Tag Archives: Dornoch

taxes

No tax abatement for The Savoy, Dornoch

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News that the Plainfield City Council last month was asked by the administration for a five-year, 40-percent tax abatement for a Dornoch project in that city has prompted questions from readers in recent weeks about whether the Hillside-based developer will seek the same for The Savoy on Main Street. (The Plainfield governing body was scheduled to entertain the measure at its meeting last night.)

City Administrator and Redevelopment Director Peter Pelissier said Dornoch had requested abatements in negotiations this past summer, but he said he rejected it, with no plans to entertain the idea.

The only recent tax abatement awarded by the City Council was about five or six years ago when Park Square was still just on the drawing board. Landmark Developors will pay 20 percent of the assessed value of the property in the first year it’s on the tax rolls (2009), and 20 percent more each year until 100 percent is reached. Pelissier said the city tax assessor is in the process of compiling the first assessment for the property, which would mean it would be paying 100 percent property taxes by 2013. The project broke ground in 2007 after several years of land acquisition and other work for the development.

Also, this interactive map from P and F Management (a subsidiary or parent entity of some kind for Dornoch and its projects) is another indication that The Savoy may become rentals, something with which the city probably would not have a problem considering the real estate market and other projects going rental.

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Temporary parking until deck is built

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The Redevelopment Agency last week approved a memo of understanding with the Parking Authority and Dornoch to create temporary surface parking at the future site of The Westbury.

Dornoch and the Parking Authority will swap some parcels to create temporary surface parking that will be leased to the Parking Authority. “Temporary” essentially means until a parking deck is constructed, which could be several years.

City Administrator and Redevelopment Director Peter Pelissier estimated about 100 more spaces could fit on the property, in addition to the existing 80 or so existing spaces near Lot B. The move will allow some motorists who lease spaces from the Parking Authority at St. Mary’s on Central Avenue to move closer to downtown, he said. Leasing the temporary surface parking would provide Dornoch some cash flow as it builds The Savoy across the street (where there has been virtually no activity in a year) and pays some $30,000 in property taxes on The Westbury site alone.

The resolution and memo of understanding is meant to convince Dornoch’s investors, a hedge fund based in Holland, that The Westbury is a reality and provide them with a level of comfort to secure additional investments and financing for The Savoy. Should investors not be comfortable with prospects for The Westbury, they don’t believe they would get enough return on The Savoy alone, Pelissier said. “They’ve invested a lot,” he added and would be more comfortable knowing the Redevelopment Agency won’t back out of The Westbury project.

Also referred to as Dornoch II, The Westbury originally was envisioned as a 140-unit development along Main Street behind the East Cherry Street storefronts. The project also included 20,700 square feet of commercial office space and 19,2000 square feet of retail, with an adjacent 350-space parking deck.

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Dornoch: Savoy to begin in a month

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An nj.com report this week quotes Dornoch managing partner Glen Fishman claiming that work at The Savoy is expected to begin within 30 days. It’s been almost a year since steel went up at the site at the corner of Main and Monroe streets.

Dornoch had to replace a lender who backed out, according to the report. Their other planned development, The Westbury, will follow. “You’re never going to get financing for a 150-unit building [Westbury] until you sell out your 36-unit building [Savoy],” Fishman told nj.com.

City Administrator and Redevelopment Director Peter Pelissier still stands by Fishman even though Dornoch has not built anything yet. Something ultimately will be built at The Westbury site though not in the immediate or near future, he said during a progress report to the Redevelopment Agency board last month. Pelissier offered commissioners an overview of projects around town over the past decade, adding that “every project may not materialize as originally conceived.”

Dornoch “did come in and buy up some nasty properties,” Pelissier said, suggesting that the site for The Westbury be acquired by lease for temporary surface parking in the meantime.

Though he said he’s not positive it will be built, in a meeting as recently as June 30, Pelissier said Fishman gave verbal assurances that they would move on The Savoy. A forebearance letter from Wachovia bank, which restructured the deal, should give comfort to Dornoch’s financial backers, Pelissier said.

Assuming 18 months for construction, if The Savoy does begin this month, you’re talking early 2011 before focus shifts to The Westbury site.

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The Savoy: “Not dead”

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The developers of The Savoy are still in search of financing, but the project is “not dead,” according to City Administrator and Redevelopment Director Peter Pelissier. Briefing commissioners during last week’s Redevelopment Agency meeting, Pelissier said Hillside-based Dornoch/Maplewood Homes is still waiting to get a financial commitment.

The 36-unit project proposed at 1562 Main St. hasn’t seen any activity since last summer.

Not dead yet. Sort of reminds me of the Will Ferrell character from the 1997 movie, Austin Powers: “No, not dead. Burned. Badly.”

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Still quiet at The Savoy

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With no work going on at The Savoy, now there’s not even any word from its developers.

Redevelopment Director and City Administrators Peter Pelissier reported at last month’s Redevelopment Agency meeting that the agency’s attorney has been unsuccessful in reaching attorneys representing Dornoch Holdings.

Pelissier said Dornoch is represented by Al Faiella, who for what it’s worth had some interesting dealings in Newark redevelopment.

Given the market, the guess here — and that’s all it is — is that The Savoy will go the way of other projects and shift to rentals. That would require an amendment to its redevelopment agreement, which would need approval from the Redevelopment Agency. The credit crunch has done the same thing to other projects in Rahway. Another Dornoch project, The Lofts, shifted to lease-to-buy options with three of the four units signed up at Irving and East Cherry streets. (Here’s an AM New York report about condo inventory rising amidst slumping sales in New York.)

Pelissier reported at the last Redevelopment Agency meeting (Nov. 12) that the mayor, in speaking with Dornoch principal Glen Fishman about the burned out East Cherry Street property, indicated he’s interested in selling and there may be a buyer.

Dornoch received approval last year for a plan to renovate that site, where a fire occurred some five years ago. Dornoch also acquired a strip of East Cherry on the other side of the street, along with multiple properties along Main Street in anticipation of The Westbury. That project is essentially on hold as the city and Parking Authority move forward on their own with the parking component.

Dornoch had been considered for the Hamilton Street project that would rehabilitate the Shami Apartments for senior and/or artist housing and turn the Bell Building into an arts space but you can expect that redeveloper’s designation will expire and another developer sought.

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Condos, Downtown

The Savoy at a standstill

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Just a few months after steel began to rise at The Savoy, the developer that’s heading up several projects in the city has apparently run into unspecified “economic difficulties.”

Continue reading The Savoy at a standstill →

Downtown, Parking, Rahway

Study to evaluate parking deck, needs

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A consultant will evaluate downtown parking needs, including the feasibility of constructing a deck on Lot B (behind East Cherry Street) and adding two levels to the Main Street deck. A preliminary report to the Parking Authority is expected by the end of the year.

Until the residential housing meltdown of the last several years, the parking deck at Lot B (photo, below left) was to be part of The Westbury by Dornoch, which is also constructing The Savoy. Original plans included a 324-space, five-story parking deck, 150 condos and 17,000 square feet of ground-floor retail space.

Instead, the Parking Authority and the city will take the lead on the Lot B garage. City Administrator and Redevelopment Director Peter Pelissier said the developer would be back-charged for each unit that would require a space in the deck. Changes also will require renegotiations to the redevelopment agreement with Dornoch, which could take several months, said Redevelopment Agency attorney Frank Regan.

Developers have spent about $5.5 million in recent years to assemble properties for The Westbury project, according to Regan. That total could surpass $7 million once they acquire the Greek-American Deli on Main Street and a Parking Authority parcel, he added, and so the project has simply become too cost prohibitive to put together at this point.

In an interview after last week’s Parking Authority meeting, Chairman Matt Dobrowolski said there’s already been discussion with the city administration about a possible third location for a parking deck. “We’re looking long-term, not just the Dornoch project,” he said. Adding two levels at the Main Street deck (photo, right) is more difficult with Carriage City Plaza now constructed, he said, but they have the ability to do it although it won’t solve the Lot B issue.

The Main Street deck took about a year to erect and Dobrowolski expects the same timeline with the Lot B deck. Opened in December 2004, the six-story, 524-space deck cost $11 million — $3 million of which is to be paid back to NJ Transit.

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