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.
A victim of the housing market, The Esperanza in Asbury was never finished. Photo by Mary Walton
