A redevelopment agreement approved last month in March requires the Redevelopment Agency to close on the million-dollar acquisition of the Elizabethtown Gas building by September for a proposed affordable housing project for artists. Commissioners approved the agreement at their March 5 meeting (Resolution 16-14).

The two-story building at 219 Central Ave. (map) (Block 167, Lot 1) has been under contract by the Redevelopment Agency since an agreement was reached in December for $1 million, with $400,000 in escrow for remediation.  Developers have proposed the 71-unit Rahway Residences for the Arts, an affordable housing complex for those working in the field of arts and entertainment. The 6,500-square-foot facility would be renovated and expanded.

Under terms of the agreement, the Redevelopment Agency would acquire the approximately 1-acre property from AGL Resources, the parent company of Elizabethtown Gas, for $731,000 and sell it to Ingerman Development Corp. for $956,000. Conveyances of the property are expected simultaneously, according to Redevelopment Agency attorney Frank Regan. The difference of $225,000 will be the agency’s contribution as a local match for a tax credit at closing.

The agency will use $600,000 in HOME funds through Union County toward the acquisition, with $131,000 as a loan from Ingerman. At closing of the sale, Ingerman will pay the agency $356,000 cash, part of which will pay off the $131,000 loan, while the redeveloper will assume the $600,000 mortgage, and the $225,000 retained by the agency as a local match. Ingerman will receive a subordinated mortgage, expected to be paid off over 30 years. “Essentially, the Redevelopment Agency will expend no monies for the deal,” Regan said.

The 73-page redevelopment agreement can be found in its entirety here. The redevelopment team includes TRF Development Partners, a nonprofit support organization of The Reinvestment Fund, Newark-based Crawford Street Partners, Ingerman Development Corp. in Cherry Hill.

Construction of the $17-million facility will be funded via tax credit financing from the New Jersey Housing and Mortgage Finance Agency (NJHMFA), of which the developer is waiting for approval.

The project’s schedule is dependent on the closing date and government approvals. The agreement stipulates that construction begin within two months of the closing date, with completion slated within 18 months of the start of construction. No word on when the project will come before the Planning Board.

Preference for the 71 housing units will be given to people who work in the field of arts and entertainment, with affordable housing requirements of 50 to 60 percent of the county’s median household income. Fifty percent of the estimated median household income in Union County would be about $34,344, according to Census figures.