PATERSON – A Washington, DC-based group that operates charter schools has offered to spend $ 7.6 million to purchase the site of the long-dormant Leader Dye factory in Paterson’s 3rd Ward.
The group, Building Hope, was the first bidder for the city-owned land in a public auction that ended Wednesday afternoon, according to city officials.
The sale, if finalized, would provide Paterson’s budget with a one-time boon. But city officials have acknowledged that they may not benefit in the long run from annual property taxes, as the charter school will likely be tax exempt.
Nonetheless, Mayor Andre Sayegh saw cause for celebration in the auction result.
“Much like the armory and the Hinchliffe stadium, the Leader Dye site is another example of the emphasis my administration has placed on eliminating the plague in neighborhoods and replacing horrors with reasonable development,” said the mayor. “It’s a big win for our budget and a win for Paterson. We are in growth mode.
The winning bidder will be required to pay an additional 10% of the purchase price, or approximately $ 760,000, to the company that conducted the auction. The site also has contamination that, according to a city engineering report, would cost around $ 800,000 to clean up.
“This transformative sale will not only help the city financially, but it will also ensure that a long-abandoned site breathes new life into a neighborhood that deserves it,” said Michael Powell, director of economic development for Paterson.
Paterson’s most recent appraisal of the property had valued it at around $ 2.2 million. Two losing bidders in the auction – including Paterson’s most ubiquitous real estate investor, Charles Florio – expressed surprise that the two-acre site on Madison Avenue was so high.
Florio called the final price “crazy” and said he had stopped bidding at $ 3 million. “I just want to thank them because they just made all of my properties even more valuable,” said Florio.
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Representatives for Building Hope could not be reached for comment. City officials and charter school officials said the Building Hope group is linked to the Philip’s Academy charter school which currently operates on State Street in Paterson’s 6th Ward.
The two-day auction was scheduled to end at 11 a.m., but included a provision that would extend the auction by an additional two minutes for each new bid that hit the deadline. As a result, a series of more than 60 bids was entered after 11 a.m., pushing the auction to close until the afternoon.
Building Hope was auctioning back and forth with a Wyoming group called Grand Teton Development. The Wyoming group said it was also considering setting up an educational facility at the site or eventual housing.
Alex Mendez, the city councilor who represents the Paterson branch where the Leader Dye site is located, could not be reached for comment.
Joe Malinconico is editor of Paterson press. Email: [email protected]