On Tuesday night, the Berkeley Heights (“BH”) Township Council is scheduled to hold a public hearing to rezone the Connell Complex which would allow for an additional 100,000 square feet (“sqf”) of retail and 77,000 sqf of residential space on top of the existing office, hotel, residential, and retail uses. Under state law, the decision to change the zoning of the property is discretionary and lies solely with our governing body. While I’m generally in favor of the project, for the reasons explained below, it is absolutely not in the best interests of the Township for this approval to be granted now. 

Connell’s Expensive Tax Appeal Litigation:

While Connell builds high-end projects and has made some much appreciated charitable donations to BH causes, the fact is, they are a big business that is currently suing BH claiming that they have paid too much in taxes during 2016-2019; they have just filed another appeal for tax year 2020 looking for an even greater refund. This lawsuit has been going on for years at tremendous cost to the Township. In fact, BH just had to adopt another resolution authorizing the expenditure of additional monies to file a counterclaim in the defense of Connell’s lawsuit.[1]  Given the uncertainty associated with Connell’s lawsuit, we have no way of knowing what the net benefit of the taxes generated by the rezoning will be.  When BH loses or settles a tax appeal, the Township bears the entire cost of the refund even though the school district and Union County have already received the majority of the taxes (approximately 56% and 25%, respectively, versus the Township’s 19%).

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Unless and until Connell either withdraws or reasonably settles its lawsuit to the satisfaction of BH, the Council should not approve the rezoning—it’s the only leverage we have to end the legal costs and to understand exactly what the tax basis and any financial benefit/burden of the rezoning will be to BH.  A similar approach has worked before—In 2017, when Connell agreed to construct 45 new affordable housing units (see below), and two weeks ago when BH received $475K for a liquor license expansion which Connell was about to receive last year for free until the matter was pulled from the Council agenda following public comment.   

The Affordable Housing Impact is Unknown:

We have already seen firsthand the adverse impact attributable to the state-mandated affordable housing program. One of the major factors used in calculating the number of required affordable housing units is job growth within the Region and Township. Our expert has just concluded that it is impossible to know what the impact of the modified Connell retail project will be on BH’s affordable housing share during the next round in 2025, but that it could be as high as 23 units using this Round’s calculations.[2]  Why should the Township bear any of the risk related to this uncertainty?  As part of the rezoning negotiation process, the Township should require Connell to provide whatever additive affordable housing units are generated by the retail component of their project during the next Round—The payment of the standard 2.5% development fee alone won’t get us the units that we’ll need which means that the court will force us to find yet another project elsewhere within the Township to meet next Round’s obligation.  We don’t need another 150 unit condo/apartment project (to account for those 23 affordable units)—Connell has the room and the financial wherewithal to satisfy that obligation on their Site. 

Miscellaneous Adverse Consequences:

Traffic—It is already impossible to travel on Diamond Hill and Plainfield Ave/Bonnie Burn during rush hour. In 2017, when BH approved the residential project and capped retail use of the Connell Site in relation to the affordable housing settlement, Watchung threatened to sue us over the traffic generated by the project.[3]  The Township’s planner has said that traffic will be improved when compared to the office space that was approved decades ago. This analysis is misplaced—Connell has already said that given the existing office glut in NJ (which has only been exacerbated by the pandemic), the construction of additional office space is no longer financially viable.[4]  Therefore, the traffic analysis should be based upon what is there today, not versus office space that likely will never be constructed.  There is no doubt that traffic will worsen as a result of 177,000 sqf of additional retail/residential space—BH’s ability to remedy that at the Planning Board will be limited, and a light at Plainfield and Connell Drive will do nothing to reduce the regional traffic volume which already backs up from Scotch Plains.

Open Space—Much has been made about the open space that will be created as part of the project.  There will certainly be nice features (e.g., a dog park), if made available to all residents of BH. However, the fact is, every project of this magnitude contains open space and Connell will need such amenities to attract the residential tenants from the site anyway. In 2017, the retail/residential development density was intentionally capped by the Council and limited in area to prevent overdevelopment particularly in the absence of further benefits to BH.  The open space cannot and should not be used as the sole basis for approving the rezoning in the absence of other significant concessions.

The Connell project has the potential to be a “win-win” for both sides. However, unless and until BH obtains further concessions from Connell and equitable resolution of the above issues, the Council should not approve the rezoning.

Stay safe and be well.

Marc Faecher--Resident and Former Councilman BH (2015-2017)