Stalled Newark plan draws lawsuits
Foundation wants properties returned
Thursday, September 27, 2007
BY MAURA McDERMOTT
Star-Ledger Staff
Prudential Insurance and a pro-Newark foundation are suing the city's
top downtown developer, charging the builder with dragging its feet on
creating a massive downtown apartment village.
Cogswell Realty Group paid the New Newark Foundation $20 million five
years ago for two dozen buildings and vacant lots near Military Park.
New Newark is funded by Prudential and foundations backed by
philanthropist Raymond Chambers. Prudential financed the deal.
Cosgswell, the New York-based builder celebrated for renovating 744
Broad St., Newark's tallest building, promised to begin redevelopment
by June 2006, according to the two lawsuits filed last month.
But instead of redeveloping the mostly vacant properties, a division
of Cogswell "has left the property 'as is,'" according to court papers.
New Newark is demanding the return of the buildings and land, long
viewed as critical for Newark's revival.
The foundation "has one intention: to see the area redeveloped," said
Burton Eichler, the group's vice president. "Either get them to do
what they said they would do, or give us our property back."
In a separate lawsuit, Prudential is seeking to foreclose on the land.
Cogswell borrowed $17 million from Prudential at 5 percent interest,
according to court documents. A Prudential spokeswoman declined to
comment.
The redevelopment "would have done what you've seen happen in Hoboken,
what you've seen happen in New Brunswick," said John Petillo, the
foundation's president. "It's disappointing, because it really would
be a very visible sign of a renaissance of the city."
The development area is off Broad Street, the city's main business
thoroughfare, near the New Jersey Performing Arts Center, and the
Prudential Center Arena, which is scheduled to open Oct. 25.
Cogswell's chief executive, Arthur Stern, said it takes time to draft
plans, get financing and earn approvals.
"The redevelopment of an area takes sometimes months or years prior to
a shovel actually hitting the pavement, and that process began the day
we purchased the New Newark portfolio," said Arthur Stern, Cogswell's
chief executive.
Stern said Cogswell had to spend $120 million to remake the
long-vacant 1180 Raymond Blvd. before redeveloping the other
properties since the firm could not get financing and other support
for more than one Newark project at a time, Stern said.
The 317 apartments on Raymond Boulevard are nearly two-thirds rented,
with more than 20 new leases signed each month, Stern said. The
Raymond Boulevard site also includes a gym, lounge and bowling alley.
Cogswell is moving ahead with plans to create 600 rental and
condominium units and 60,000 square feet of retail at the former
Hahne's department store, among other projects, he said.
"Our overwhelming feeling in this whole thing is sadness," Stern said
of the lawsuits. "We believe that no one has been more committed to
development in this city than we have, and it's a shame that we find
ourselves in litigation."
A city spokeswoman, Lupe Todd, said the city needs the housing, jobs
and tax money that come with building new homes and stores.
"Economic development is critically necessary," she said in an
e-mailed statement. "It's vital to hold developers accountable to do
the development that they agreed to do."
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/AsburyPark/
<*> Your email settings:
Individual Email | Traditional
<*> To change settings online go to:
http://groups.yahoo.com/group/AsburyPark/join
(Yahoo! ID required)
<*> To change settings via email:
mailto:[EMAIL PROTECTED]
mailto:[EMAIL PROTECTED]
<*> To unsubscribe from this group, send an email to:
[EMAIL PROTECTED]
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
