June 2011

William J. Bailey instrumental in resolution of builder’s remedy suit

Englewood settles with ERA South
Thursday, June 30, 2011 
The Record

ENGLEWOOD – Developers can now build 195 apartments, 15,000 square feet of retail shops and a hotel along Route 4 in a scaled-back plan approved by the City Council on Tuesday.

The settlement agreement with the developers of ERA South, also known as “Flatrock Square,” additionally calls for 40,000 to 200,000 square feet of office space, but Mayor Frank Huttle said he doubted that portion of the project would be built.

“The likelihood of any office building being constructed there is slim,” he said before Tuesday’s vote. “The economics do not work.”

Ward 3 Councilman Scott Reddin was the only member to comment before the body voted unanimously for the settlement.

“Like anything else, I agree with it 90 percent,” he said. “There’s always some things, like the budget — it isn’t perfect, but after two years of negotiations it’s time to get things moving on.”

Once approved by ERA South, the agreement will bring to a close a two-year-old lawsuit in which developers Peter Hekemian and Michael and David Kasparian sought to erect 1,065 residential units in a commercial zone along Route 4. The development has been in the works for about a decade, hampered by the city’s approval process, a downturn in the economy and a dispute with a neighboring property owner over contaminated groundwater.

Attorneys for the developers declined to comment Tuesday night on the settlement or when their clients might approve it.

Resident Sandra Slipp was the only member of the public to comment on the proposal. She questioned how much of the $9.1 million that the city laid out to acquire a Starbucks and two gas stations on Route 4 to provide an access road would be repaid.

Englewood agreed to pay $1 million toward the acquisition, but Slipp said she hoped the city would be paid for the remaining cost and any interest accrued on the bonds.

Huttle said that is not part of the settlement, but City Attorney William Bailey said an assessment board has convened and hired an appraiser to determine how much each property owner who benefitted from the improvements would be charged.

The settlement details plans for the south property. City Manager Timothy Dacey said 350 units were already built on the north property. The 195 new apartments would have no more than two bedrooms per unit, according to the settlement.

Although the lawsuit was a result of the city’s not filing an affordable housing plan with the state, this project would not include any affordable housing.

“We had a situation that was bad. We worked hard to bring it to closure,” Huttle said.

Huttle said the project is estimated to bring in about $2.4 million more in taxes annually, not including the office building. Coupled with what is already built, he said the development could generate about $4.8 million annually in tax revenue.

“If you compare that to what was originally anticipated by the city, we are better off from a pure tax standpoint,” he said.

E-mail: hayes@northjersey.com

Englewood has struck a deal with ERA South to build 195 apartments, 15,000 square feet of retail shops and a hotel along Route 4. Here are some details: * The developer originally had approvals to build 45,000 to 55,000 square feet of retail space, but the settlement caps it at 15,000 square feet and no more than 10,000 square feet per building unless they construct a small grocery store or restaurant. * The settlement deletes “voluntary contribution payments” – up to $875,000 annually which the developers had agreed to pay in 2007 if permitted to build apartments instead of condominiums – because the courts have deemed them illegal. * Developers will pay the city $550,000 to cover legal fees associated with the lawsuit, according to the settlement. * Developers can seek certificates of occupancy on buildings as they are completed. Previous approvals had called for the developers to finish the entire project out of concern that only the residential portion would be built and the non-residential aspects could be abandoned. * The settlement stipulates that if the developers do not break ground on the hotel within four years of the plans being approved, the city would get the land. * The hotel will be a maximum of 10 stories, with 140 to 225 rooms, according to the settlement.