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Asbury Park in New Pact to Restart Development

By RONALD SMOTHERS

Published: April 7, 2006

ASBURY PARK, N.J., April 5 Asbury Park's hopes of redevelopment have been frustrated by more than a decade of failed plans, bankrupt developers and corruption.

 

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Keith Meyers/The New York Times

After more than a decade of failed plans, Asbury Park has reached new agreements with its development partner to speed the refurbishment of the Convention Hall, dilapidated casino and boardwalk pavilions.

 

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Keith Meyers/The New York Times

Work is under way on 147 town houses by Westminster Homes, a sub-developer of Asbury Partners, in a 56-acre section of Asbury Park. The city has reached agreement with Asbury Partners to resume redevelopment.

But the city's prospects took a step forward this week when it reached a new agreement with its development partner to speed the refurbishment of the city's sagging Convention Hall, dilapidated casino and Boardwalk pavilions, and to quickly resolve disputes that have bogged down progress in the past.

 

The agreement is a result of nearly six weeks of negotiations between city officials and Asbury Partners, its redeveloper, after council members and others grew impatient with the slow pace after the city turned over the Boardwalk buildings to the company in 2001.

 

Critics of Asbury Partners had threatened to press for the developer's ouster if there was no agreement on strict timetables to complete the work and assurances that the developer was financially able to do so. Under the contract, Asbury Partners is to oversee the redevelopment of the buildings and a 56-acre parcel of shorefront.

 

The developer has also agreed to put in escrow an amount equal to 25 percent of the estimated $6 million in work on the Boardwalk buildings, obtain performance bonds for each project and provide periodic financial statements detailing its net worth and any significant changes in its finances.

 

One of the key provisions of the new agreement, said Terence J. Reidy, the city manager of Asbury Park, was a dispute resolution process that involves an arbitrator with the power to settle disagreements and to dictate remedies. The goal is to resolve disputes within 60 days. Mr. Reidy said that the only recourse for the city in past disputes had been to find the redeveloper in default, a move that often led to court battles.

 

"And when you hold a developer in default it sends a terrible message to the financial community," said Mr. Reidy, recalling the city's plight in the 1990's when its developer went bankrupt and redevelopment hopes were stymied by protracted litigation. "Default says that there is not good communication with the developer, but this agreement creates a softer trigger in disputes and signals a higher level of communication and commitment by both the city and the developer."

 

Larry Fishman, the president of Asbury Partners, said that part of the reason that work on the Boardwalk buildings had been delayed was that litigation challenged portions of the agreement that brought Asbury Partners to the city in 2001. But he said that as a result of the City Council's concerns, "rampant rumors" questioning the company's intentions, and the need to show its "commitment" to redevelopment, the company would no longer wait to start.

 

"We have gotten timelines memorialized in this agreement and given financial assurances to our commitment," Mr. Fishman said.

 

Many residents who have long mistrusted Asbury Partners continued to be skeptical. They said that although the new agreement has set time limits and financial guarantees that the city never had before, it had nevertheless taken more than four years to get them.

 

"I just hope it comes together," said Dan Sciannameo, president of a New York real estate appraisal company and a resident who has criticized the redevelopment effort.

 

The new agreement focuses on the premier beachfront buildings that many hoped would be the beacon for further redevelopment. But it does not directly apply to Asbury Partners' dealings with the sub-developers that it hopes to attract in order to bring housing and retail businesses to the area. Already the redeveloper has made deals with three sub-developers who are currently building 525 of the envisioned 3,100 condominiums and rental apartments in the area.

 

Some critics had questioned whether Asbury Partners was extracting too much for itself from such deals and thereby dousing interest in the redevelopment among property owners and other developers. But Mr. Reidy said the new agreements had opened a "dialogue" that would allow the city to influence redevelopment efforts beyond the Boardwalk.

 

Glenn Scotland, a partner in the law firm that represented Asbury Park in negotiating the new agreement, said that the concessions obtained from Asbury Partners the timetables, for example, and the escrow money were not available to the city in 2001 when they were desperate for help in getting redevelopment restarted.

 

"But this redefines the relationship between the city and the developer and acknowledges that the city has promise and has become a more significant and commanding partner," Mr. Scotland said.