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Paladino, Monge offer insights into P3 at forum

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Chris Paladino, president of New Brunswick Development Corp.
Chris Paladino, president of New Brunswick Development Corp. - ()

Public-Private-Partnerships took center stage at the Yard @ College Avenue in New Brunswick at ICSC’s P3 Forum on Wednesday. Monge Capital Group’s founder Jeffrey Monge and the president of the New Brunswick Development Corporation Chris Paladino spoke on their previous successes, the challenges and what the near future may hold within their industry.

“Essentially, (public-private-partnerships) is all we do at the New Brunswick Development Corporation, when we work in Atlantic City and work in Newark,” Paladino said. “We end up doing the project that other people don’t want to do because there is not enough money to be made. And it’s an arduous course of events.”

The DEVCO president outlined several of the projects the corporation and Rutgers University have teamed up on and highlighted the benefits the projects brought to the City of New Brunswick and the university as a result.

Paladino said that while the P3s deals have sure benefited all parties involved, they can sometimes allow for very specific constraints. At the Yard @ College Avenue, Paladino said DEVCO and the university had to negotiate a unique structure with Rutgers University to make the project work.

“The land (at The Yard) is still owned by the university, they leased it to us, we built the building and we leased them the upper floors for the students,” he said. “We operate and manage the ground floor for 15 years.

The Yard @ College Avenue in New Brunswick.
The Yard @ College Avenue in New Brunswick. - ()

“One of the things we were able to do was, any rents and any profits that come from this project stay in this project. That is why we’re able to always pick up the garbage and do Easter Egg hunts and do music every Friday. We make sure all of the profits from this project remain here.”

And while land ownership, uses and operations are all fair game in P3 negotiations, DevCo still needs to be able to put together a financing structure that meets the requirements of state government for incentives and meets the needs of its private partners.

“We, just as a mantra, try to do projects that have extraordinary critical mass that use public-private-partnerships and build policies that for the private sector and the public sector alone aren’t available,” Paladino said. “What we usually do is, we try to take a public policy … and then walk around and figure out who else could we include to create the economics to create a project of this magnitude.”

The Yard was the recipient of a $35 million Urban Transit Hub Tax Credit award from the New Jersey Economic Development Authority and received an additional $50 million in higher education bonds.

And Paladino’s other ongoing project in Atlantic City, the Atlantic City Gateway Project, also required economic development incentives on top of financial partners to get off the ground.

DEVCO has also engaged Rutgers University in Newark. At 15 Washington St., where Rutgers previously housed its law school, it led the rehabilitation efforts and was able to secure the capital to create student housing for undergraduate and graduate students.

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Jeffrey Monge of Monge Capital deals with developers seeking to take advantage of state and federal incentives.

Monge’s experience in P3s dates back to his time working for the Upper Manhattan Empowerment Zone, where he oversaw the execution of economic development initiatives and grants.

And in Newark, the founding member was involved in obtaining the necessary tax credits for Audible to be able to set up its home in Newark.

“What was happening in Newark (at the time) — and this happens everywhere, not just in Newark and in New Jersey — was you had economic development groups that try to bring economic development into their towns, but they have no money,” He said. “And what we ended up doing was partnering and introducing Federal New Market tax credits. So, as people came into the table, we had people say ‘My idea is not as big as a DEVCO to get an EDA incentive, how do we make these deals pencil out?’”

As an intermediary for private and public entities, Monge focused on the power P3s can have in low-income neighborhoods, but warned about the potential for shortcomings in their implementation.

“As we all know, there is a fine line between community development and gentrification,” he said. “We have to figure out a way to invest in the community and try to create economic impact for the community, not just the developers, which is a very difficult thing to do.

“But the reality is, if you are able to raise capital, you should get the return.”

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Mario Marroquin

Mario Marroquin


Mario Marroquin covers real estate. A native of El Salvador, Mario is bilingual in English and Spanish. He graduated from Penn State University and worked in Pennsylvania before moving to New Jersey. His email is mariom@njbiz.com.

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