$28M Bridge Loan Keeps Aurora on Track

CLIFFSIDE PARK, NJ-The developers of Aurora Over the Hudson can continue to market and sell the 11-story, two-tower, 131-unit condo project overlooking the Hudson River now that a $27.5-million bridge loan is in place. Aurora Development Partners, a joint venture of the Pinnacle Cos. of Chatham, headed by Brian Stolar, and the Alan Litt-led Kohl Partners of Teaneck, began site work for the 3.3-acre project in August 2007.

But an original investment group recalled its loan a half-year ahead of schedule, citing “internal policy changes.” To date, 22 of the seven-figure units had been presold, but the investor’s pull-out and lack of replacement funding would have required the developers to inform buyers and halt additional sales commitments, the partners say.

The new bridge funding to get Aurora back on track is coming from 24 Capital, a Hackensack-based firm. Terms of the financing were not released. And it comes for a project that in construction terms hasn’t advanced beyond demolition of existing buildings and site work.

“We needed interim funding while we complete our pre-sales,” Stolar says. “And with more than $40 million in sales already, this funding will give us the capital to complete our additional sales required for a construction loan.”

The bridge loan is expected to keep the project’s units on schedule for a 2010 delivery. “The site is located in the state’s most desirable area, where despite the general slowing of the market, the pace of sales is strong,” says 24 Capital’s president Gregg Wolfer. “There is a ready market for Aurora. For this loan, the collateral’s ‘as is’ market value easily supports that loan. Considering the proximity to New York City and corporate centers in the region, and that Aurora has already contracted with future residents, the prospects are excellent.

“We felt that the risk was definitely worth taking,” Wolfer says. “It’s unfortunate that the current lending climate is increasingly forcing reputable developers and other borrowers to face scenarios where investors abruptly cut off promised funds, or where traditional lenders refuse to buy into projects with strong collateral, especially over the past year. In this case, Pinnacle has been building residential communities for more than 20 years, and Kohl Partners has built numerous projects for themselves and others.”