Real Estate

Berkeley Heights Tab for Acquiring Little Flower Property in Land Swap Placed at $2.8 million

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  Real estate appraiser Paul Beisser outlines his methods for assessing the Little Flower and township-owner properties involved in the proposed "swap."   Credits: Bobbie Peer
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Real estate appraiser Paul Beisser outlines his methods for assessing the Little Flower and township-owner properties involved in the proposed "swap." Credits: Bob Faszczewski
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Berkeley Heights residents pack the audience for Monday's hearing on the Little Flower proposal. Credits: Bob Faszczewski
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Updated Thursday, Sept. 18, 2014 at 9:10 a.m.

BERKELEY HEIGHTS, NJ—The township would have to come up with at least an estimated $2,845,000 in order to acquire land currently housing the so-called “Upper Campus” of Little Flower parish in a “land swap” that possibly will result in a new municipal complex being built on the site.

That was the figure given in a memorandum of agreement that is forming the basis of negotiations between the township and the parish. That memorandum would expire on April 1, 2015 if the parties do not sign a formal sale agreement.

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The values used in reaching the sum were outlined by real estate appraiser Paul T. Beisser of Value Research Group (VRG) at Monday’s first hearing into the discussions currently underway between the township and the Roman Catholic parish.

If a purchase agreement were to be finalized between Berkeley Heights and the parish, according to Beisser, the township would acquire a 15.6-acre site bordering on Hamilton Avenue that currently houses a former school building and the church rectory. The parish would take over the 1.33-acre site adjacent to the Little Flower Church on Plainfield Avenue on which the Berkeley Heights Public Library currently is located.

However, according to township attorney Joseph Sordillo, the state’s Local Land Buildings Law allows municipalities to exchange land with private entitiies, but the exchange must take into account the “full and fair value” of property to be exchanged after both entities have appraisals done on the parcels.

Since, in the proposed exchange with Little Flower, the township would be getting property worth more than the property it would be giving up if would have to pay the parish the difference.

The township’s appraisal was done by Value Research Group and Little Flower’s was done by Ard Appraisal Company.

In a May 20 letter to Berkeley Heights Township Administrator Linda Cavanaugh, Beisser said VRG placed the value of the Little Flower property at $4,000,000 and the value of the township library at $1,710,000. Using a somewhat different methodology, Ard set the value of the Little Flower property at $4,500,000 and that of the library property at $1,200,000. Based on those estimates, the amount the township would have to pay could range from $2,290,000 to $3,300,000.

Based on the fact that the township would need to make repairs to the Little Flower property to make it more useful to the township and in consideration of Ard’s considerations in making its proposal, Beisser, in the letter,  said the township should place the Little Flower property value at $4,162,000. Using similar yardsticks for the library property, the township appraiser set a value recommended for the library property at $1,296,000, resulting in a possible township payout of $2,866,000.

The township council has set the following additional hearings on the land swap discussion:

  • September 22 to discuss the agreement between the township and the public library as well as discussing the deficiences in the current library and what is needed to correct them, review of construction cost estimates for the library.
  • September 29 to recap the redevelopment study prepared by Harbor Consultants, the planning firm employed by the township which waz the first step in the Little Flower discussion. There also will be discussions and future needs for the police and public works departments along with a review of construction cost estimates.
  • Octobert 6 to present the draft of the redevelopment plan for the site, the impact of payments in lieu of taxes, a schedule for the project and conclusions on steps needed going forward.

All hearings will be held in the municipal building beginning at 7 pm.

In introducing Monday’s hearing, Michael Mistretta of Harbor Consultants noted Little Flower approached the township in May 2010 with the proposal for the land swap.

Mistretta said the memorandum of agreement between the township and the parish enabled discussions to proceed but it did not, in any way, finalize an agreement for the purchase.

Outstanding questions remaining, he said, include what the township was going to do with the current municipal building and the impact of the “swap” on township taxpayers.

Other items addressed in the memorandum of understanding, he said, are how the library facilities would be temporarily located during construction of a new facility, the status of the statutorily-required millage that the township must raise in support of the library and how much of any excess millage collected by the library could be used to offset some of these costs and overall funding for purchase and development of a new municipal complex on the Little Flower site.

In addition, the memorandum of understanding allows for the township to address any issues it may have with the Little Flower site.

Mayor Joseph Bruno announced that future hearings also will deal with other options that have been discussed for dealing with deficiencies in the current municipal complex facilities.

Contingencies included by Little Flower in the memorandum of understanding, the planning consultant said, are: Archdiocesan approval for the parish to undertake the plan, improvement of the current church and the library property should the plan go forward and any issues the church may have with the library property.

Sordillo said the memorandum also provides that all litigation surrounding the land swap discussions and all appeals surrounding that litigation should be resolved before any land purchase agreement is signed.

A lawsuit by resident Thomas Foregger questioning execution of the process of the redevelopment area designation has been filed but has not been heard in the courts.

A suit by resident Carol Matula calling for an injunction that would prevent the land swap discussions from going forward is in the state appellate division.

Matula pointed out at Monday’s hearing that her suit also alleges that four members of the township council have a potential conflict of interest because they are members of the Little Flower parish and council president Jeanne Kingsley was an officer of the church when the discussions began.

Sordillo said in appellate court the parties are awaiting a ruling on whether the court will require oral argument. Settlement of all litigation could take up to a year, he said.

The township attorney also explained a reverter clause in the original deed under which Little Flower acquired its property from the township.

He said state court cases seem to support the contention that the parish is continuing to fulfill a requirement that its property be used for educational purposes or it would automatically revert to the township. The parish, he noted, continues youth education and some other instruction in the Catholic religion on the site.

He also said the reverter clause would not necessarily prohibit an entity without a direct educational purpose from purchasing the site.

Sordillo told Foregger although case law he used in researching his arguments about the reverter clause currently was not in the packet that would be distributed to the public about the Little Flower agreements he would add references to the case law to the packets.

Former councilman John Bonacci asked Beisser if Little Flower was getting a “bad deal” because the township, many years ago, had purchased a plot of land on Snyder Avenue which contained no buildings for $5 million while the appraisal on the Little Flower tract, which contains buildings, is only $4.5 million.

The appraiser replied 257 apartment units could have been built on the Snyder Avenue site, while the Little Flower site is restricted because it is in an oper space area.

Bonacci also urged the township to spread any plan involving improvements to the municipal complex over several years, doing a little bit at a time, in order to save on the expensive cost of bonding for future improvements.

THE HEARINGS ARE VIDEOTAPED AND WILL BE TELEVISED ON COMCAST 34 AND VERIZON FIOS 47. CLICK HERE TO DOWNLOAD DOCUMENTS.

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