REAL ESTATE & CONSTRUCTION REPORT: ALONG THE RAILS
When the 110-residential unit Waldwick Station opened next to the borough’s train station in Novem-ber, Mayor Thomas Giordano announced that the municipality looked forward to welcoming the new residents.
That’s the kind of message that Ed Russo, president of Russo Development, likes to hear.
“When you’re building near a train station, the locations tend to be in the downtown area of a municipality,” Russo said. “That’s good, because that’s where many people want to go these days. But remember that maneuvering space will usually be tight, so the construction logistics are likely to be more challenging. On the other hand, if the downtown area has been designated as one that’s in need of redevelopment, the permitting process can be much easier.”
Russo development partnered with Dinallo Construction Corp. to build Waldwick Station, a four-level luxury rental complex with studio, one- and two-bedroom floorplans aimed at younger couples and empty nesters.
It went up on the site of the former Demartini Lumber Yard, which was “vacant, dilapidated and under-utilized,” according to the minutes of a Waldwick Zoning Board review.
“This development represents a direct benefit to the community and achieves a transit village concept in and around Waldwick and is a far better alternative than an industrial use,” the board concluded. “It is not intended for a lot of families but for a good mix of residents.”
Inside, the apartments feature stainless steel appliances, hardwood floors, quartz countertops and other upscale trims. The pet-friendly community also encompasses Millennial-friendly touches like a clubhouse, a package concierge and an outdoor lounge, along with ground floor covered parking.
New Jersey is running out of spare space, so instead of traditional “greenfield” development of empty land, more people are embracing redevelopment of former industrial properties and so-called infill development — building on vacant or under-used parcels within existing urban areas. That’s according to a report issued by New Jersey Future, a nonprofit organization that promotes redevelopment and infrastructure investments.
But redevelopment projects and greenfield projects typically have different risk and cost factors.
“The perception – and the reality in many cases – is that redevelopment projects come with added costs and risks,” warned the NJ Future report.
“For example, the amount of time a project will take to complete is one of the factors a developer will consider when calculating risks and cost,” it noted. “Greenfield developments tend to move more quickly, thereby having a lower risk/cost associated with them, while redevelopment projects often take longer due to a variety of factors like land acquisition negotiations, zoning variances and the like. Land costs, another important developer consideration, tend to be higher for redevelopment projects because they usually involve negotiating with multiple landowners and involve greater complexity.”
“Most of our transit-oriented projects are located in redevelopment areas,” said Russo, referring to designated sites that may qualify for streamlined permitting and other incentives. “There are many benefits to this designation,” including the potential to qualify for a payment in lieu of taxes, or PILOT, program.
That doesn’t mean the process is always easy. It took more than three years of talks with the municipality, and a court dispute with Kean University, until Russo’s mixed-use redevelopment project, Vermella Union — on the 55-acre former Merck site in Union Township —could break ground in late 2017.
“The site is near both Kean University and the Union Train Station,” said Russo. “It offers a short commute to destinations like New York City, Jersey City and Newark,” he said.
The mixed-use development is being constructed in phases, and plans call for 1,264 rental units comprised of one-, two-, and three-bedroom apartments with gourmet kitchens and other upscale features.
“Residents will enjoy the conveniences that come with living in a community situated at Union’s train station that contains exquisite community amenities along with about 35,000 square feet of lifestyle retail,” said Russo.
Other Russo transit developments in progress include Vermella at Garwood Station, which recently broke ground and is “ideally situated on the New Jersey Transit line.”
That mixed-use development will rise on a former Alcoa Corp. manufacturing plant site. To get enough room for the 290-plus units — and 18,000 square feet of retail — planned at Garwood Station, Russo said he had to work hard and assemble and integrate four separate sites from 2014-2017. Upon completion, the apartments will offer “luxury community amenities” like a pool, fitness center with yoga room, and a clubroom with a media room and golf simulator.
When apartments are placed along a rail line, “the project needs special considerations,” Russo added. “We spend a ton of time and money evaluating acoustical engineering and other issues. You end up building it very differently from a non-transit project.”
At the Waldwick site, which is about 40 feet from the rail and has 600 feet along the track, “the windows have a very high [soundproofing] rating and enhancements like wall acoustical clips to help further isolate any sound.”
The demand for transit-centered housing “appears to be a long-term one,” Russo added. “We’re continuing our focus on projects that are close to transit hubs, with many in urban areas.”