Council-At-Large States Meridia Letter Was “Inappropriate”

(This is the first of a two-part series regarding Meridia development at the Sullivan property.)

At a special meeting on Thursday, March 15th, the governing body had a 6 p.m. closed executive session regarding the development of what is commonly known as the Sullivan property. Before the closed session, Craig Ryno, head of Approvals & Acquisitions for Capodagli Property Company (CPC), spoke during the public comment portion allowed at the start of the special meeting. CPC is the developer that is the ‘contract purchaser’ of the Sullivan property at the intersection of Chestnut Street and Westfield Avenue. They have already been approved to develop Meridia At Roselle Park, their 212-apartment two-building residential complex, further down the road at the former Domani’s Restaurant site at 220-250 West Westfield Avenue. The site has 5,000 sq. ft. on the ground floor reserved for retail space with mention made of a restaurant but – to date – no formal establishment has been made public. The project is currently under construction.

Mr. Ryno’s appearance prompted Council-At-Large Joseph DeIorio to address a correspondence hand-delivered by Dennis Liloia, CPC’s general counsel the previous day.

“You may want to convey a message to your attorney from whom we received a letter today. The tenor – the tone – of the letter was inappropriate. To me, it appeared that it’s almost like a bullying tactic insisting that he attend the closed session meeting. I just thought that it was inappropriate and that’s probably the only bad experience I’ve had so far with your firm. So you may want to share that with him.”

“I think you just did,” responded Mr. Ryno, motioning behind him to note that a representative was in the audience.

“Thank you. That’s good because I can speak directly,” continued Council-At-Large DeIorio looking behind Mr. Ryno, “I did not appreciate the letter.”

The correspondence is included below.

Before the exchange, Mr. Ryno spoke publicly spoke on the topic of the letter, saying, “We are the contract purchaser for the Sullivan piece. We have been in contract on that piece for nearly a year . . .  This project seems to be moving a little slower than some of the other ones have in the past . . . Tonight you’ll be discussing a concept and that’s merely what it is – a concept. In a lot of towns, we put multiple concepts together for [a] property. We just want to make sure that everyone understands that we’re here, we’re available to talk with you, we appreciated the fact that you came out, saw our buildings, toured our buildings. We appreciated the fact that we were able to meet with you but also if there’s any input you would need that would help you to facilitate moving this thing along and getting this thing closer to fruition, we think it would be great.”

Mr. Ryno went on to offer information stating that the property taxes on the Sullivan property are currently $71,000. Tax records show this year’s property tax to be a little over $90,000 with the municipality getting around $30,000 of that amount. Mr. Ryno said that CPC’s rough estimates with Payment In Lieu Of Taxes (PILOT) would be ‘close to a million dollars’ in payments, adding, “$900,000 is a nice gift to every town. A town could do a lot with that $900,000 or whatever units we work on.”

Mr. Ryno was referring to the general calculations offered that state with PILOT, 95% of the payment goes to a municipality while nothing goes to a school district. PILOT was designed to provide incentives for a developer to build in a community. The only issue with that statement is that, according to McManimon, Scotland & Baumann, LLC – the special counsel appointed by the municipality to assist with development – the only amount collected almost exclusively by the municipality will be the improvement portion of a property’s assessment. A quick tutorial: all properties in New Jersey have two parts to their assessment – land, and improvements. These combined are what property taxes are based on. Under PILOT, according to the municipality’s special counsel, full taxes will still be collected on the land portion of the assessment which will be divided between the school (~55%), the municipality (~33%), and the county/open space (~13%). The improvement portion will be collected through PILOT based on the revenue generated from the property and 95% of that will go to the municipality and 5% will go to the county – none of that PILOT will go to a school district. Using these calculations, a million dollars in tax/PILOT revenue would be much greater than $90,000 but less than $900,000.

Mr. Ryno also remarked on the mixed-use portion of the proposed Sullivan project, “As far as the mix or the use, we’re open for anything there and for any suggestions that the council has.”

He concluded, “We’re excited about Roselle Park. We’re excited to be here. We think that it’s a great place to be. We think that we can add a lot to it. We know that our first building is going to do that and we think that this location downtown could add a lot and anything we could do to get it started, we appreciate that. And any questions that you have, we’d be happy to answer.”

It was at this time that Councilman DeIorio spoke, although he did offer praise for the developer with the first part of his statement, “I want to thank you for your hospitality. You’ve always been open and welcome to visit your sites and available for questions. So I appreciate that. I appreciate our interest in Roselle Park especially on the site that’s the most [important] site [probably] in the borough’s community.”

In response to the councilman’s statement concerning the tone of CPC’s letter, Mr. Ryno responded, “I don’t think it was and we apologize for anything that may have been offensive but it was no attempts to be offensive. It was just an attempt to say that if possible we’d like to be involved as contract purchaser but no offense was meant and we apologize for any offense that was taken. We’d like to continue to work with the council as we have in the past to make Roselle Park a better place to live and as to you say develop probably one of the most important pieces in town but we’d like to do it quickly. As you know real estate cycles. This cycle has been going on for a long, long time and interest rates are starting to rise, banks are starting to get a little more cautious. The faster we can get this in, the faster we can move along on this project, the faster we can all reap the benefits. We just don’t’ want to have any hiccups as [there] have been in the past where cycles have taken on out and then opportunities have been missed. I’m not saying that’s going to happen here, I’m just pointing out things that happen.”

The second part of this series will discuss the proposed concept for this site.

Download Meridia Letter To Council (March 14, 2018)