Commitments And Contingencies |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Commitments And Contingencies [Line Items] | |
| Commitments And Contingencies | 13. COMMITMENTS AND CONTINGENCIES TAX ABATEMENT AGREEMENTS Pursuant to agreements with certain municipalities, the Company is required to make payments in lieu of property taxes (“PILOT”) on certain of its properties and has tax abatement agreements on other properties, as follows: Pilot Payments PILOT 2021 2020 2019Property NameLocationAsset TypeExpiration Dates (Dollars in Thousands)Port Imperial South 1/3 Garage (a)Weehawken, NJParking Garage12/2020$ -$ 303$ 289BLVD 475 (Monaco) (b)Jersey City, NJMultifamily2/2021 443 1,811 2,149111 River Street Hoboken, NJOffice4/2022 1,470 1,470 1,406Harborside Plaza 4A (c)Jersey City, NJOffice2/2022 1,057 1,062 1,080Harborside Plaza 5 (d)Jersey City, NJOffice6/2022 4,324 4,415 4,352BLVD 401 (Marbella 2) (e)Jersey City, NJMultifamily4/2026 1,277 1,151 1,394RiverHouse 11 at Port Imperial (f)Weehawken, NJMultifamily7/2033 1,369 1,143 1,030Port Imperial 4/5 Hotel (g)Weehawken, NJHotel12/2033 2,925 2,161 2,214RiverHouse 9 at Port Imperial (h)Weehawken, NJMultifamily6/2046 350 - -Haus 25 (i)Jersey City, NJMixed-Use(i) - - -Park Apartments at Port Imperial (j)Weehawken, NJMultifamily(j) - - -Total Pilot taxes $ 13,215$ 13,516$ 13,914 (a)Taxes to be paid at 100 percent on the land value of the project only over five year period and allows for a phase in of real estate taxes on the building improvement value at zero percent in year one and 95 percent in years two through five.(b) The annual PILOT is equal to ten percent of Gross Revenues, as defined.(c)The annual PILOT is equal to two percent of Total Project Costs, as defined. The total Project Costs are $49.5 million.(d)The annual PILOT is equal to two percent of Total Project Costs, as defined. The total Project Costs are $170.9 million.(e)The annual PILOT is equal to ten percent of Gross Revenues for years 1-4, 12 percent for years 5-8 and 14 percent for years 9-10, as defined.(f)The annual PILOT is equal to 12 percent of Gross Revenues for years 1-5, 13 percent for years 6-10 and 14 percent for years 11-15, as defined.(g)The annual PILOT is equal to two percent of Total Project Costs, as defined.(h)The annual PILOT is equal to 11 percent of Gross Revenues for years 1-10, 12.5 percent for years 11-18 and 14 percent for years 19-25, as defined.(i)For a term of 25 years following substantial completion, which is anticipated to occur in the second quarter of 2022. The annual PILOT is equal to seven percent of Gross Revenues, as defined.(j)For a term of 25 years following substantial completion. The annual PILOT is equal to 11 percent of Gross Revenues for years 1-10, 12.5 percent for years 11-18 and 14 percent for years 19-25, as defined. At the conclusion of the above-referenced agreements, it is expected that the properties will be assessed by the municipality and be subject to real estate taxes at the then prevailing rates. LITIGATION The Company is a defendant in litigation arising in the normal course of its business activities. Management does not believe that the ultimate resolution of these matters will have a materially adverse effect upon the Company’s financial condition taken as whole. GROUND LEASE AGREEMENTS Future minimum rental payments under the terms of all non-cancelable ground leases under which the Company is the lessee, as of December 31, 2021, are as follows (dollars in thousands): As of December 31, 2021Year Amount (a)2022$ 1,6952023 1,7022024 1,7212025 1,7282026 1,7282027 through 2101 151,253Total lease payments 159,827Less: imputed interest (136,141) Total$ 23,686 (a)The Company completed the disposition of 111 River in January 2022. This disposition will reduce the total future lease payments by $127.0 million. As of December 31, 2020Year Amount2021$ 1,7502022 1,7502023 1,7562024 1,7762025 1,7422026 through 2101 152,980Total lease payments 161,754Less: imputed interest (138,152) Total$ 23,602 Ground lease expense incurred by the Company during the years ended December 31, 2021, 2020 and 2019 amounted to $1.8 million, $1.6 million and $2.6 million, respectively. In conjunction with the adoption of ASU 2016-02 (Topic 842), starting on January 1, 2019, the Company capitalized operating leases, which had a balance of $22.3 million at December 31, 2021 for three ground leases. Such amount represents the net present value (“NPV”) of future payments detailed above. The incremental borrowing rates used to arrive at the NPV ranged from 7.58 percent to 7.62 percent for the remaining ground lease terms ranging from 80.83 years to 82.58 years. These rates were arrived at by adjusting the fixed rates of the Company’s mortgage debt with debt having terms approximating the remaining lease term of the Company’s ground leases and calculating notional rates for fully-collateralized loans. CONSTRUCTION PROJECTS The Company is developing a 750-unit multifamily project at 25 Christopher Columbus, also known as Haus 25, in Jersey City, New Jersey, which began construction in the first quarter of 2019. The construction project, which is estimated to cost $469.5 million, of which $425 million has been incurred through December 31, 2021, is expected to be ready for occupancy in the second quarter of 2022. The Company has funded $169.5 million of the construction costs, and the remaining construction costs are expected to be funded from a $300 million construction loan (of which $255.5 million was drawn as of December 31, 2021). OTHER Certain Company properties acquired by contribution from unrelated common unitholders of the Operating Partnership, were subject to restrictions on disposition, except in a manner which did not result in recognition of built-in-gain allocable to such unitholders or which reimbursed the unitholders for the tax consequences thereof (collectively, the “Property Lock-Ups”). While these Property Lock-Ups have expired, the Company is generally required to use commercially reasonable efforts to prevent any disposition of the subject properties from resulting in the recognition of built-in gain to these unitholders, which include members of the Mack Group (which includes William L. Mack, a former director and David S. Mack, a former director). As of December 31, 2021, taking into account tax-free exchanges on the originally contributed properties, either wholly or partially, over time, five of the Company’s properties, as well as certain land and development projects, with an aggregate carrying value of approximately $1.0 billion, are subject to these conditions. As of December 31, 2021, the Company has outstanding stay-on award agreements with 35 select employees, which provides them with the potential to receive compensation, in cash or Company stock at the employees’ option, contingent upon remaining with the Company in good standing until the occurrence of certain corporate transactions, which have not been identified. The total potential cost of such awards is currently estimated to be up to approximately $5.2 million, including the potential future issuance of up to 82,629 shares of the Company’s common stock. Such cash or stock awards would only be earned and payable if such transaction was identified and communicated to the employee within seven years of the agreement dates, which all occurred in late 2020 and early 2021, and all other conditions were satisfied. In September 2020, the General Partner's Board of Directors approved a discretionary reimbursement of approximately $6.1 million in fees and expenses incurred by Bow Street LLC in connection with its proxy solicitations in 2019 and 2020 that resulted in the election of Bow Street's nominees as directors of the General Partner at the 2019 and 2020 annual meetings of stockholders of the General Partner. The Board of Directors determined that the reimbursement was appropriate in light of the benefit to the General Partner and its stockholders of the refreshment of the Board of Directors that resulted from the proxy contests. The Company reimbursed this amount to Bow Street in three substantially equal payments in November 2020, January 2021 and April 2021. The Company recorded the full $6.1 million as general and administrative expense in the year ended December 31, 2020 when the obligation was committed to. Bow Street is an affiliate of A. Akiva Katz, a director of the General Partner, who is a co-founder and managing partner of Bow Street. |
| VERIS RESIDENTIAL, L.P. [Member] | |
| Commitments And Contingencies [Line Items] | |
| Commitments And Contingencies | 13. COMMITMENTS AND CONTINGENCIES TAX ABATEMENT AGREEMENTS Pursuant to agreements with certain municipalities, the Company is required to make payments in lieu of property taxes (“PILOT”) on certain of its properties and has tax abatement agreements on other properties, as follows: Pilot Payments PILOT 2021 2020 2019Property NameLocationAsset TypeExpiration Dates (Dollars in Thousands)Port Imperial South 1/3 Garage (a)Weehawken, NJParking Garage12/2020$ -$ 303$ 289BLVD 475 (Monaco) (b)Jersey City, NJMultifamily2/2021 443 1,811 2,149111 River Street Hoboken, NJOffice4/2022 1,470 1,470 1,406Harborside Plaza 4A (c)Jersey City, NJOffice2/2022 1,057 1,062 1,080Harborside Plaza 5 (d)Jersey City, NJOffice6/2022 4,324 4,415 4,352BLVD 401 (Marbella 2) (e)Jersey City, NJMultifamily4/2026 1,277 1,151 1,394RiverHouse 11 at Port Imperial (f)Weehawken, NJMultifamily7/2033 1,369 1,143 1,030Port Imperial 4/5 Hotel (g)Weehawken, NJHotel12/2033 2,925 2,161 2,214RiverHouse 9 at Port Imperial (h)Weehawken, NJMultifamily6/2046 350 - -Haus 25 (i)Jersey City, NJMixed-Use(i) - - -Park Apartments at Port Imperial (j)Weehawken, NJMultifamily(j) - - -Total Pilot taxes $ 13,215$ 13,516$ 13,914 (a)Taxes to be paid at 100 percent on the land value of the project only over five year period and allows for a phase in of real estate taxes on the building improvement value at zero percent in year one and 95 percent in years two through five.(b) The annual PILOT is equal to ten percent of Gross Revenues, as defined.(c)The annual PILOT is equal to two percent of Total Project Costs, as defined. The total Project Costs are $49.5 million.(d)The annual PILOT is equal to two percent of Total Project Costs, as defined. The total Project Costs are $170.9 million.(e)The annual PILOT is equal to ten percent of Gross Revenues for years 1-4, 12 percent for years 5-8 and 14 percent for years 9-10, as defined.(f)The annual PILOT is equal to 12 percent of Gross Revenues for years 1-5, 13 percent for years 6-10 and 14 percent for years 11-15, as defined.(g)The annual PILOT is equal to two percent of Total Project Costs, as defined.(h)The annual PILOT is equal to 11 percent of Gross Revenues for years 1-10, 12.5 percent for years 11-18 and 14 percent for years 19-25, as defined.(i)For a term of 25 years following substantial completion, which is anticipated to occur in the second quarter of 2022. The annual PILOT is equal to seven percent of Gross Revenues, as defined.(j)For a term of 25 years following substantial completion. The annual PILOT is equal to 11 percent of Gross Revenues for years 1-10, 12.5 percent for years 11-18 and 14 percent for years 19-25, as defined. At the conclusion of the above-referenced agreements, it is expected that the properties will be assessed by the municipality and be subject to real estate taxes at the then prevailing rates. LITIGATION The Company is a defendant in litigation arising in the normal course of its business activities. Management does not believe that the ultimate resolution of these matters will have a materially adverse effect upon the Company’s financial condition taken as whole. GROUND LEASE AGREEMENTS Future minimum rental payments under the terms of all non-cancelable ground leases under which the Company is the lessee, as of December 31, 2021, are as follows (dollars in thousands): As of December 31, 2021Year Amount (a)2022$ 1,6952023 1,7022024 1,7212025 1,7282026 1,7282027 through 2101 151,253Total lease payments 159,827Less: imputed interest (136,141) Total$ 23,686 (a)The Company completed the disposition of 111 River in January 2022. This disposition will reduce the total future lease payments by $127.0 million. As of December 31, 2020Year Amount2021$ 1,7502022 1,7502023 1,7562024 1,7762025 1,7422026 through 2101 152,980Total lease payments 161,754Less: imputed interest (138,152) Total$ 23,602 Ground lease expense incurred by the Company during the years ended December 31, 2021, 2020 and 2019 amounted to $1.8 million, $1.6 million and $2.6 million, respectively. In conjunction with the adoption of ASU 2016-02 (Topic 842), starting on January 1, 2019, the Company capitalized operating leases, which had a balance of $22.3 million at December 31, 2021 for three ground leases. Such amount represents the net present value (“NPV”) of future payments detailed above. The incremental borrowing rates used to arrive at the NPV ranged from 7.58 percent to 7.62 percent for the remaining ground lease terms ranging from 80.83 years to 82.58 years. These rates were arrived at by adjusting the fixed rates of the Company’s mortgage debt with debt having terms approximating the remaining lease term of the Company’s ground leases and calculating notional rates for fully-collateralized loans. CONSTRUCTION PROJECTS The Company is developing a 750-unit multifamily project at 25 Christopher Columbus, also known as Haus 25, in Jersey City, New Jersey, which began construction in the first quarter of 2019. The construction project, which is estimated to cost $469.5 million, of which $425 million has been incurred through December 31, 2021, is expected to be ready for occupancy in the second quarter of 2022. The Company has funded $169.5 million of the construction costs, and the remaining construction costs are expected to be funded from a $300 million construction loan (of which $255.5 million was drawn as of December 31, 2021). OTHER Certain Company properties acquired by contribution from unrelated common unitholders of the Operating Partnership, were subject to restrictions on disposition, except in a manner which did not result in recognition of built-in-gain allocable to such unitholders or which reimbursed the unitholders for the tax consequences thereof (collectively, the “Property Lock-Ups”). While these Property Lock-Ups have expired, the Company is generally required to use commercially reasonable efforts to prevent any disposition of the subject properties from resulting in the recognition of built-in gain to these unitholders, which include members of the Mack Group (which includes William L. Mack, a former director and David S. Mack, a former director). As of December 31, 2021, taking into account tax-free exchanges on the originally contributed properties, either wholly or partially, over time, five of the Company’s properties, as well as certain land and development projects, with an aggregate carrying value of approximately $1.0 billion, are subject to these conditions. As of December 31, 2021, the Company has outstanding stay-on award agreements with 35 select employees, which provides them with the potential to receive compensation, in cash or Company stock at the employees’ option, contingent upon remaining with the Company in good standing until the occurrence of certain corporate transactions, which have not been identified. The total potential cost of such awards is currently estimated to be up to approximately $5.2 million, including the potential future issuance of up to 82,629 shares of the Company’s common stock. Such cash or stock awards would only be earned and payable if such transaction was identified and communicated to the employee within seven years of the agreement dates, which all occurred in late 2020 and early 2021, and all other conditions were satisfied. In September 2020, the General Partner's Board of Directors approved a discretionary reimbursement of approximately $6.1 million in fees and expenses incurred by Bow Street LLC in connection with its proxy solicitations in 2019 and 2020 that resulted in the election of Bow Street's nominees as directors of the General Partner at the 2019 and 2020 annual meetings of stockholders of the General Partner. The Board of Directors determined that the reimbursement was appropriate in light of the benefit to the General Partner and its stockholders of the refreshment of the Board of Directors that resulted from the proxy contests. The Company reimbursed this amount to Bow Street in three substantially equal payments in November 2020, January 2021 and April 2021. The Company recorded the full $6.1 million as general and administrative expense in the year ended December 31, 2020 when the obligation was committed to. Bow Street is an affiliate of A. Akiva Katz, a director of the General Partner, who is a co-founder and managing partner of Bow Street. |