City falling for developer?
Tuesday, December 27, 2005
By TOM MEAGHER
ASBURY PARK - Rich DePetro's passion and business is restoring historic buildings. But he can't do that here at the Shore anymore.
And he fears that if the city of Paterson approves a redevelopment deal for the Great Falls area with the sister company of the one redeveloping Asbury Park, neither he nor anyone else will be able to ply their entrepreneurial skills in the Silk City's falls neighborhood.
DePetro said that Asbury Partners LLC, has monopolized the redevelopment of Asbury Park. Now, he believes that a similar proposal by the related firm Dornoch Holdings LLC, could lead to freezing him and other developers out of the Great Falls redevelopment action.
"There's a big problem here," DePetro said. "This is like déjà vu all over again."
Dornoch has proposed an ambitious plan to revitalize both sides of the Passaic River around Paterson's famous landmark by building nearly 1,000 new apartment units, condominiums and town houses.
Asbury Partners has been designated to develop more than 3,000 new residential units in three big projects in this resort city of 17,000 people, said the company's chief operating officer, Larry Fishman.
In Asbury Park, however, the city council redrafted its redevelopment plan in 2002 to name Asbury Partners the exclusive developers in the city's 56-acre Waterfront Redevelopment Area, after decades of failed projects.
DePetro and other property owners said that gave Asbury Partners a virtual lock on all construction in the neighborhoods near the city's beach. Asbury Partners got the right to secure financing, acquire land and dole out construction work to sub-developers, who pay Asbury Partners fees.
"People didn't realize the city was giving their property away to (Larry) Fishman," said DePetro.
In November, the Paterson City Council considered a resolution, sponsored by the Department of Community Development and presented by Mayor Jose "Joey" Torres, for a deal with a Dornoch subsidiary, Dornoch Paterson, to redevelop the Great Falls Historic District- but put off a vote.
Several council members questioned the selection process and sought more information on Dornoch's links to Asbury Park's redevelopment.
Dornoch's attorney, Charles Liebling, insisted that Dornoch wanted to be designated redeveloper only for certain properties- not the entire Great Falls area.
But the vagueness of the resolution prompted the council to postpone its consideration.
With Dornoch's bid in limbo, Glen Fishman, managing director for Dornoch and Larry Fishman's brother, said he intends to go ahead and build a smaller project on two Jasper Street properties on the peak of the cliffs over the falls and on Ryle Avenue, which does not require council approval. Instead of the trio of eight-story condominiums at the top of Jasper Street in Dornoch's original plan, Fishman said he will build a pair of four-story buildings.
Glen Fishman estimated the original Dornoch project would have netted the city at least $6 million a year in new tax revenues. His scaled-back project, which would include about 90 housing units on Ryle Avenue and Ryle Road, would bring in about $2 million a year, he said.
Unlike the Asbury Park project, Glen Fishman said, he does not want condemnation rights or to use eminent domain in Paterson. He simply wants to be able to negotiate with private owners and to acquire land from the city, he said. He wants to break ground by summer.
In 2002, DePetro bought the shell of a 1924 Spanish Mission-style apartment house on Asbury's Second Avenue, wanting to breathe new life into one of the ailing resort's first apartment buildings. That summer, the city of Asbury Park adopted its revised redevelopment plan, giving Asbury Partners exclusive rights over the shore front area.
Once the redevelopment deal was in place, DePetro said, his troubles with the city began. Only a lawsuit allowed him to finish his building. He gave up on restoring a second, matching building next door.
DePetro and other Asbury Park property owners said that dozens of properties would have been redeveloped by now, had the city council not granted Asbury Partners exclusive rights.
"The council, they're not savvy," said DePetro. "They're not business people. They have no real estate acumen. The council said, 'We can't let the town go bankrupt. We'll take it.'"
Asbury Partners' Larry Fishman conceded that Asbury Park doesn't look today like much has been accomplished. But progress has been made, he said. The company installed a new boardwalk along the beach. It is rebuilding streets and infrastructure near the beach. Sub-developers have broken ground on two large residential developments. Fishman said he expects Hoboken-based Metro Homes to soon demolish a hulking, 12-story structure of rusted steel girders and concrete stairwells, known locally as C-8 - the unfinished condominium project that has symbolized the resort city's blight since the 1980s.
"You're seeing that in a town that didn't have any investment in 10 years, we've been able to have a lot happen in a very short amount of time," Fishman said.
With the help of a cohesive City Council, Larry Fishman said, all of the housing and much of the boardwalk retail will be completed within seven years.
He said he expects about $300 million of new investment.
Having left Asbury Park, DePetro and his company, Preservation Partners, are developing market-rate condominiums in a pair of historic Paterson buildings - the Cooke Mills on Market Street and the Rogers Mills on Spruce Street.
"When someone brought me to Paterson, I was just blown away," said DePetro. Then, he added, "I heard Fishman was coming in there. You have no idea what's going to happen here."
Looking over his shoulder, DePetro said he is warning other developers and property owners of what could lie in store if Dornoch gets exclusive rights to redevelop the Great Falls district in Paterson.
"They're going to come here and take your property or, worse yet, tie you up, get development rights and hold you up until you go bankrupt," DePetro said.
Reach Tom Meagher at (973) 569-7152 or email@example.com.
Copyright © 2005 North Jersey Media Group Inc.
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