By Charles Layton
It looks as though, over the next couple of years, Asbury Park will resume construction of new beachfront townhouses and condominiums. But it will proceed more slowly and carefully this time to avoid the calamities that resulted from its fast-track development plans of the past.
There is a lesson here for Ocean Grove, as negotiations proceed over our own North End hotel/residential redevelopment plan.
Asbury Park had soaring ambitions in 2002 when it set out to revive its beachfront area. It drew up a $1.25 billion redevelopment plan that was to include 3,100 new residential units, mostly condos. But then, in the midst of construction, the housing market crashed. The Esperanza, a high-rise project that was to contain 224 luxury units next to the beachfront, was abandoned by its developer and foreclosed upon by its lender due to lack of sales. Wesley Grove, another condo project just across from Ocean Grove, also fell flat in the market. The developer only completed one of four planned phases, leaving a forest of unsightly wooden stumps in an open field where the rest of the homes would have been.
Last December, the City of Asbury Park took its master developer to court, accusing the developer of defaulting on its obligations. And three weeks ago an arbitrator ruled that the developer was not responsible for most of the delays and failures the city had cited. Instead, he declared, the primary failure was the city’s own fast-track plan, which was at odds with housing market reality.
“The market conditions in the United States, including New Jersey, during this time period were, and continue to be, extremely poor,” the arbitrator, retired federal judge Nicholas Politan, wrote. “Testimony elicited at the hearing supports the fact that there exists a housing market catastrophe. This is particularly true in areas primarily geared to seasonal and second home development.”
(Every realtor in Ocean Grove would probably say “amen” to that.)
And so, rather than allow the city to acquire a new master developer and plunge headlong, as before, Politan prescribed a more modest and prudent course. He ordered the developer to deliver plans this month for a new project – 28 townhouses at Asbury Avenue and Kingsley Street – and to complete those homes within about a year and a half. Once 50 percent of those units are sold, the developer could begin building 168 more units at Munroe and Cookman. Until 50 percent of those are sold, other proposed housing projects in the oceanfront redevelopment area would remain on hold.
How does all this affect Ocean Grove’s North End? Well, in the first place, besides a hotel, the North End plan includes as many as 85 residences, most of them condominiums. In the second place, as Politan says, the catastrophically bad housing market continues. And in the third place, the additional residences likely to come on line in Asbury, right across Wesley Lake from the North End, will be added competition for the North End condos — and in an already glutted market.
Last month, the Ocean Grove Home Owners Association approved a list of suggestions for Neptune Township to consider as it negotiates a final agreement with the North End developers. One of its suggestions is a timetable somewhat like the one Politan is imposing on the Asbury Park developers. The HOA suggests that each block of condos should be 75 percent sold before the next block is started, “to insure no empty partially constructed structures.”
The wisdom of this suggestion is obvious.
I think a hotel with mixed retail on the North End would be in keeping with the historical usage of this piece of land. My concern is that there just wouldn’t be enough interest to fill an 80-room hotel on a regular basis. Many hotels accomplish this by hosting events – conferences, weddings, reunions, etc. This requires meeting space, ballrooms, etc. Being a destination place for events like these are especially important during the off-season. I’m sure the developers are accounting for this in their plan. But to be successful in this you also need something else – booze. I’m sorry but I don’t see the CMA being able to fill that hotel with Christian teetotalers month-after-month. So I fear that this hotel will quickly turn into residences, which in this housing market – sorry, it’s never coming back the way it was – will be half-filled, especially if there are 85 condo units right next door and hundreds of other units in Asbury (many of which will also remain vacant). Vacant units don’t look good, are more prone to out-of-control fires, and fall into disrepair. They take up space that could be filled with lower density usage. I’m not saying it needs to be a bunch of single family homes but how about a reasonable number of condos/townhomes (40-50) and some mixed retail minus a big hotel?
I was the only person on the Committee who wanted single-family homes, but I was outvoted. Please do not take this as any kind of foreshadowing or secret plan, but as a project manager by trade, I also know that over the lifespan of this project, the residential component of this redevelopment plan may remain as condos or it might change to single family homes. Time tells all stories; it will tell this one, too.
If the retail component of the North End plan comes to fruition as it is currently written, with the right retailers, it could be a nice little destination. With the revitalization of Asbury’s boardwalk with restaurants with liquor licenses, retailers, and activities, the two oceanfront areas really do complement each other, rather than compete against each other, and that’s a rare thing these days. Usually, if two towns develop their beachfronts side by side, the only way one can survive is by decimating the other. We are fortunate that Ocean Grove’s unique qualities preclude that type of nastiness.
anonymous, you read me wrong. I totally agree with you about the right mix of buildings. I wouldn’t want to see what OG would look like if the HOA had thier way.
Nobody is saying OG should be like Asbury or LB. Having one grand facility on the north end of town would not make all of OG like LB. Charles wrote an editorial about stalled development based on Asbury Park’s recent history. I am merely suggesting that there are success stories in addition to failures of development (again, removing the ED aspect from LB’s effort).
waterseller – You have misread me. Far from wanting a monotonous “Levittown by the shore,” I savor the mix we enjoy now. My faith in a free market system gives me hope that a smart developer will come up with the right mix of condo units, hotel rooms, single family houses and stores to maximize the return on investment. This in turn should result in a good ratable which should help keep my property taxes from becoming unaffordable. I doubt all single family houses on the North End would accomplish that.
Sorry, but I simply don’t understand … Long Branch? Asbury Park? You really want Ocean Grove to become like them? If you really want to see high density condos everywhere and desire that particular lifestyle with a commercialized oceanfront, why in the world did you choose a community like Ocean Grove in the first place? Asbury Park and Long Branch had, and still have an abundance condos available, (lots of desperate sellers, too!) if that’s what you’re really looking for.
Well said anonymous. If the HOA had it’s way, every multi family structure would be torn down and single family homes built. Then we can change Ocean Grove’s name to Levittown by the shore.
As I said, eminent domain aside… Compare apples to apples Mary Beth and forget the ED portion. ED is not an issue in Neptune, sorry Ocean Grove.
Does not a property owner have rights as to how its property may be legally developed? Those who might prefer single family homes have the right to purchase property and build single family homes. The HOA has enough to do without taking on the role of developer.
I personally hate to use Pier Village as a shining example of redevelopment, due to their heavy-handed use of eminent domain in the MTOTSA area and their eventual loss in court to the homeowners there and the taxpayer dollars they burned through fighting a losing battle.
Of course one can look a little further north and see Pier Village and what it has done for Long Branch. Eminent domain aside, the Pier Village residential component shows signs of success and, while we don’t need as many retail outlets as Long Branch, there is still room for a few new stores as part of the North End. It all comes down to the developer and careful planning. My guess is that WAVE doesn’t mind this delay, especially since they aren’t paying taxes on undeveloped land (CMA is).
I will say that in the one meeting the Township had with the property owner and their developer, the depressed housing market was definitely their first and foremost concern. A mix of professional developers and owners who rehabilitated their facilities according to the guidelines the city set with low-interest loans may have been more successful and also left some deep-rooted Asbury Park residents and businesses in the ground to grow and thrive.
From my personal perspective as liaison to redevelopment for the past five years, Asbury’s two main mistakes were choosing one master developer for the entire beachfront and using eminent domain to acquire properties in the beachfront area to hand over to Asbury Partners for use in their redevelopment project. To me, personally, using one developer for the whole area puts your entire redevelopment plan at risk, due to the enormous amount of money that company will need to borrow for construction finance before they can recoup their costs through the sale of completed condos and town houses. With eminent domain – and I understand if people don’t agree with me – the municipality gets several appraisals of a property, as does the owner, and then the municipality looks at both sets of appraisal numbers and makes the property owner an offer they literally cannot refuse. In Asbury’s situation, they have lost several court cases and have to pay the former owners more money than what was put in escrow for them by the city. In the meantime, many properties, in particular quite a few nicely-kept apartment buildings and many residential homes, were acquired through eminent domain and either boarded up or razed, giving a few of the blocks near the beachfront a strange, abandoned look until you get to Kingsley, where you can see the nicely-refurbished boardwalk and its shops and restaurants.
Hindsight is always 20/20, but lessons are being learned from Asbury Park’s experiences, past and present.
If the OGHOA was acting in the true interest of the Grove they would have pushed for HOMES ONLY. One-family homes would gel with the surrounding homes and not be overpowering, as is a four- or five-story condo. Don’t get me wrong, the HOA committee people involved did a great job, but I feel their effort should have focused on single-family homes.
There are over 100 properties for sale in OG. These include houses and condos. Any real estate people out there that would like to comment whether that is average or high?
Before this latest economic relapse, economists were saying that it would be 2014 before the housing market in NJ would start to meaningfully rebound. There are simply too many foreclosures and desperate sellers and demand will not uptick until there is a sustained economic recovery. This is especially true in shore communities. Now, with the events of last week, we probably can add at least another year. Who would invest in a new construction project now? All such a project will do is further depress prices of the existing housing stock and potentially bankrupt the developer. Sounds like lots of condos coming….