St. Rose closed last week on the purchase of 710 Main Street, the vacant lot at the northeast corner of Eighth Avenue and Main Street. This property has been owned by the Aaron family (through a family-owned corporation called ERBA, Inc.) since the lot was home to a Packard dealership some 80 years ago. The purchase price for the vacant lot was reportedly $1.9 million. Prior to deciding to sell the property, ERBA had been working with developer Pyramid Properties to develop a mixed-use project on the site. The Borough’s Technical Design and Review Committee approved plans in January for a proposed a mixed-use development, consisting of several first floor retail shops and 29 one-bedroom units. Although that approval cleared the way for the developer to submit plans to the Planning Board, the developer never did so.
I called Jim Aaron, whose family owns ERBA, a few weeks ago when I first heard rumors that the property was under contract. Jim, who is the City Attorney in Long Branch and the Redevelopment Attorney in Asbury Park, explained that his family’s decision was a difficult one, as he was very excited about the opportunity to participate in Belmar’s redevelopment. He explained that his family’s decision to sell was motivated by several factors: higher-than-expected environmental clean-up costs, the severity (and likely duration) of the downturn in the real estate market, and uncertainty over the obligations developers will have to contribute to affordable housing under the State’s newly adopted COAH regulations, which will likely be mired in litigation for some time. While Mr. Aaron expressed personal disappointment that he would not be redeveloping the site, he explained that under the circumstances, this was the best financial decision for his family members as a whole.
I met this week with St. Rose High School principal, Dr. Michele Campbell, to discuss the property. She explained that St. Rose High is in the process of organizing a committee to develop long term plans for the site. While those plans will ultimately depend upon the availability of donations and other financing, one of a number of possible concepts being envisioned is an “arts, athletic and scientific center” that would serve as a magnet for future generations of students. Dr. Campbell said the centerpiece of such a building would ideally be a performing arts theater that would be a benefit to our community as well. In the short term, Dr. Campbell advised that while the committee works on a long-term plan for the site, SRHS would be taking steps “in the spring” to remove the construction fence and beautify the site. She said St. Rose would be also be open to considering interim uses for the site that would provide an attractive use of the property, benefit Belmar’s downtown and also generate some income from the property. We agreed to discuss that idea further. In the meantime, the property is undergoing remediation to resolve contamination issues on the site. St. Rose is hopeful that the NJ DEP will issue a “no further action” letter this winter, so that beautification efforts can proceed this spring.
It’s too soon to tell what kind of impact this sale will have on our plans to revitalize Belmar’s downtown. Given St. Rose’s status as a 501(c)(3) educational institution, it’s likely this sale will result in the removal of the property from our property tax rolls and the loss of local tax revenue, beginning perhaps as early as next year. In 2008, the property yielded $9,855 in taxes for the municipality ($4,732) and the Belmar School District ($5,123). Obviously, the forgone tax revenue Belmar would have realized if the property had been developed according to the plans submitted by Pyramid Developers is considerably greater. But everything happens for a reason, and we’ll just have to see how this one turns out.
Depending upon how St. Rose decides to develop the property, the loss in tax revenue may not be a permanent one. St. Rose’s decision to acquire the property is undoubtedly a smart one for the school. Because St. Rose already owns parking lots that abut the 710 Main Street lot to the north and east, this property is more valuable to St. Rose than it is to a developer. By acquiring this prime corner lot, St. Rose now has maximum flexibility as it plans for its future. The combined tract even creates the potential for a larger mixed-use project that could include income-generating commercial and/or residential uses that would help offset the cost to St. Rose of building an arts and athletic center. (The possibility would provide a creative alternative to covering 100% of the cost of any expansion project solely through donations and loans). Several years back, St. Rose, under the leadership of then-pastor, Monsignor Casimir (“Casey”) H. Ladzinski and other parish representatives, had tentative discussions with the Gale Company about the possibility of a joint development of the corner lot and adjoining St. Rose parking lots along those very lines. While those discussions did not bear fruit, St. Rose’s acquisition of the site preserves the school’s options to revisit this concept in the future. It’s important to keep in mind that in the event a mixed use approach were to be pursued, the portion of the property developed for non-educational uses would be subject to local property taxes, notwithstanding St. Rose’s 501(c)(3) tax-exempt status.
There are three other bright sides to this transaction: First, the $1.9 million purchase price is a good one for a vacant downtown lot, and will help the Borough defend its downtown property tax assessments against any commercial tax appeals based on claims of a softening real estate market. Second, St. Rose has long been a good citizen of our community and a supportive and cooperative partner to the Borough. Dr. Campbell’s promise that St. Rose will improve the appearance of the site in the spring is one we can count on. Third, and most importantly, this acquisition bodes well for the long-term success of St. Rose High School, which is important to our downtown. In an era when parochial schools are increasingly finding it difficult to keep their doors open, it is heartening to see that St. Rose’s leaders are sufficiently confident in the school’s future to invest in it in such a demonstrative way. In addition to its many spiritual, educational and charitable contributions to both our Belmar community and our society at large, St. Rose contributes to Belmar’s downtown in a more basic way. St. Rose High School is Belmar’s largest non-governmental employer. Each year St. Rose High’s 95 teachers and employees (many of whom live in Belmar), its nearly 600 students, and the parents who bring those students to school and who attend the countless after-school events, pump hundreds of thousands of dollars into our downtown economy. This source of revenue for Belmar’s downtown is particularly vital because it comes mostly during the winter months, when our restaurants and shops need that boost the most. If the high school realizes its dream one day of building an arts and athletic center on the site, the economic benefits to Belmar’s downtown could dwarf whatever benefit we would likely have derived from the project originally planned for the site.
So, while this transaction means we will lose some property tax revenue in the short term, St. Rose’s decision to make such a large investment in Belmar’s downtown sends an unmistakeably positive signal to any potential developer or retailer that St. Rose High and its considerable spending power is committed to Belmar’s future and will continue to support Belmar’s downtown for decades to come.
