Hoboken / Manhattan Real Estate Blog

Tuesday, December 27, 2005
By TOM MEAGHER
HERALD NEWS

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.

By Bob Fernandez
Inquirer Staff Writer

Home builder Toll Bros. Inc. yesterday reported a soaring fourth-quarter profit - up 72 percent to $310 million - but warned of a slowing housing market.

The Horsham company forecast flat to modest profit growth in 2006, saying it expects to earn between $810 million and $890 million. In fiscal 2005, which ended Oct. 31, the company’s profit almost doubled to $806 million.

Toll Bros. plans to open 143 subdivisions in the United States in 2006, providing a pipeline of new homes as its older subdivisions have sold out. Toll controls 83,000 lots, a five- or six-year supply. The company also is selling units in high-rise condo buildings in Hoboken, N.J., and Florida.

For the fourth quarter, Toll’s revenue jumped 40 percent, to $2 billion. Per-share earnings rose to $1.84 from $1.11 in last year’s fourth quarter.

Robert Toll, chairman and chief executive officer, said the housing market should return to more normal levels of growth - or those seen between 1994 and mid-2003 - in 2006.

“We look to the future with cautious optimism,” he said in a statement. “We believe demand for our luxury homes relies, in large measure, on consumer confidence, which has suffered among our clientele.”

Toll executives have said that the three Gulf Coast hurricanes in late summer, and the resulting spike in oil prices, shook consumer confidence, leading to slower traffic through its models.

While the Conference Board’s consumer confidence index rose in November, it still was below the levels of last summer, before the storms.

Rising interest rates also are starting to affect the housing market. The Federal Reserve has raised short-term interest rates 12 times in the last 18 months. As a result, the rate on a 30-year, fixed-rate mortgage was 6.41 percent yesterday, compared with an average of 5.83 percent in December 2004, according to mortgage tracker HSH Associates, of Pompton Plains, N.J.

Robert Toll said in a conference call with analysts that sales activity varied by region - with the Philadelphia suburbs being a “fair” market. He said the Washington area had suffered with speculators pulling out of the market.

Toll shares rose $1.25, or 3.6 percent, to $35.55 yesterday on the New York Stock Exchange. The company’s stock has traded between $33.75 and $58.67 in the last year.

Ground broken for luxury hotel to open in 2 years

Thursday, December 01, 2005
By JARRETT RENSHAW
JOURNAL STAFF WRITER

HOBOKEN - The Mile Square City now has something in common with San Francisco, Seoul, Sydney, Barcelona and neighboring New York City.

Hoboken will become the next city to boast a luxury W Hotel following yesterday’s groundbreaking ceremony on the city’s southern waterfront.

The W Hoboken, a sleek, wedge-shaped, 25-story building, will feature 225 rooms plus 37 luxury condos with unobstructed views of the Manhattan skyline, and an upscale bar and spa. Condo owners will enjoy all the luxuries of hotel life, including 24-hour room service, a daily maid and concierge service. It is scheduled to open in fall 2007.

Hoboken-based Applied Development will develop and own the facility, but it will be operated by Starwood Hotels & Resorts Worldwide.

Local civic and political leaders proudly hailed the coming of the W Hotel as a historic and transforming event in the city’s history.

“This is a great milestone in the history of the city, and it solidifies that Hoboken is one of the most favored destinations in the state of New Jersey,” said Mayor David Roberts, one of the biggest supporters of the project over the years.

The ground-breaking attracted political leaders from all corners, including Hoboken resident Rep. Robert Menendez, who said the W Hotel’s presence “exemplifies the city’s enormous potential and all the great success it has already realized.”

“It’s giving us an icon on the waterfront,” boasted City Council President Chris Campos.

Michael Barry, president of Applied Housing, said before yesterday that the $62 million hotel would itself bring the city more than 200 jobs, not including construction work, and that guests would spend roughly $100 in Hoboken per visit.

Rumors were buzzing at the press conference that one of W’s newest tenants will be newly elected Governor and Hoboken resident Jon Corzine, whose spokesman refused to confirm or deny.

Menendez was asked if he thought about moving into one of the luxury condos, and replied: “I live on a public servant salary, I don’t think I could afford to live there.”

Although the W Hotel is still to be built, it has already attracted at least one entrepreneur.

“When I was looking for a site for my restaurant, I looked all over Hoboken, but I chose this spot because of the W Hotel,” said Richard Browne, owner of Quays restaurant, located less than a block from the site.

Browne, like others, believes the W Hotel will draw some attention away from Washington Street and cast some light on the night life on River Street, where many upscale restaurants have found homes in recent years.

“It’s a huge plus for us, and for the town,” Browne said.