[macmini]

AS for Trump Tower kazpmk only the 55-story building is under construction and as of right now the second tower may not get built.

PAYMENT MISSED

Question mark for more development at Trump complex
Monday, July 10, 2006
By KEN THORBOURNE
JOURNAL STAFF WRITER

The Donald is hedging his bets on a twin-tower condo complex he is building in Downtown Jersey City.

The casino and development mogul told The Jersey Journal he and his main partner in the deal, Hoboken-based Metro Homes, reneged on paying $1.9 million to the city, due June 1, because he's not convinced the project's proposed second tower will become reality.

"I think it's going to be built," Trump said on Friday. "But if the world goes to hell in a handbasket it won't be built - unless you're very foolish."

The first of two towers of what will be Jersey City's Trump Plaza is under construction on Washington Boulevard between Morgan and Bay streets. The first tower - purportedly the tallest residential building in New Jersey at 55 stories - is fully financed and will be a huge success, Trump declared.

But the second tower, planned for 50 stories, "may or may not get built depending on market conditions," Trump said.

"We never really had a starting date on the second tower," he added.

Metro Homes, the majority partner in this venture, did make a $2 million "pre-payment" to Jersey City for Tower I last June, city officials said.

Dean Geibel, Metro Homes's managing partner, said Tower II will be built and the $1.9 million "pre-payment" will be made - just not now.

"Since we know we are not going to be putting this building up right now, it seems a shame to lock it up (the money due the city) in that way," Geibel said.

The "pre-payment" amounts to a no-interest loan to the city; the city repays the money once the developer starts selling units and making payments-in-lieu-of-taxes to the city under its tax abatement agreement.

James McCann, the attorney representing Metro Homes, told the City Council at last week's meeting that banks financing the project are jittery about the prospects for selling out the second tower - perhaps thinking the bubble is about to burst in Jersey City's condo market.

McCann said the banks aren't interested in putting more money into the project until 25 to 30 percent of the units in Tower I are sold, McCann said.

Those units won't go on the market until October, Geibel said, but selling shouldn't be a problem - the 455-unit Tower I has a 3,000-person waiting list, he said. The project, announced last September, is scheduled to be completed in 21 months.

On the table at the City Council meeting, held Thursday morning, was a resolution backing up the due date for the $1.9 million pre-payment to May 1, 2007. In addition, the resolution called for a 5 percent late-payment penalty, and for the developers to buy insurance guaranteeing the money. This "payment bond" would cost the developers roughly $100,000, McCann said.

City officials withdrew the resolution to consider a proposal by McCann to delay when Metro Homes has to purchase the "payment bond."

This fiscal year's spending plan included the $1.9 million pre-payment, but taxpayers won't be left holding the bag since other projects have generated more money than expected, said Jersey City Business Administrator Brian O'Reilly.