The Redevelopment Agency voted unanimously last night to declare Carriage City Properties in default of its redevelopment agreement. Carriage City has 30 days to rectify the situation or the matter could head to Superior Court, Redevelopment Director and City Administrator Peter Pelissier said.
Continue reading Carriage City declared in default of agreement
The new owners of the office space above the library told city officials they may need more parking, judging by the interest from potential tenants.
Contracts totaling nearly $75,000 for asbestos abatement and storage tank removal at the Bell Building, along with a change-order for the removal of a storage tank at the former Hamilton Laundry site were approved by City Council earlier this month. Contracts went to AWT Environmental Services, DIA General Construction of Clifton, and Warren-based Whitestone Associates.
A banner at the Hamilton Laundry site proclaims a spring 2010 timeline for a 1,000-seat amphitheater. A black box theater and performing arts space is planned for the Bell Building while the neighboring Shami Apartment are eyed for senior/artists’ housing.
The house adjacent to the Hamilton Laundry site was acquired by the Redevelopment Agency and scheduled to close in December, but Agency attorney Frank Regan reported that the owner has been unable to vacate tenants, which was one of the conditions of closing, and may need to proceed with eviction, but not until the end of this month.
The Savoy apparently has been approved for financing and the hope is that construction will resume this spring on the 36-unit project. There’s been virtually no activity on the site since last summer.
City Administrator and Redevelopment Director Peter Pelissier told the City Council and Redevelopment Agency this week that Mayor James Kennedy received a phone call from Glen Fishman, managing director with Dornoch, that financing had been approved. Dornoch had been re-negotiating with Wachovia.
Hillside-based Dornoch Management also is completing The Monarch, a senior housing/condo project in Plainfield. That project, which appears much further along, apparently has units starting at $199,000, a 45 percent correction over the $360,000 asking price when ground was broken 18 months ago. Banners adorning the fencing at The Savoy as recently as last summer boasted of units starting at $315,000.
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.
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.
Informative story in Sunday’s New York Times about condo projects turning to rentals, namely the state law that says after 75 percent of units are sold, “management shifts control to a homeowners’ association.”
It’s definitely worth a read, and particularly timely and relevant in Rahway. Apparently, it’s not uncommon in this market to go from condo to rental:
Developers often decide to switch from condo to rental, or vice versa, depending on which way the market is turning. Mr. Stolar said that he was aware of several condo developers who were contemplating the switch at buildings where sales are going slowly — or are even stalled — right now. And he isn’t the only market watcher to see this as an issue for a number of builders.
Switching to rentals is “a way to create cash flow,” he said, “and the rental market is still strong” compared with the condominium market.
Not only have two projects originally planned as condos shifted to rentals this year, bu
t I’ve been asked a few times whether Sky View at Carriage City Plaza is converting to rentals. Not likely. While individual unit owners can rent their apartments (and several units have been purchased by the same owner, by my count), Silcon Inc. would have to seek approval from the Redevelopment Agency to amend the redevelopment agreement. And I’ve heard nothing to even hint that such a move would be sought — much less gain approval.
With 209 units in Sky View, 75 percent of the building would be 157 units. By my count, almost three dozen units officially have sold and appeared in property transactions, but I’ve heard that as many as 65 percent of the units have closed.
Happy Thanksgiving!
A temporary, artificial ice rink will be installed in front of City Hall and will be available for several weeks after the tree lighting ceremony on Friday. The synthetic surface allows the use of regular ice skates.
The rink came up during a discussion at the last Redevelopment Agency meeting about the property along Augusta Street and East Milton Avenue, which probably will be used for parking for at least two years.
Landmark Companies will let the city use the parcel for parking until it obtains other parts of the block, City Administrator and Redevelopment Director Peter Pelissier said.
Landmark has purchased several parcels along Main Street, including the Wenson Associates building on the corner of East Milton.