Monthly Archives: January 2009

library

Deal done on library office space

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Though no sale price was disclosed, this GlobeSt.com report about rare office deals in the New Jersey confirmed the sale of the office space above the library. Weichert Commercial, which handled the sale, has been “hired to find tenants, with a focus on professional office users.” A person familiar with the deal suggested the deal was somewhere between $3 million and $4 million.

The buyer was not identified in that report, but another report in October had indicated the buyer was Newark-based Fieldstone Development Group.

The Redevelopment Agency remains partners in the condominium association of the property as the sale only includes the top two floors, about 41,000 square feet of office space.

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City Council, Rahway

Park to be named for native killed in Vietnam

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The park under construction on Essex Street will be named for Myron Ross, a Marine from Rahway who was killed in the Vietnam War.

Construction began in October and a dedication ceremony is expected later this year.

The City Council last month increased the bond ordinance for the park by $175,000, to $1.225 million, which includes $500,000 from a state Green Acres loan. City Administrator Peter Pelissier said the extra funds were the result of additional remediation needed at the site.

In 2002, the city dedicated Berzinec Park, which was named for William Berzinec, who also was killed in Vietnam. The site at Central and St. Georges avenues was home to the former public library until it was flooded by Tropical Storm Floyd in September 1999.

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Downtown, Parking, Rahway

No go on parking deck expansion

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Good news for some Sky View residents: They get to keep their view. The Parking Authority passed on the idea of adding two levels to the existing parking deck at Lewis and Main streets.

Executive Director Donald Andersen said commissioners had concerns about the cost effectiveness and shutting down a large portion of the garage during construction, as well as possibly Main and Lewis streets. Construction probably would have last four to five months in either case and two levels of the garage would be closed.

Adding one level would have cost $2.6 million and created another 85 spaces ($31,000 per) while two levels would have cost $4.8 million and added 170 spaces ($29,000 per). The existing six-story parking deck, which opened four years ago with 524 spaces, cost $11 million (which works out to about $21,000/space).

Commissioners discussed the “Vertical Expansion Feasibility Draft Report,” prepared by Tim Haahs & Associates of Blue Bell, Pa., at their November meeting.

Andersen said the parking study commissioned last summer will hopefully be completed by the end of March.

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The Savoy seeking financing

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Developers of The Savoy are trying to renegotiate a loan with Wachovia bank, City Administrator/Redevelopment Director Peter Pelissier reported at last week’s Redevelopment Agency meeting. Pelissier said he’s received messages from Glen Fishman, managing director of Hillside-based Dornoch Management, indicating the firm is still committed to completing the 36-unit condo project. Pelissier estimated Dornoch already has invested $3.5 million in the project.

Dornoch’s investors, a hedge fund based in Holland, apparently are looking for a lender before they make another capital call, Pelissier said, adding that a loan had been in place until it was called in to renegotiate by Wachovia. Charlotte, N.C.-based Wachovia was acquired by Wells Fargo last October after overtures from Citigroup. If Dornoch can’t get a loan, Pelissier said, The Savoy may become rentals but the firm is aiming to complete the project as the originally proposed condos.

Pelissier said Fishman wants to complete The Savoy as for-sale condos, before moving onto the firm’s other projects along East Cherry Street (the storefronts that include The Beverage Shop). Fishman has told city officials that he’s interested in selling the burned out East Cherry Street property which Dornoch purchased from the Parking Authority and as recently as November 2007 had plans to renovate it.

The Savoy’s retail space has been marketed by The Schultz Organization, a Woodbridge-based commercial real estate firm, as recently as December with a projected occupancy of “fourth quarter 2009.”

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Apartments, Downtown, Redevelopment Agency

Carriage City violating redevelopment agreement

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Apparently in violation of its redevelopment agreement, Carriage City Properties has been advised by the Redevelopment Agency that it needs approval before renting unsold units on its own in the 16-story building. The builder also has filed a tax appeal, which could be settled shortly.

Redevelopment Director and City Administrator Peter Pelissier reported at Wednesday night’s meeting that the redevelopment agreement would have to be renegotiated. Specifically, it would be modified to stipulate payment of the $10,000 redevelopment fee to the agency at the time the unit is occupied, instead of at closing.

Of the 209 units, about 48 units have closed and a total of 76 Temporary Certificates of Occupancy (TCO) have been issued, according to Pelissier. Several units can be found advertised as rental apartments on various Web sites but those are individual owners who purchased the units, which is allowed. Last month a Rahway Rising reader pointed out a craigslist ad that clearly indicates SkyView as the rental agent, which Pelissier said prompted a Jan. 5 letter from the agency’s attorney to Carriage City Properties.

Carriage City also has appealed its tax assessment of almost $60 million (equalized ratio of about $25 million), which this year will generate $1.2 million in property taxes. That issue may be settled at Monday’s City Council meeting, Pelissier said.

Units at SkyView at Carriage City Plaza so far have sold for an average of about $296,000, with a low of $225,000 and high of $444,000.

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Downtown, library

State of the City 2009

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Though I was unable to attend Monday’s City Council meeting, I did get a copy of Mayor James Kennedy’s State of the City address. The mayor is among a long list of officials looking for help from the feds.

“I retain optimism that this slowdown will only be temporary and the incoming administration of President-Elect Obama will provide long-overdue federal funds to invest in our roads, sewers, parks and other vital elements of our infrastructure,” Kennedy said. “Unlike other municipalities, Rahway has many projects that are already approved by the authorizing boards and agencies. Our improvements and investments will enhance our redevelopment opportunities. So that the ‘shovels can hit the ground’ as soon as the economy rebounds and our continuing redevelopment efforts will restart in a period of months instead of years,” he said.

Among the projects Kennedy cited as “ready to begin” are the 88-unit Renaissance at Rahway and 116-unit Station Place. The Savoy, he said, will “restart construction when additional financing is obtained.” (Photo at left)

As for other redevelopment-related highlights in his remarks, the mayor reviewed the various ongoing projects that you’ve read about here before:

— New ratables increased the tax base by $30 million for the nine-month period in 2008. A full year on the books is expected to create $42 million in 2009. A little perspective: ratables increased by about $30,000,000; the city’s total valuation is about $1,500,000,000 ($1.5 billion). The added ratables — mainly attributed to Carriage City Plaza, Luciano’s and Riverwalk — generated about $900,000 in additional tax revenues for the city.

— In addition to the planned 1,000-seat amphitheater at the former Hamilton Laundry site, and development of the former Bell Telephone building into a performing arts space and black box theatre, the former Elizabethtown Gas building is expected to be purchased and house a “first-rate art school as well as a co-op gallery venue.”

— “The 40,000 square feet of condominium space above the library was sold last year, and will be converted into office space sometime this year.” The library opened in 2004 with the idea of eventually selling the top two floors for office space. No word on whether the sale netted the $3.5 million that was expected at the time to help offset the cost of the $7.4-million facility. [UPDATE: SDI Technologies already paid $3.2 million to the city for this project, according to City Administrator Peter Pelissier.]

— The city is “exploring a partnership with the Parking Authority to construct a 300- to 500-space parking deck on Lot B, to complement the proposed Westbury housing/retail development next door.” We wrote about this study in August but there was never any mention of the number of spaces. Originally, The Westbury was planned with a five-story, 324-space parking facility.

For some historical perspective, there are a few paragraphs about the mayor’s 2005 State of the City address here.

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Uncategorized

Welcome back, Poll

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We took a peek at the top posts of 2008 by number of page views over the weekend. Tonight we’re bringing back the poll after a months-long absence and letting you vote: What was the biggest story of 2008 on the blog? Obviously, the decline in the housing market and the collapse of the economy in general had an effect locally, but what was the most significant development locally?

* The opening of Carriage City Plaza/Hotel Indigo
* Work at The Savoy coming to a halt
* Tabulation of the Rahway Survey
* The reopening of the Union County Arts Center
* The slow pace of redevelopment in general
* The fast pace of redevelopment in general
* Other

There’s always that “Other” category, so feel free to explain what that might be to you.

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HoJo likely to replace Kings Inn

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The Kings Inn motel likely will become a Howard Johnson, not a Super 8, with renovations to begin in February at the earliest and last six months. Both are brands of Wyndham Hotels and developers currently are in negotiations but expect HoJo might have more recognition in this area.

Several residents of the adjacent Riverwalk townhouse development appeared before the Planning Board last Tuesday night to question the application and remedy concerns about illicit activity at the site.

Principals of Ratan Rahway, the developer, promised that the new hotel will not accept Section 8 (welfare) housing, as is the case with the Kings Inn. As a franchise, the hotel would be expected twice a year to continue to operate under one of the Wyndham brands.

Plans are to renovate the existing rooms, along with turning the tower in a two-story structure. They expect to invest $800,000 to $900,000 in renovations. While the original two-story structure will not be razed, developers said they plan to have a new facade, roof and all new furniture and amenities in each room, along with eliminating the existing floor-to-ceiling windows, which was a concern for some residents. New fencing also will be erected between the hotel site and adjacent townhouse development.

The property (1360 Route 1/Block 304, Lots 5-6) last changed hands in 2004, when it was purchased for about $1.1 million from LTL Hotel Corp. by The Rahway Tower, LLC, according to PropertyShark.com.

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