Council Approves Redevelopment Plan Ordinance And Formally Appoints Developer

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Published: June 9, 2016 @ 5:00 PM EDT

At last night’s special meeting, council approved Ordinance 2463, which is the Redevelopment Plan for Block 314, Lots 7, 8, 9, 10, 11 and 12. The plan is the framework of what can go on the properties that used to be Domani’s Restaurant along with five other properties. This ordinance was heard at a special Municipal Land Use Board (MLUB) meeting two nights ago and passed by the MLUB. Points discussed during the public hearing as well as among the governing body included the ratio of 120 units per acre, the parking ratio of 1.5 spaces per residential unit. After clarification by Anthony Kurus from Neglia Engineering – the municipality’s engineering firm as well as the MLUB planner – that the ratios were not state standards but calculations based on the firm’s review of the study area, council voted on the ordinance and unanimously approved it.

Right after, in a break with usual meeting protocol to have a public comment portion before resolutions are voted on, the governing body reviewed Resolution 148-16 which was to designate Meridia, a Capodagli Property Company (CPC), under the name ‘Meridia On Westfield, Roselle Park, LLC’ as the conditional developer for the redevelopment project for Ordinance 2463.

One major difference between the redevelopment plan and the resolution is that it excludes Block 314, Lot 7 from the actual development. Even though it was encompassed in the original study of eight (8) lots, lot 7 became the third property to be removed from the actual project – the other two being lot 14 (Skinner & Cook) and lot 6 (Surgent’s Elite School of Gymnastics). This reduced the acreage of the actual project from 2.73 to 1.74 acres.

As the floor was open for discussion, Fifth Ward Councilman Thomas ‘Thos’ Shipley said, “Don’t get me wrong, I’m all for seeing great things happen in town but what I have an issue with is some of the process in getting here. It’s just not been as transparent as I’d really believe it should be or should have been and so at this point I need some clarity. If I’m not clear about it, the people aren’t clear about it. For the record I’m going to ask some questions.”

The councilman then went through the 16-page agreement, asking for clarification on legal terms and conditions. On hand were Joseph Baumann, the borough’s special council for this project from the law office of McManimon, Scotland & Baumann, LLC, as well as Sean McGowan, , the Vice President of Development for CPC. The councilman, in requesting information from exhibits A and B, which were missing from the agreement, asked who were the owners of the company. He was notified by Mr. McGowan that Meridia is owned 100% by George Capodagli.

Mr. Baumann, who negotiated the terms for the municipality, explained at one point early in the discussion that the logic behind the conditional redevelopers agreement which was being reviewed was to have the municipality no longer spend municipal funds on the redevelopment. He stated that redevelopers cannot fund municipal costs until after a study and a plan were in place. The approval of Ordinance 2463 allowed for everyone to proceed with the conditional agreement and for the municipality to be reimbursed for all previous costs associated with the process through an escrow account funded by the developer. An initial check of $35,000 will be deposited into the escrow account which will pay for most, if not all the costs up-to-date. Mr. Baumann further explained that as soon as the funds reach $5,000, it will automatically be raised to $20,000 and do so for the duration of the project.

The conditional agreement provides for 120 days of exclusivity to the developer to attempt to achieve, in good faith, a list of tasks referred in Article II of the agreement. Mr. Baumann said that, technically, Meridia will not be the redeveloper until a full Redeveloper’s Agreement is negotiated and signed by all parties. When asked by the Fifth Ward Councilman who would negotiate that contract, Mr. Baumann said that it is usually himself, the mayor of a municipality, a business administrator or chief financial officer and a zoning officer.

The councilman admitted that he knew only some information on Meridia, having seen their website and done some other research. Councilwoman-At-Large Charlene Storey stated that she had been in contact with them and whenever she had any questions or concerns, the developer was very cooperative.

Mr. McGowan said that they have developments in Linden and Rahway and that any member of council is welcome to a tour, which Councilwoman Storey stated she had taken, of their properties. Later, even though Mayor Carl Hokanson stated that the offer to tour Meridia properties was made to all councilmembers, Mr. Shipley stated he was never given any such offer. In addressing the rents, Mr. McGowan stated, “Generally, our rents are pretty comparative to a house that someone can rent or a mortgage payment.”

He added that Meridia usually manages their properties by that they are starting to talk to outside property management companies. He also stated that references from various elected officials throughout the state as well as financial institutions can be made available.

A section of the agreement referred to the Long Term Tax Exemption Law and Councilman Shipley confirmed that this refers to what could become tax abatements or Payment In Lieu Of Taxes (PILOT), if the developer so chooses but nothing was mentioned by Mr. Baumann or Mr. McGowan regarding any of these possibilities. It was stated that if PILOT is chosen, not only will there be a school-age children (SAC) impact study but the developer would be required to present a fiscal impact study.

One point that was cleared up for the councilman was that the conditions of this agreement only apply to the LLC, which was created for this project, not the parent company but that most developers follow this practice when developing a property.

Mr. Shipley asked if any other councilmembers had questions or how they felt about the project, Councilwoman Storey stated she felt comfortable about it since they were always receptive to her inquiries and First Ward Councilman Eugene Meola said, “I’ve seen their building in Linden off of Wood Avenue. It’s very well done. If they could do that here I’d be very satisfied.”

Mayor Hokanson concluded the discussion by saying, “There’s going to be more than one public hearing so the people will be informed of what’s going on, how it’s going to go on.”

Councilman Shipley made a recommendation to not only have public information meetings but to also put up any and all possible information – such as a timeline and documents – on the borough’s website.

In front of an audience of 12 people, the Conditional Redeveloper’s Agreement, which named Meridia as the redeveloper, was approved unanimously by those councilmembers in attendance. Fourth Ward Councilman Mohamed ‘Gino’ Elmarassy was absent from the meeting.

The next step will be to have Meridia do the following by October of this year:

  • Prepare a Concept Plan of the project
  • Begin negotiated the full Redevelopment Agreement
  • Prepare a preliminary cost estimate for the project
  • Prepare and provide an analysis of parking requirements, traffic patterns, construction schedule, and environment constraints affecting the redevelopment project
  • Begin negotiations for tax exemption under the Long Term Tax Exemption Law (if applicable)
  • Apply for and secure all government approvals

A copy of the agreement is available below for review and/or download:

Download File (PDF)