NEW BRUNSWICK, NJ—The Middlesex County Freeholders and the New Brunswick Housing Authority (NBHA) Board of Commissioners have each taken actions this year to clear the way for a Philadelphia-based real estate company to sell much of the former county building, which re-opened as a luxury apartment building in 2003.
But only one of the public entities admitted that was what it was doing after being questioned by New Brunswick Today.
Sources say that the building in question, Skyline Tower, may soon be sold by current owner and property manager Pennrose Properties. Another Pennrose luxury building just a few blocks away, known as "The George," might also be on the market.
Skyline Tower was the scene of a stabbing that claimed the life of a 23-year-old less than a year before the news of the building's potential sale.
As we reported, police swiftly arrested the 16-year-old son of a Pennrose employee who worked in the building, and prosecutors later decided to charge him as an adult.
Built in the 1960's to house Middlesex County's growing bureaucracy, the iconic structure was transformed into one of the city's first downtown luxury rental buildings by New Brunswick Development Corporation (DEVCO) and Pennrose decades later.
Officials at the company declined to answer questions about who was looking to buy the property, and whether or not The George was also on the market.
"We're not pulling out of New Brunswick," insisted Lee Reedy, head of Marketing for the company after we pressed about the rumors.
"I just wanted to let you know that we don't comment on pending real estate transactions," said Reedy.
The design of the old county building is different than what had been originally envisioned for the site that would later become "JFK Square," according to a county publication available in the Rutgers Alexander Library.
The block was named for President John F. Kennedy, whose federal government provided funding for the tower.
The eventual design of the 14-story structure, with its square base at a 45-degree angle to the city's street grid, proved to be unique, at least in downtown New Brunswick.
In addition to Skyline Tower and The George, Pennrose also runs three senior citizen housing buildings: Livingston Manor (116 Livingston Ave.) and the two buildings that make up Providence Square (217 Somerset St. and 55 Harvey St.).
The company also still owes New Brunswick a senior housing building, the long-awaited replacement to a public housing building demolished in 2010.
That building, Hoffman Pavilion, was located at 75 Nelson Street in the First Ward.
It is set to be replaced by another on the same site, but city officials including the NBHA say that the project cannot move forward without "tax credits" from the state government.
While the old building was being torn down, Pennrose was identified as the chosen redeveloper to build a replacement building at a Zoning Board of Adjustment hearing.
But there was no mention of the Hoffman Pavilion building at the NBHA meeting which was dominated by discussion of Skyline Tower.
Before the meeting went off the rails, Pennrose Senior VP Timothy Henkel explained that the "Skyline Tower" building was "a very real and genuine redevelopment project that you could easily argue was the beginning of it all."
He said the highrise building was once "an asbestos-laden property… and very much a problem for the municipality and the county."
It had originally been eyed for demolition as part of a project that established a new county building intertwined with the county courthouse.
The Skyline building opened in 2003, with a luxurious lobby, a few floors of court offices, and 70 apartments, 14 of which must be "affordable housing." The apartments are exempt from rent control restrictions.
The public-private partnership that made the luxury building a reality also involved agencies that are often engaged in redevelopment projects: the NBHA and the Middlesex County Improvement Authority (MCIA)
According to the NBHA's special redevelopment counsel Yvonne Marcuse, the MCIA leased the land at 60 Paterson Street to the Housing Authority, "which was more or less a ground lease, a lease for the property itself."
"Now, you're being asked to approve an amendment to the lease," said Marcuse told the NBHA board. "The redeveloper of that project was an entity affiliated with Pennrose Properties."
"It's my understanding that the redeveloper anticipates selling the project," said Yvonne Marcuse, the authority's special redevelopment counsel. Pennrose asked for some "revisions to generalize the lease," she said.
"I think that these changes are being made in advance of the transaction to promote the efficiency of a sale," said Marcuse.
It was the first time that any government agency publicly acknowledged Pennrose had plans to sell the former county building.
Just one month earlier, the county government gave a less helpful explanation of the changes to the lease.
At a January meeting of the Board of Chosen Freeholders, an attorney who previously represented Pennrose but now represents the county government gave no indication that Pennrose had any plans to sell the building.
County Counsel Thomas F. Kelso explained that the former county building was developed "very similar" to the replacement building at 75 Bayard Street.
"All that's really happening is it's allowing the entity that operates and owns those residential components to refinance and change whoever their lender is," said Kelso, making no mention of a potential sale.
"At the time that the lease was done, there was a reference to the leasehold mortgagees and they refer to two specific mortgagees that existed at the time. This amendment simply changes the reference to any leasehold mortgagee."
Kelso has previously represented Pennrose, which was recently selected for a major development project in Edison.
Like the NBHA would do one month later, the Freeholders unanimously voted to give Pennrose what they want so they can sell the old county building.
"We've been approached by people who are interested in purchasing [Skyline Tower] in order to do what's called kind of a value-added transaction," said Pennrose executive Tim Henkel, who made the trip to New Brunswick to speak at the NBHA meeting.
"Potential purchasers have looked at the property, looked at the rents it gets, looked its existing condition and what you might do to take it to today's standards."
"The fact that potential buyers have taken enough of a look at the underlying documents, we've discovered some things that need to be cleaned up."
"Those references can potentially gum up the works with regards to a new transaction," explained Henkel.
Pennrose wanted specific references to the MCIA and Fleet Bank removed, which would "have the effect of broadening the terms so they would apply to other lenders in addition to the original lenders."
The company stressed none of the changes would affect the obligations of a new buyer to offer 14 of the 70 apartments at affordable rents, and to continue reporting its rents to the city's rent control office.
NBHA officials refused to take questions from New Brunswick Today about whether or not The George was also going to be sold, during their board's public comment section, which typically is for any issue relevant to the board, which also approved the George.
But public officials, at least those on the Housing Authority's embattled Board of Commissioners, don't want to talk about those other buildings.
"We're discussing only Skyline," said NBHA Chairman Yirgu Wolde, who works at the NJ Housing and Mortgage Finance Agency. "We're discussing only Skyline… This question should be only for Skyline."
"Mr. Henkel came in to discuss Skyline and we can't allow other questions for Pennrose," said Wolde.
"We have not been asked to take any action on The George," said Marcuse.