The City Council will vote Monday on a $750,000 bond ordinance that would serve as a bridge loan for the acquisition of the former Elizabethtown Gas Building on Central Avenue (map).

The ordinance (O-26-14) would provide the Redevelopment Agency with a $750,000 loan for the acquisition of the two-story building (Block 167, Lot 1) that has been planned as the Rahway Residences for the Arts, a 71-unit affordable housing complex for people employed in arts and entertainment. Added to the July 14 council agenda, the ordinance will come up for final adoption and a public hearing at Monday night’s meeting.

The Redevelopment Agency will buy the 1-acre property for $731,000 and sell it to Cherry Hill-based Ingerman Development Corp. for $956,000. More details on the acquisition can be found in this earlier post about the redevelopment agreement.

The loan agreement will provide a mortgage to the city and the $731,000 necessary to close while the developer will pay the agency back at closing, then the agency will in turn pay back the city. Redevelopment Agency Attorney Frank Regan said the closing is anticipated by the first week of September.

Redevelopment Director Peter Pelissier said at last night’s Redevelopment Agency meeting that the project “will not be ready to be in the ground” until spring 2015.

The redevelopment agreement requires the agency to close on the acquisition by September, which is also when the New Jersey Housing and Mortgage Finance Agency (NJHMFA) is expected to release its Qualified Allocation Plan (QAP)  plans for tax credits. Construction of the $17-million project will be funded with the tax credit financing.