Government

$10M Sale of Trackside Property Paves the Way for 31-Acre NJ TRANSIT Village Residential/Retail Development

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NJ TRANSIT has sold a 31-acre site adjacent to its rail station in Somerville to Somerset Development. Credits: Rod Hirsch
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NEWARK, NJ – A long-dormant agreement to develop 31 acres adjacent to the Somerville Train Station was approved by NJ TRANSIT Wednesday morning, jump starting a massive project that will create a mixed-use NJ TRANSIT Village with apartments, townhouses, ground floor retail space and a parking deck adjacent to the Raritan Valley Line.

Somerset Development LLC will pay $10M to NJ TRANSIT to purchase the property. Preliminary plans submitted to NJ TRANSIT and the borough in August, 2014 call for construction of 765 residential units, ground floor retail/flex space and a parking deck to accommodate 440 cars. The developer must also reserve additional property for a second parking deck, according to the resolution approved by NJ TRANSIT.

Mayor Brian Gallagher and Colin Driver, the borough’s Economic Development director emphasized the significance of the resolution passed by NJ TRANSIT at its meeting Wednesday morning.

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“This is the largest open piece of property next to a transit station in the state of New Jersey,” Gallagher said. “It’s probably the largest transit oriented development in the central Jersey region,” he added.

“It’s been a very long time in coming,” he added.

Driver expects discussions between the borough and the developer will begin immediately.

The borough will oversee and must approve the developer’s plans as the project unfolds.

Driver estimates it will be at least 18 months before there is any construction.

Ralph Zucker is the president of Somerset Development, a highly-respected real estate development company in the New York metropolitan area. The developer is transforming the former Bell Labs complex in Holmdel to a mixed-used development.

Zucker’s company is also working with NJ TRANSIT to build Wesmont Station, a new train station that will help transform the site of a former aircraft plant in Wood-Ridge into a 70-acre, mixed-use transit hub that will include 1,200 homes and commercial space in Bergen County.

“The mission of Somerset Development is to re-imagine, reposition, and redevelop sites that will improve quality of life while evoking a genuine sense of culture and soul,” according to the website. “Led by a team of seasoned development professionals, Somerset creates dynamic ecosystems that generate public stewardship, catalyze economic growth, and sustain natural ecologies.” 

Gallagher emphasized that the NJ TRANSIT Village should complement, not compete against the emerging downtown shopping and dining district.

“We don’t want to cannibalize the downtown,” Gallagher said. “We’ll help to create a development that will have a positive effect on downtown, that drives people and pedestrians to go downtown,” he added.

The 31-acre NJ TRANSIT property is a critical piece of a larger mosaic that promises to elevate the quality of life for borough residents, while providing opportunities for economic growth and increased tax revenues for the borough, which now has the highest residential tax rate in Somerset County.

The borough will derive millions in tax revenue from the project, according to Driver.

“We’re on our way to the landfill providing tax relief the Somerville taxpayer,” Gallagher said.

The NJ TRANSIT Village property is part of the former Somerville Landfill and is adjacent to a 30-acre tract owned by the borough that will undergo environmental remediation over an 18-month period beginning in the spring.

Tainted soil will be removed and groundwater continually filtered before draining into the nearby Raritan River. Not suited for development, the wetlands will be transformed into a passive-use park, with bike paths, hiking trails and other environmental features, according to Gallagher. The borough obtained grants totaling $12 million from the state Department of Environmental Protection for the clean-up.

The former landfill is bounded by the Raritan Valley Line, South Bridge Street and Route 206. The borough also owns the balance of the landfill property, including one-half mile frontage along the state highway. There are no immediate plans to develop that portion of the landfill property.

“Today was a landmark day,” Driver said. “We will see a lot more chatter and discussions in the coming weeks as reality sets in that there are two major projects about to get under way affecting the largest piece of developable land in Somerset County.”

The resolution approved by NJ TRANSIT listed the benefits of the project:

“Transit-oriented development (TOD) adjacent to Somerville Station will maximize the value of NJ TRANSIT’s underutilized, largely vacant real estate asset. Planned development will enhance commuter access by providing improved roadway and uninterrupted pedestrian access to the station and a parking deck to replace the existing 425 surface parking spaces.

“The planned development improvements will complement NJ TRANSIT’s $15.3 million renovation and high-level platform project, completed in 2012.

“Average weekday boardings at Somerville totaled 711 customers in FY 2015.”

The resolution continues: “TOD on NJTRANSIT’s property at Somerville will enhance economic development, promote the use of the recently-improved station, together with the potential to boost ridership and revenue and reduce dependency on auto trips into destinations such as New York City.”

Title to the NJ TRANSIT property will be passed on to Somerset Development in phases, according to the resolution approved by the NJ Transit board.

The developer will lease the property where the parking deck will be built and pay NJ TRANSIT $93,000 annually until the deck is completed. Once it begins operation, the developer will pay a percentage of parking fees to NJ TRANSIT for a period of 37 years.

In 1987, NJ TRANSIT entered into an agreement with a developer, signing a 29-year lease, but the agreement was terminated. In 2005, NJTRANSIT worked with the borough to establish a TOD vision plan for the property which was adopted in 2007. The economic downturn that followed stalled progress.

IN 2012, NJ TRANSIT selected Somerset Development as its preferred developer for the property. A Memo of Understanding was signed in August, 2014.

The New Jersey Department of Transportation designated Somerville as the 22nd Transit Village community in the state in 2011 in recognition of its ongoing efforts to create walkable, mixed-use neighborhoods near public transportation centers.

Several communities along the Raritan Valley Line including Bound Brook, Plainfield, Cranford, Westfield and others have seen a resurgence in multi-unit developments on tracts adjacent to or in proximity to the rail line.

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