The City Council last week introduced an ordinance to purchase the vacant Beverage Shop building from the Rahway Center Partnership (RCP) after Dornoch defaulted on its agreement to acquire it. A public hearing and final approval is scheduled at the council’s regular meeting on March 8.
The Partnership bought the one-story structure at 52 E. Cherry St., (Block 318, Lot 18) in April 2001 for $130,000, and had an agreement in July 2006 to sell it to Dornoch. The property was to be part of the developer’s downtown plans and RCP, as I understand it, acquired it at the time as a way to control problem properties/tenants, with the intention of it becoming part of the larger plan. In late 2007, Dornoch presented plans to the Planning Board to knock down several East Cherry Street properties — including The Beverage Shop — and build a new four-story structure as part of what’s sometimes referred to as Dornoch II 1/2.
Dornoch, which also planned two other projects that have since stalled — The Savoy and The Westbury — has defaulted on its agreement and payments of almost $8,000 to RCP. Annual property taxes on the building are more than $6,700, according to property records, which haven’t been paid for the last two quarters, according to City Administrator and Redevelopment Director Peter Pelissier.
The City Council also approved a contract with Prime Appraisal to appraise the property and the ordinance opens the door for negotiations. The building has been vacant for a few years and its condition is unclear, Pelissier said. The city plans to assume the agreement with Dornoch, put a lien on the property and likely list it for sale.
In addition to Dornoch defaulting on its agreement, the Partnership lost funding from Merck and NJ Transit and faces some major structural changes in its future which will be detailed in the next post.