Broadway Arts tries to steady finances

Broadway Arts tries to steady finances
Foreclosure action filed by lender against developer
BY KENNY WALTER Staff Writer
Broadway Arts Center (BAC) is reorganizing financing after a foreclosure action was filed against the Long Branch developer by a lender.

Todd Katz, a principal in Broadway Arts, confirmed the reorganization and said the shuffle made necessary by the filing of the foreclosure action would not hinder the project's future.

Katz said last week that BAC is working to "correct" the foreclosure problem and that it shouldn't hinder the developer from moving forward with the lower Broadway project.

"It is something we need to address," Katz said. "Short term won't be a problem. If we don't correct it, then it would become a problem in a year or two.

"We are working diligently through the process," Katz added.

The foreclosure action was filed Aug. 10 in state Superior Court in Freehold by the Community Loan Fund of New Jersey, a nonprofit corporation that made loans totaling some $2.2 million to Broadway Arts. Community Loan Fund initially provided $1.1 million in financing for the Broadway Arts Center project, a centerpiece of the city's redevelopment plan, in May 2006. The lender subsequently entered into a note and mortgage modification agreement with BAC that brought that amount to $2.2 million in December 2006.

According to the court document filed, "the land and premises … for which possession is sought" include some 27 properties in the Broadway Arts Center redevelopment zone.

A spokesman for Community Loan Fund declined to comment on the foreclosure action.

Katz said that the down economy has affected development, but things look to be improving.

"We are starting to recover from the bad economy," he said.

When asked how BAC's financial troubles would impact the future redevelopment of the downtown Broadway district, Long Branch Mayor Adam Schneider said he did not have the answer yet.

Schneider said that BAC is currently up to date on tax payments as of last week.

"If the taxes get paid and they manage to get organized, then our dealings will be with BAC," Schneider added.

The agenda for the City Council meeting of Sept. 22 listed Broadway Arts as a topic to be discussed during a closed session of the council.

Principals in the Broadway Arts zone are the Katz and Siperstein families.

Plans for the downtown Broadway Arts Center zone call for BAC to develop the Broadway corridor, which is the first 9 acres of the entire Broadway redevelopment zone.

The corridor extends two blocks from Second Avenue to Memorial Avenue and from Union Avenue to the north and BelmontAvenue to the south.

Plans for the project call for the properties to be razed and replaced with a mixeduse

arts and theater district. BAC would consist of commercial space, residential and live/work units, office space and parking garages.

BAC is one of six zones in the city slated for redevelopment. Also labeled as redevelopment zones are Beachfront South, Pier Village, Hotel Campus, Broadway-Gateway

and MTOTSA.

BAC is the latest project in the city to come under financial stress.

Last year the city filed a lawsuit against the developers of Ocean Place Resort and Spa in the Hotel Campus redevelopment zone for failure to make a $1.4 million payment to the city.

The city recently reached an agreement with residents of the MTOTSA beachfront neighborhood, ending litigation that challenged the city's right to take their properties through eminent domain to clear the way for an upscale condominium development.

A lawsuit has been filed against the city by property owners in the Broadway-Gateway zone, seeking compensatory and punitive damages stemming from the city's designation of the zone and all other zones as blighted and subject to eminent domain taking.

Contact Kenny Walter at

kwalter@gmnews.com.


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