Real Estate

Roseland Council Adopts Ordinances to Redevelop Sites for Apartment and Affordable Housing Use

ROSELAND, NJ—The Roseland Borough Council, facing a standing-room-only audience in borough hall, voted 5-1 on Tuesday to pass two ordinances that adopt redevelopment plans to replace two “functionally obsolete” Roseland office buildings with residential complexes totaling 440 units of which 88 would contain affordable housing.

The complexes in question are at 6 Becker Farm Road and 85 Livingston Avenue, inside an office park owned by the Mack-Cali Corporation.

Under the redevelopment plans, according to the council, the Becker Farm Road property would house 300 total units, of which 60 would be used for affordable housing, and the Livingston Avenue property would encompass 140 units, of which 28 would fall into the “affordable” category.

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The plan for the Livingston Avenue site also envisions a “high-end” hotel and “high-end” restaurant.

Both redevelopment plans are seen by Roseland officials as aiding efforts by the borough to meet its state-mandated obligation to provide affordable housing within the borough’s borders. The borough currently is involved in litigation designed to establish its “Fair Share Obligation” under New Jersey housing laws and the means to address this obligation.

“It is not a matter of whether more affordable housing will be built in Roseland, because it will be,” said Roseland Mayor John Duthie. “We can, however, determine for ourselves where we want that housing to be built.”

Duthie added that, in addition to the developers of the two office-complex sites, in the complicated affordable housing litigation, there are two “intervenors” who also would like to develop affordable housing in Roseland.

The mayor noted that the areas proposed for affordable housing by the intervenors would involve sites in the center of the borough—one on Harrison Avenue in the area of many existing single-family homes and the other on Passaic Avenue, near the borough’s Lester C. Noecker School.

He said the sites would encompass 15 and 26 acres in area. He added that housing built on either site would add to traffic congestion and existing infrastructure in the areas might not be sufficient to handle the increased volume.

Duthie also said the Becker Farm Road building, which is currently vacant, recently sold for $16.7 million, a price considerably below its original assessed value of $23 million. He said the Livingston Avenue site faced a similar decrease in value, due to the fact that suburban office parks are increasingly falling out of favor with potential business occupants. This includes another office property at 65 Livingston Avenue, which is in foreclosure.

The mayor added that the decreases in value of the two buildings have resulted in considerable settlements in tax appeals recently—shifting more of the borough’s property-tax burden onto residential property taxpayers.

He also said that although Roseland complied with all its past affordable-housing obligations and was given credit for supporting an eight-unit apartment for the Essex County ARC, the recent revision of statewide housing obligations by the courts has failed to recognize this.

“My concern is with the five times the amount of affordable housing we must built to get to the affordable housing number,” said Duthie.

He also said that the two office complexes are much better situated, in terms of existing infrastructure and the location of the office park, directly off Route 280.

Borough Council President Mark Vidovich added that it is possible that, if Roseland does not come to a fair-share housing agreement before a mid-September deadline imposed by the courts, it could face an obligation to build at least 466 additional affordable housing units in addition to the 66 such units that currently exist in the borough.

He pointed out, however, that, at this juncture, the borough does not have a solid figure as to what its affordable housing quota actually is.

If developers are allowed to produce 20 percent of each development in affordable units, he said this could result in 2300 additional homes in Roseland.

“I don’t want to see the town I grew up in, where I raised my family and where I plan to retire drastically altered,” said Vidovich.

Additionally, he said the “immediate need”—housing units that the borough must have built as soon as possible to meet its obligation—has fluctuated from 70 to 90 affordable units to 500 units to be built with 100 of them being affordable.

Vidovich also noted that the intervenor on the Passaic Avenue site wants to construct 150 units—something that would make an already congested and difficult turn on Passaic Avenue more difficult, he said.

The intervenor on the Harrison Avenue, he added, wants to construct 400 units in that area.

The council president also added that commercial real estate values in the borough have dropped more than $500 million in the last six years. He said he would be interested in the hotel proposal because it offers a chance to “rescue” the “dying breed” of an office park and make Roseland a more attractive destination.

William Northgrave, the attorney hired to oversee the borough’s development efforts, said the ordinances adopted on Tuesday would only provide the “boxes,” or outlines, for redevelopment of the two sites. He noted that formal redevelopment and financial plans would need to be implemented and agreed upon by all parties and any formal proposals would have to come before the borough planning board with site plans.

If the borough does not produce redevelopment plans, he said, state courts and the developers would be able to decide where affordable housing is to be located within the borough.

Roseland currently has a “stay” of court actions, he said, while it works out redevelopment plans. If it comes to an agreement with the courts and the Fair Share Housing Corporation, which is the advocate for those seeking affordable housing, before the mid-September deadline, it will stave off “Builders’ Remedy” litigation.

Northgrave explained that under Builders’ Remedy developers, it would be virtually able to dictate where and how affordable housing would be built.

Borough attorney Ethan Sheffet added that Builder’s Remedy litigation would enable developers to ignore Roseland zoning restrictions and build where they want to meet affordable housing quotas.

However, Claudia Reese of 4 Cooper Avenue, a member of the Roseland Affordable Housing Committee, said many communities around the state have satisfied their obligations without filing declaratory actions such as those filed by the borough.

She added that only 11 municipalities in Essex County have sought declaratory relief.

Reese also said that affordable housing standards dictate that the units be located near existing housing stock.

Several Roseland residents at the meeting questioned whether the payments in lieu of taxes (PILOTs) to be paid by developers such as Mack-Cali would sufficiently compensate the borough for increased infrastructure it would need to support the new housing developments.

They also noted that, since 95 percent of the PILOTs would be going to the municipality, the borough’s elementary schools and the regional school district to which it belongs would be shortchanged.

Northgrave said that, in his many years of experience, PILOTs, or annual service charges, as they more properly are called, more than made up for any added expenses brought into communities whose developers paid them in lieu of taxes.

He added that market studies have shown that developments such as those contemplated did not significantly add students to the school populations in host communities, and the additional students by and large came from the affordable housing portions of the developments.

The development expert added that although the schools would not be getting additional tax revenue, they would not be getting less revenue than they already had.

He also said that if the schools did incur more-than-anticipated expenses due to the expanded student populations coming from the developments they could negotiate with the borough to provide some of the PILOT revenues as an offset to them.

During the council discussion on the redevelopment proposals, Councilman Richard Leonard questioned whether the borough could receive information on whether the proposed residential units were to be purchased or rented and, if so, whether this made a difference in financial calculations.

He was told that although the developers had not specified whether the units were to be for purchase or rental, the assumption was that they were to be rental units and that it made little difference in the initial calculations.

Leonard also objected to the density of the two projects—at 28 units per acre.

When the vote came, he was the only governing body member to vote against the redevelopment ordinances.

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