Deposits and Costs Coincident to Acquisition of Land for Development |
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Deposits and Costs Coincident to Acquisition of Land for Development | 3- Deposits and Costs Coincident to Acquisition of Land for Development
Deposits and costs coincident to acquisition of land for development are summarized as follows:
Properties currently owned and in the development stage
Berkeley Terrace – Bayville, NJ – 70 approved townhome units
A contract was signed to acquire 70 approved townhome units in October 2019, after 31 months of discussion. This property was acquired in late June 2021. Site improvements will commence. Sales or rental revenues will accrete to 2023 income. The Company has secured a bridge loan and is awaiting a commitment with a permanent lender for an acquisition, development and construction finance facility.
The Company is preparing to begin infrastructure work on the property, and start a prelease program.
Lacey Township, New Jersey, “Dream Homes at the Pines”
Dream Homes is in contract and under development for a parcel which will yield 68 new townhomes in the Ocean County NJ area, of which 54 are market rate and 14 are affordable housing. The acquisition of the contract was made for common stock and occurred in the 4th quarter of 2016. This property is currently in the approval process. This development project is scheduled to begin in late 2022 and will accrete to 2023 sales.
All costs associated with this property necessary to obtain all approvals, acquire the land, install the infrastructure and prepare the property to commence construction are the Company’s responsibility.
In order to obtain all developmental approvals and be prepared to begin installing infrastructure, various permits and engineering work are required. These permits include but are not limited to township subdivision, county, municipal utility authority, CAFRA (NJ Department of Environmental Protection) and NJ Department of Transportation. To date, design engineering has been completed and a CAFRA application has been prepared and submitted to the environmental scientist, and the NJ DEP has issued the CAFRA permit. Application for this permit was made in April 2017. A Lacey Township Planning Board meeting was held on December 11, 2017. Additional information was requested from the board and the next meeting was heard for preliminary and final approval on April 19th of 2021. Preliminary approval was granted.
It is anticipated that complete development approvals will cost approximately $20,000 more to complete. In addition to these approval costs and acquisition costs, infrastructure costs are anticipated to cost approximately $1,000,000. The total amount of funding required to acquire and make this property ready for home construction is approximately $1,900,000.
The Company may need to seek loans from banks to finance this project. As part of their financing agreements, the banks typically require Vincent Simonelli to personally guarantee these loans. If Mr. Simonelli cannot qualify as a guarantor and there is no one other than him in the Corporation to provide those guarantees, the financing of the deal may be adversely affected. The exact amount of funding required for this particular property is not clear at the present time but will be determined when full approvals have been obtained and the Company is prepared to take title to the property.
The closing to acquire this property occurred on June 29, 2021 and the Company is currently in title.
Clayton NJ – 112 Apartments
On May 3, 2018, the Company submitted a signed letter of intent to purchase 5.5 acres of property in Gloucester County, which is currently being approved for a 112-unit apartment complex, with 8000 square feet of retail space. The Company has a signed contract and has been proceeding with development approvals. The property is designated as a redevelopment property, and a redevelopment agreement is currently being negotiated with the township. Progress has been delayed due to township closures due to the Covid-19 pandemic.
On February 26, 2021, the Company took title to the property via an assemblage of 3 parcels. The Company successfully obtained Redevelopment Approval from the Borough in July 2021 and Preliminary and Final Site Plan approval in December of 2021.
Louis Avenue – Bayville, NJ – In title
In October of 2018, the company entered into a contract to develop and acquire 17 townhouse lots in Bayville NJ. Engineering and approvals are currently in process. Application was made to the Planning Board on March 20, 2020. The project was deemed complete by the township engineer. Municipal scheduling has been delayed due to the Covid-19 virus.
The Company was heard before the Berkeley Township Planning Board on October 3, 2020 and the planning board awarded preliminary approvals for 17 townhome units.
Application is currently being made for final approvals, and the Company is scheduled to be heard at the May 2022 planning board meeting.
The Company acquired this property on August 4, 2021.
Properties Under Contract to Purchase and in the Approval Stage
Autumn Run – Gloucester County
On December 7, 2018, the Company signed a contract to purchase a property in Gloucester County, NJ, which will be approved for +/- 63 units of age-restricted manufactured housing. The property is currently in the approval stage. An application was made to the DEP for a wetlands letter of interpretation, which was approved as proposed. Further action before the planning board is pending due to delays caused by township closures due to Covid-19. The Company had a virtual workshop meeting on September 15, 2020 and an additional virtual meeting was conducted on November 17, 2020.
The application for a use variance was heard on May 24, 2021 and the variance was approved.
The Company is in the process of applying for preliminary and final site plan approval and should be heard at the May 2022 meeting.
Properties on hold due to delay in approvals, environmental concerns or other reasons
Berkeley Township, New Jersey, “Dream Homes at Tallwoods”, Contract
On March 1, 2017, the Company acquired from DHL rights to a contract to purchase over 7 acres of land in Berkeley Township, NJ (the “Tallwoods Contract or Dream Homes at Tallwoods”) for restricted shares of Company common stock (issued in April 2017).
Since the transaction had not occurred for at least a portion of the Property within 12 months of the completion of the Due Diligence Period, as well as two 6-month extensions, the seller chose to terminate the contract. The Company retained the right to waive any remaining development contingencies and proceed to close on the property.
Mortgages on Properties Held for Development:
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