rate terms in a lease contract is highly unusual because interest rates specific to a mortgage should be the sole responsibility of the landlord, not the tenant. We believe this language around the interest rates should be removed entirely so that taxpayers are not exposed to interest rate risk over a 20 year period.

We believe these two issues expose taxpayers to potential financial harm in the long-term.   We therefore ask that you pull this lease from the December 17, 2014 City Council agenda and only reintroduce it when these two items have been addressed.

Thank you.

Petition Closed

This petition had 69 supporters