Wildwood Calls for NJSEA Payment

WILDWOOD – The City of Wildwood has drawn a proverbial line in the sand regarding the 260,000 square foot Wildwoods Convention Center, which sits atop a parcel of prime, beachfront real estate.
Commissioner Pete Byron announced the City has sent a Notice of Breach as well as a Demand for Payment Notice to the Treasurer of the State of New Jersey as well as the New Jersey Sports and Exposition Authority (NJSEA) calling for payment of more than $2.4 million owed to it by a bond obligation as well as four years’ past due Payment in Lieu of Taxes (PILOT) money.
Byron said a Contract for Sale and an Omnibus Agreement was executed in 1996 between the City of Wildwood and NJSEA regarding the construction of the Convention Center. “The City had bonded approximately $3.4 million to help offset certain costs, with the promise of payment of interest and revenue bonds, which were created,” said Byron. According to the Commissioner, for the past 10 years the City has not received any payments from the NJSEA or the State of New Jersey regarding the bond obligation. Byron added the NJSEA and the state are also four years in arrears of paying the Convention Center’s annual PILOT payment of $30,000 per year.
“The City has been more than patient with regard to these payments,” Byron stated. According to the agreement set between the City and NJSEA, the Convention Center’s financial obligations are paid in the following order: Payment of operating expenses; funding of any working capital reserve and maintenance fund; payment of PILOT expense; payment of principal and interest on the revenue bonds; and payments determined by the NJSEA with the consent of the Treasurer. The agreement also calls for the State of New Jersey to satisfy any shortfalls if the Convention Center is unable to meet its financial obligation.
In 2011 the Convention Center operated at a deficit of $216,895 after all operating costs and capital expenditures were paid, leaving no money to pay its PILOT payment, principal or interest.
To date, no money has been received from the NJSEA or the state, said Byron. “The state has refused to make good on certain payments that they’re obligated to make because they say they don’t have money but somehow they’ve come up with the
approximately $20 million it’s going to cost for these special elections,” said Byron referring to the Aug. 13 special primary and October special election to find a successor to the U.S. Senate seat left vacant by the June 3 death of Senator Frank Lautenberg.
“It’s like pouring salt into an open wound,” said the Commissioner. “At this point, the City feels that fair is fair and we’re tired of the taxpayers supporting these bonds which had already been agreed to be paid by the state.”