City council approved legislation to lend $3.29 million to two companies rehabilitating vacant downtown properties.
Without the money, the projects wouldn’t happen or would have been delayed, officials with the two companies say.
Based on a recommendation from the administration, council voted Wednesday to approve loans equalling 70 percent of state tax credits, at 3 percent interest, to the projects, both on West Federal Street.
The projects will “be a benefit to downtown and its continued growth,” said Mayor John A. McNally.
The projects are:
The $15.3 million conversion of the Wick Building into a 52-unit rental and extended-stay facility being done by the NYO Property Group, a major downtown property owner. The city will loan $2.59 million to NYO.
The $4.4 million conversion of the Wells Building into the new headquarters of Strollo Architects with 12 apartments. The city will loan $700,000 to that project.
The money will be repaid in about 18 months.
Financial problems and national lawsuits related to an Atlantic City boardwalk redevelopment make it difficult for companies with government tax credits to receive loans from lending institutions, said city Finance Director David Bozanich.
State tax credits are given at the conclusion of projects.
The city loan would be secured by a first-lien position on the state tax credits, Bozanich said.
In other matters, council voted 4-3 to have Councilwoman Janet Tarpley, D-6th, replace Councilman Mike Ray, D-4th, as president pro tem. Ray along with Councilmen Paul Drennen, D-5th, and John R. Swierz, D-7th, voted against appointing Tarpley.
Also, council voted 5-2 [Ray and Drennen were the no votes] to remove Ray as chairman of the housing community and economic-development committee, and oust Drennen as chairman of the park and playground committee and take him off the community-development committee. Drennen now serves on only two of council’s 12 committees.
Tarpley and Councilwoman Annie Gillam, D-1st, said they were bothered by comments Drennen and Ray have made about ward redistricting and wanting more money for street repaving and sidewalks in their wards.
Drennen and Ray said they have more-populous wards, and giving an equal amount of money to each ward is unfair.