CNBNEWS.NET Note:The first part of this two part series examines the sometime rocky relationship between the City of Gloucester City and Holt Logistics. In 1984 Holt borrowed $5.6 million from the Urban Development Action Grant program to be used for the expansion of its terminal. Those two UDAG’s generated a total of $21.8 million for the City to use on various ventures. The first part also gives a peek at how those funds were spent. The second part of the series will analize the lease arrangement made between the City and Holt for the former Coast Guard building at King Street and the Delaware River. How did Holt end up on the site that was once called the "Jewel" of the City's future waterfront development? Since 1996 Holt has used the building for their corporate headquarters.
By Bill Cleary
(CNBNEWS.NET)Last month Holt Logistics, a shipping company located in Gloucester City NJ made its final payment on the Urban Development Action Grant (UDAG) monies it borrowed in the 1980‘s. The funds, issued by HUD, were used to construct the Gloucester Marine Terminal, King and Essex Streets. In January 1984 Tom Holt’s companies borrowed $3.6 million through the program and in August of that year obtained another loan of $2 million.
In 1984 Holt used some of the UDAG monies to purchase two cranes that were built in Germany and floated across the ocean up the Delaware River to Gloucester City on barges pulled by a tugboat. photo by Bill "Worm" Seddon
Leo Holt, president of the company said on June 13, “Today's final payment represents the end of a program that garnered nearly $6 million in grant and interest payments of almost $7 million. The UDAG program provides a fund for the community to use to invest in small business and growth opportunities.”
In 1981 Holt Warehousing and Hauling was fined $30,000 by the US District Court for not getting the necessary permits to fill in the wetlands along Newton Creek near Collings Road under the Walt Whitman Bridge. Earlier that year the City exchanged the ownership of this property with Holt in return for the property the company owned at King and Ellis Streets, flanked on either side by Monmouth and Hudson Sts. photo by Tom Casey Jr.
Many residents were against the UDAG when it was first introduced in the 80’s as they felt the expansion of the Holt Marine Terminal would hinder the development of the City’s waterfront. At that time the City was looking to develop the waterfront for housing, restaurants, marinas and recreation. Opponents were particularly afraid that Holt would encompass the City’s entire waterfront expanding the terminal south to the end of Water Street where it ends. After many meetings an agreement was reached between the City and Holt to proceed with the UDAG application (s). One part of the agreement included a promise that Holt would not extend its terminal any further than the foot of Monmouth Street.
Some residents were fearful that Holt was going to expand the marine terminal further south towards the end of Water Street. They looked at acts like this one and the dumping of fill on the Newton Creek wetlands as proof that the company wanted to use all the City's waterfront for their terminal. photo by Tom Casey Jr.
Former Mayor Robert Gorman was asked his opinion on the UDAG program. “I think the UDAG program was great for both Gloucester City and Holt. Simply put how can you go wrong with the Federal government lending monies to a company with a stipulation that the monies need to be repaid not to the Federal government but to the City in which the company is located along with interest. Holt was able to utilize the monies for infrastructure improvements that have allowed the company to evolve into one of the most major port operations in the entire country. Holt continues to be Gloucester City's largest employer as well as the largest taxpayer.
Continuing Gorman said, “Gloucester City was able to use the monies received from the UDAG payments for numerous economic programs including but not limited to a revolving loan program. I think an overall listing of how these monies were spent as well as how much money is remaining for future projects would help everyone understand the overall impact of the UDAG funds.
“Projects that I remember specifically include but are not limited to the following:
- Conversion of dilapidated RR station owned by Gloucester City to a viable privately owned restaurant.
- Renovation of old Cloud Lodge to Oh! Harrah's Restaurant Pub.
- Conversion of vacant dilapidated buildings next to Oh! Harrah's into intended owner occupied storefronts.
- Rehab of Mill Houses.
- Historical rehab of vacant Max's Restaurant into a thriving restaurant/pub.
- Gloucester Plumbing expansion.
- Various street improvements
- Down payments for numerous capital improvement projects."
For a financial picture of the UDAG program a request was made to Frank Robertson, chief financial officer for the City. The UDAG expense printout from Robinson begins in 1995 and ends on June 28, 2011. According to the document over the last 16 years those two UDAG’s generated a total of $21.8 million for the City to use on various ventures.
For example 49 local business borrowed $9.6 million from the Economic Development Loan Program and 17 businesses borrowed $220,000 for facade improvements. Most recently Orens Brothers, the developer of the Chatham Square Apartment borrowed $1.1 million to use towards construction of Meadowbrook Mews townhouses. The total amount of all those loans is $10.9 million. Included in that figure is a $5 million loan that was made in 1996 to Holt who renegotiated the payback schedule on the two UDAG’s.
The City was able to use monies from the UDAG for demolition of abandon properties and infrastructure work. For instance $528,521 was spent on the demolition of the Vanguard Vinyl building. A total of $689,611 was used for improvement to City Hall; $259,297 went to the purchase and insurance of the Schooner “Northwind”; $1.8 million went towards purchase and rehab of vacant homes; $1.3 million was spent on infrastructure improvements to 8 city streets.
UDAG funds totaling $3.6 million was spent on Professional Services related to Urban Development, of which $1.4 million was for legal fees and $2.2 million for engineering; grant consulting; planning.
How much money is left in the UDAG account? Chief Financial Officer Robertson said, “As of May 31, 2011 there was $2,349,122. The June report has not been prepared yet, but it shouldn't change by much.This is available for urban development purposes, including loans to businesses.”
Below is the complete breakdown of the account prepared by Robertson. To enlarge click on the document.