A Jersey Shore-based developer is apparently interested in acquiring the stalled Savoy project on Main Street.
Continue reading Shore-based developer interested in The Savoy
Tag Archives: Dornoch
Dirt makes way for more parking near Lot B
Temporary sidewalks have been constructed along The Savoy site in recent weeks. The site has stockpiled some of the dirt from across the street adjacent to Lot B where additional surface parking is planned this summer.
City moves to demolish E. Cherry St. building
The city has notified Dornoch that it will proceed legally to knock down the burned out building at 65 E. Cherry St.
City Administrator and Redevelopment Director Peter Pelissier last fall asked the city engineer and city construction official to investigate whether the building was structurally sound or should be razed.
Dornoch presented plans to develop the property in November 2007, adding a third floor with residential units on the second and third floors and ground-floor retail. The building housed a former wig and beauty supply store on the first floor before a fire destroyed it in summer of 2005.
Other developers presented with Savoy project
Mayor James Kennedy is working with the bank and Dornoch about a possible purchase of the Main Street property, Pelissier said during a Redevelopment Agency meeting earlier this month. While it may not look like anything is going on at the site, he added, they’re “aggressively working with developers to move forward.”
The city plans to repair the sidewalk and move the fence back along the Main Street frontage of The Savoy, according to Pelissier. Whoever ends up doing the project will reimburse the city for the sidewalk work, he added.
Homes By Maplewood apparently has an updated Web site which no longer now lists The Savoy as “Coming Soon” but no longer The Lofts as it once did on our Local Links to the right, the leased apartments at the corner of Irving and East Cherry streets. It still mentions P&F Management’s “urban division is currently developing residential communities,” in among other places, Rahway.
City moves to buy Beverage Shop building
The City Council last week introduced an ordinance to purchase the vacant Beverage Shop building from the Rahway Center Partnership (RCP) after Dornoch defaulted on its agreement to acquire it. A public hearing and final approval is scheduled at the council’s regular meeting on March 8.
The Partnership bought the one-story structure at 52 E. Cherry St., (Block 318, Lot 18) in April 2001 for $130,000, and had an agreement in July 2006 to sell it to Dornoch. The property was to be part of the developer’s downtown plans and RCP, as I understand it, acquired it at the time as a way to control problem properties/tenants, with the intention of it becoming part of the larger plan. In late 2007, Dornoch presented plans to the Planning Board to knock down several East Cherry Stre
et properties — including The Beverage Shop — and build a new four-story structure as part of what’s sometimes referred to as Dornoch II 1/2.
Dornoch, which also planned two other projects that have since stalled — The Savoy and The Westbury — has defaulted on its agreement and payments of almost $8,000 to RCP. Annual property taxes on the building are more than $6,700, according to property records, which haven’t been paid for the last two quarters, according to City Administrator and Redevelopment Director Peter Pelissier.
The City Council also approved a contract with Prime Appraisal to appraise the property and the ordinance opens the door for negotiations. The building has been vacant for a few years and its condition is unclear, Pelissier said. The city plans to assume the agreement with Dornoch, put a lien on the property and likely list it for sale.
In addition to Dornoch defaulting on its agreement, the Partnership lost funding from Merck and NJ Transit and faces some major structural changes in its future which will be detailed in the next post.
‘The Smoldering Hedge Fund’ and Rahway
A fellow local blogger in Plainfield alerted me to a Fortune magazine story from several weeks ago. “The Smoldering Hedge Fund”, a three-month-long investigative story details the troubles of Greenwich, Conn.-based Plainfield Asset Management. What’s this got to do with Rahway?
P & F Management was founded in 2005 as a joint venture of Plainfield Asset Management (PAM) and Glen Fishman of Lakewood-based Fishman Real Estate Enterprises. Fishman is managing partner with Dornoch Holdings, which is owned and operated by P & F Management. Dornoch had multiple projects in the works — The Savoy (photo below), The Westbury — and bought up sever
al other properties downtown for millions at the height of the real estate boom in 2006 with plans for redevelopment. Dornoch also has a project in Plainfield.
Plainfield Asset Management once managed $5 billion but today oversees $3.3 billion, according to Fortune, and “has faced a wave of withdrawal requests, which it contained only by invoking a contract clause and refusing to let investors withdraw money.” Of the $3.3 billion, $2.7 billion represents money from investors who weren’t permitted to leave, and won’t until 2012. As the Fortune story puts it, only $560 million managed by PAM is from people who “actually want the firm to run their money.” The fund continues to charge investors management fees.
Without getting too much further into it, PAM is “fending off suits from borrowers,” according to Fortune, and its “lending practices are now being examined by the New York City’s district attorney.” I encourage you to read the Fortune story in its entirety.
How does this all affect Dornoch’s Rahway projects? It’s unclear exactly but it can’t possibly be good. I’d ask someone at Dornoch but the number to their Hillside offices has been disconnected maybe I’ll pay them a visit. [Feb. 10 UPDATE: Since this original post, I was able to get through on the phone, if only to a maze of voicemail menus and greetings. So apparently the phone is not disconnected.]
Asked about the report in Fortune, Mayor James Kennedy said he never heard of P&F Management and doesn’t know who Fishman’s partners are, while City Administrator and Redevelopment Director Peter Pelissier said he was aware of a Holland-based hedge fund backing Dornoch.
Surface lot coming to Lot B area
That mound of dirt near Lot B on Main Street could be on its way out in the coming weeks. During this month’s Redevelopment Agency meeting, City Administrator and Redevelopment Director Peter Pelissier was hopeful that the dirt and sales trailer at The Westbury site on Main Street could start being moved within the month.
Dornoch, which had planned to construct a multideck parking facility with condos, will lease the site to the Parking Authority for surface parking until a deck is constructed. Pelissier said the Parking Authority will work with the city and Union County to create the surface lot, first leveling out the site and laying gravel until it’s resurfaced in the spring. He expects another 100 spaces could be added.
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Worthwhile piece in New Jersey Monthly about hyperlocal Web sites and the evolution of local, online news. Good thing we got in on the ground floor in Rahway — second anniversary (what!?!) just about a week away.
City looks into East Cherry Street building
City Administrator and Redevelopment Director Peter Pelissier said he has asked the city engineer and city construction official to investigate whether the burned out building on East Cherry Street is structurally sound or should be razed.
The barricades that went up in front of the building within the last month were placed there by the Department of Public Works as a precaution, according to Construction Official Richard Watkins. He said the front wall, which is wood frame construction, is no longer held in place by a floor system, so if one leans on the wall, a slight gap opens between the sidewalk and face of the wall.
The eyesore at 65 E. Cherry St. was acquired by Dornoch for $65,000 from the Parking Authority. A fire occurred in summer 2005 when it was home to a wig and beauty supply store.
Prior to the collapse of the real estate market, circa November 2007, Dornoch had plans to develop the property, adding a third floor with residential units on the second and third floors and ground-floor retail.
The grassy lot next door, adjacent to the Rahway Grill, at one point was considered for a possible walkway/promenade access to the Lewis Street parking deck.