[AsburyPark] Copy from earlier attachment

[Jim Keady]

Here is the sample memo I had tried to attach earlier today.   Peace, JWK   TO:                   TERRY REIDY FROM:            JIM KEADY RE:                  12 % PROFIT CAP ON LTTE PROJECTS                        DATE:              JULY 28, 2005   Terry,   I am writing in the hope of getting clarification on the issue raised by Maureen Nevin at the last City Council meeting regarding the limit on profits in the oceanfront redevelopment area.  Prior to Ms. Nevin’s questions/comments, I had been personally researching this issue as it was brought to my attention by another citizen.  I have done some very cursory research on this and from what I have been able to discern, it may very well be the case that the profits of the sub-developers are limited to 12% by state law relating to LTTEs.  If my research is correct, any profit above 12% would come to the city, which I am sure would be very welcome news for all of us.    To get to the bottom of this, I would like to have the following questions answered:   Are the sub-developers on the fast-track properties “urban renewal entities”? If they are urban renewal entities, and have received their Long Term Tax Exemptions (LTTE) under the auspices of the Long Term Tax Exemption Law, I believe they would have restrictions placed on them regarding profit:   “Any duly formed corporation, partnership, limited partnership association, or other unincorporated entity may qualify as an urban renewal entity, provided that it: a) agrees to limit its profits.”   “’Allowable profit rate’ means ‘the greater of 12% or the percentage per annum arrived at by adding 1-1/4% to the annual interest percentage rate payable on the entity’s initial permanent mortgage financing.’  Id. ‘Net profit’ means ‘the gross revenues of the urban renewal entity less all operating and non-operating expenses of the entity, all determined in accordance with generally accepted accounting principles.’ Id.”    (NJ Law Journal, June 21, 2004 – page 2)    If the sub-developers are urban renewal entities and are receiving LTTE’s, were they made aware of this state law and is it in their contracts with Asbury Partners? If they were not made aware of this and it is not in their contracts, what are the repercussions as I believe we cannot have contracts that violate state law on LTTEs. Finally, if the sub-developers were made aware and this language is in their contracts and we will be receiving this 12%, can you let me know who is responsible for the certified audits that will guarantee our position on these developments?    If you can share these concerns with our counsel and have them prepare a presentation for the upcoming workshop session, I would appreciate it.  Also, I would like to have copies of the three contracts that Asbury Partners has with the fast-track developers.  Would you be able to get me these?   As I mentioned above, if my research is correct, this is very good news for us.  Using the Wesley Lake development as an example, their net profits are projected at $77,990,482 (as per their pro forma for the project).  Based on their projected costs this number reflects a 27% net profit.  In this scenario, Kushner would get roughly $34 million and the City would get roughly $43 million.  If I am missing something in my analysis and/or the foundation upon which it based it is incorrect, please let me know.  I only hope I am correct as this type of profit windfall for the City would be amazing.       Peace,       James W. Keady Councilman, City of Asbury Park     Councilman Jim Keady 1 Municipal Plaza Asbury Park, NJ 07712 TEL: 732.502.5196 EM: [EMAIL PROTECTED] www.cityofasburypark.com     SPONSORED LINKS United state patent United state flag United state patent search Trademark united state United state quarters Asbury park nj YAHOO! GROUPS LINKS  Visit your group "AsburyPark" on the web.    To unsubscribe from this group, send an email to:  [EMAIL PROTECTED]    Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.