In what might be the first bit of good news about The Savoy property in years, the bank behind the project has orders to level the site — steel and all.
Tag Archives: The Savoy
Dornoch declared in default
The Redevelopment Agency this month declared Dornoch Holdings in default of its redevelopment agreements on The Westbury and The Savoy, which has entered the foreclosure process with Wachovia Bank/Wells Fargo for failure to repay construction financing.
Bell Building a shell of its former self
Construction began last month to turn the Bell Building on Hamilton Street into a black box theater, a little at a time (photo left), until last week when several of walls were knocked out (photo below).Developer aiming to acquire Savoy site
The developer of a recently-completed rental project on East Grand Avenue is apparently trying to acquire several stalled properties in Rahway.
George Capodagli, principal of Capodagli Property Company in Pompton Plains, told commissioners that he’s negotiating with Wells Fargo in an attempt to buy out properties owned by Dornoch Holdings, the developer behind The Savoy and owner of several downtown parcels. Capodagli said he already has a design in mind for The Savoy property, aiming for “a blend of traditional and modern,” and believes a viable restaurant could be developed at one of the other Dornoch-owned properties.
Capodagli was at tonight’s Redevelopment Agency meeting to present commissioners with a preliminary concept plan for a 116-unit rental complex behind Rahway Public Library (details on that project to come). The developer’s 88-unit Meridia Grand project began leasing last summer and is at more than 85 percent capacity, he said.
In an appearance before the Redevelopment Agency in January, Dornoch managing partner Glen Fishman described The Savoy as “dead in the water.” Originally designed as a four-story 36-unit complex, The Savoy site at Monroe and Main streets has been essentially dormant since steel beams were erected in summer 2008. The Hillside-based developer owns several other downtown properties, including the burned out building on East Cherry Street.
E. Cherry St. eyesore may come down by summer
The City Council Monday night awarded a contract to install a fence around Dornoch’s dormant Savoy property on Main Street and moved forward on demolishing the developer’s East Cherry Street eyesore.
First, the governing body unanimously approved a $16,820 contract to Pollock Installations, Inc. of Woodbridge to install a fence at Dornoch I, a.k.a., The Savoy, at Main and Monroe streets. The council then introduced a $200,000 bond ordinance to cover the cost of the fence installation, as well as the demolition of 65 E. Cherry St., and improvements to Parking Lot B, a.k.a., Dornoch II/The Westbury.
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The council is scheduled to approve the bond ordinance at its April 11 meeting. If all goes well, bids for demolition would be awarded by June and demolition could come by summer, according to City Administrator and Redevelopment Director Peter Pelissier. The property paid about $1,040 in property taxes last year, according to PropertyShark.com.
During a meeting in December, Redevelopment Agency officials asked Glen Fishman, managing partner of Dornoch, about the possibility of at least installing a fence around The Savoy site, since it’s sitting there just waiting to be vandalized. Given Dornoch’s financial situation, his suggestion was for the city to install the fence and place a lien on the property.
The wall that collapsed at the property last month was not load bearing, according to Richard Watkins, director of the Department of Building, Planning and Economic Development. The building was declared unsafe and the owner was ordered to demolish it, however, he has refused, Watkins said. The city plans to place a lien on the property to recover the cost of demolition.
Dornoch purchased the East Cherry Street property from the Parking Authority for $65,000 (less than the likely cost of demolition) and had proposed renovations to the Planning Board in 2007.
Dornoch ‘dead in the water’ on The Savoy
“We’re dead in the water right now.” That’s how Glen Fishman, managing partner of Dornoch Holdings, described to Redevelopment Agency commissioners his firm’s situation with The Savoy.
In a rare appearance at the agency’s meeting Wednesday night, Fishman was invited to provide an update on the firm’s stalled projects and activity at its properties. He started with the good news (filling rental properties), but we’ll get to that in our next post. For now, the bad news.
“We’re a little stuck here, I wish I had better news,” Fishman told commissioners, adding that they’re still negotiating with Wachovia. Rahway’s real estate fundamentals still exist, with its location and proximity but housing prices have made it hard to get people to invest. “People are still confident in Rahway, it’s just the economics,” he said. Condos can’t be built when they’re selling for $150,000 a unit, he said, but expressed confidence in “getting something there” in 12 months.
Dornoch spent a lot of money acquiring properties along Main Street for the four-story, 36-unit development, many of which were razed. Archaeological and historical issues relating to cisterns at the Savoy site cost Dornoch $1 million and a year’s time, he claimed, which “blew the budget on the Wachovia loan.” At one point there was a possibility of financing from Valley National for rental apartments but the deal could not get done, he said.
Fishman told commissioners he hopes “at some point the economics make sense, whether selling to another developer who can make it work” or otherwise. Dornoch has fielded offers from some local developers, he said, but so far three offers that have been made “have not been acceptable to the lender.”
(By my estimate, via PropertyShark and other sites, Dornoch acquired almost 20 downtown parcels at a total cost of almost $9 million or more — mine may be an incomplete list — pretty much the height of the real estate market in 2006.)
Redevelopment Agency Chairman William Rack asked if the steel beams, which went up at The Savoy site in summer 2008, might be taken down at some point, assuming they probably won’t be used in whatever ends up at the site. Fishman said it’s not necessarily a certainty that the steel would go unused. Steel doesn’t really go bad so it still has value, he said, adding that Dornoch doesn’t have the money to remove it anyway, and doing so might actually reduce the value of the property.
Guest blog post: ‘Change’ that works?
Note: This is a guest blog post submitted by a reader under the pseudonym, Silence DoGood. While I may frown on anonymous comments on blog posts, this is not anonymous; I know who the writer is, however, they hope the merits of their arguments (not their identity) will carry the day when it comes to passing judgment on what they present. And in case you’re wondering: no, the writer is not me, nor is it anyone running for office. Both major party candidates for mayor have been invited to submit a guest column in the coming weeks.
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Dear Neighbor,
Perhaps you had the benefit of receiving a letter from our fine City Council At-large members and our county freeholder, Rick Proctor, seeking support in the Democratic primaries in June. I don’t normally take to commenting on things but it seems like with all things in life, there is a time and a place. This time it came to my mailbox and while I realize that the challengers lost, I think this will be a similar argument against the Republicans or any other challengers to the established Democratic Party candidates.
A great many things have occurred to me recently but I will get to those in due time. For now, two items catch my notice. First, the letter described what can only be conflicting if not altogether hypocritical stances. “We are proud of the accomplishments and represent ‘Change that Works for Rahway,'” and yet just a few lines down, they note “now is not the time for on the job training.” So what type of change do we need here? Or is this similar to — and I hate to use this as a reference — Fox News (9:10 of video), which slams polls when they support Obama and then touts those same polls when they serve their interests, like stopping universal health care.
Secondly, “Change that works”… yes, we do have a hulking new hotel downtown, and certainly there are other projects that were built over the past eight to 10 years or so, like the parking deck across from the refurbished train station. But are they all working for Rahway? The mailing mentioned three items/issues that Democrats appear to have a handle on: stable property taxes, economic growth, and preservation of quality of life.
Stable property taxes
Does anyone remember the sewer fees that were separated from our property tax bills that were supposed to save us tax hikes — but left us with quarterly bills for water and sewer charges that, according to my math, are actually a hike? Check your old property tax bills against your last year’s worth of sewer bills if you don’t believe me.
Economic growth
What about the heap of dirt that sat across from the unfinished construction on Main Street, which at one time eventually became covered with grass and weeds because it sat so long. I hear we have a great new piano for loan but hardly a pedestrian on the street to listen to it, even if it was played. And do you recall the lawsuit with overzealous developers just across from the library that leaves the city and us taxpayers holding the tab for street improvements?
Quality of life
I know it is subjective but could an uglier building (the new hotel) have been built, any more out of scale with the downtown? One that I hope won’t become public housing considering lawsuits, lack of residents and possible foreclosure. I believe it took three years for sidewalks to go back on Main Street in front of the rusted steel fingers pointing to the sky, as if asking when they will be covered with walls and a roof.
Perhaps less subjective is the lack of attention to the repair of the steps at the NJ Transit train station. Why aren’t our city representatives being more proactive on our behalf to have this fixed?
A pocket park on the corner of Monroe and Essex? Maybe I’m not as progressive as some, or don’t quite think we have the same feel as say Brooklyn, or am I just not impressed with the other pocket park across the street from the arts center — which cost taxpayers a pretty penny. Smells more like a favor to a political supporter…
Or is this the change that all incumbents say you shouldn’t offer their opponents? To be honest, I can’t remember a time in the recent past when times weren’t a little difficult for the average citizen in this country. I’m not sure their opponents can do a better job and, to be fair, there have been accomplishments to the town that I have overlooked. But is it really fair to claim that change that works for Rahway means not giving someone else a chance to serve our community? Have they cornered the market on good change?
I have other thoughts, but I will save them for another day and another letter.
Sincerely,
Silence DoGood
Lot B parking project coming soon
A story in The Star-Ledger/nj.com earlier this month included a couple of tidbits about two downtown projects:
* The plan to add about 100 parking spaces to the existing 65 at Lot B could break ground this month and be ready by October. Dornoch at one point had planned to build The Westbury, a mixed-use, 152-unit residential structure with accompanying parking deck.
While that project is on hold, the Rahway Parking Authority will lease the lot from Dornoch for $1 a year in exchange for property taxes being waived, according to interim RPA director Leonard Bier. The lease is for two years, with an option for a third, but could remain for as long as five years, according to City Administrator and Redevelopment Director Peter Pelissier.
Dornoch bought up several Main Street parcels about four years ago that now make up the site. Collectively, the property taxes on the sites were about $25,000 — when occupied by buildings — according to records at PropertyShark.com. Taxes are likely to be considerably lower because the structures have since been demolished.
Pelissier said there is demand for parking and if the Parking Authority can lease each of the 100 spaces at $65 per month, it would more than make up for the property taxes that the city would split with the county and school district. (At $65 per month, 100 spaces would generate $78,000 annually). The Parking Authority sometimes sends money back to the city at the end of the year, he added, in some cases as much as $75,000.
* Glen Fishman of Dornoch said financing is still tough to come by but even if construction financing could be secured for The Savoy, “it would take three to six months before we remobilize.” A July 2009 Ledger story quoted Fishman saying work should begin on The Savoy within a month.