A 32-acre plot known locally as the Golden Triangle is slated to be transformed into Cornerstone at East Brunswick, a transit-centric mixed-use community in central New Jersey that, as planned, would include 402 condos. According to local sources, prices would start in the $350,000 range. The redevelopment plan, though, has been a political football for decades, most recently during the township’s mayoral race, whose victor has occasionally expressed reservations about it in the past.
Toll Brothers, which owns the site, declines to discuss Cornerstone’s timetable. “It’s an extremely complex project with many different moving parts, but at this time we have no comment,” Kira McCarron, the builder’s vice president of marketing, told Builder a few days before the mayoral election on Nov. 4. The current dismal state of the housing market lurks behind any decision to move forward, but Toll has negotiated a deal that conceivably could make money for the company even if it walks away.
Change in plans
East Brunswick, a bedroom community of around 50,000 people, has been pondering what to do with the Golden Triangle since the late 1970s, well before 2005 when Toll agreed to pay $35.4 million to purchase the land from the township. The parcel is sandwiched between a highway and a service road, with strip malls to its right and left and across the highway, and a sprawling industrial park to its rear. The site includes a bus terminal for township residents who commute into New York and Jersey City. There’s a 300-acre landfill a half mile to the north.
Bill Neary, who decided not to seek re-election after 12 years as mayor, recalled that the township started rethinking the Golden Triangle’s redevelopment in 2003, five years before the township’s 30-year lease would expire. At the time, the site was being used by a 60-vendor flea market that had been a local institution for three decades; a furniture store; and a Sam’s Club, which pays the township just under $500,000 per year in rent, “well below market rate,” laments Neary. (The flea market closed on Nov. 2; Toll extended the leases for the furniture store and Sam’s through 2010.)
Originally, Toll offered to build a transit village with 500,000 square feet of commercial and retail space in 15 buildings. The village would have included between 210 and 230 age-restricted homes and three parking garages. When completed, the redeveloped property was projected to yield $3 million in annual tax revenue. But market forces changed all that. A glut of office space in the area forced Toll to reconfigure Cornerstone. The proposal that East Brunswick’s planning board approved last April now includes 185,765 square feet of retail and restaurant space, no office space, and 402 condos without age restrictions. (On top of the $30.4 million it is paying for the land and $5 million to build a community center, Toll agreed to pay the township a one-time $20,000 fee for every school-aged child who moves into Cornerstone.)
Promises, promises
Opponents of the Golden Triangle redevelopment have long accused the township of striking a hasty deal with Toll Brothers to close a $4 million budget gap. Toll has been paying down its land purchase in $4 million per year increments. It should be fully paid up by 2011. But the township earlier this year extended the builder’s schedule for completing Cornerstone to 2015. That means tax ratables might not be in place for several years, leaving the township with a revenue shortfall. And if Toll decides to walk away from this deal, it gets back its money plus 8 percent interest.
Critics chafe as well at the $32 million East Brunswick shelled out to build a 1,681-slot parking garage for commuters and future residents of Cornerstone. (Neary says the township will pay for the garage’s construction with parking fees and contracts with bus companies using the depot. The township opened the garage on Oct. 1 and will pay Toll $1 per year in rent. It has a 60-year lease with a 30-year option.)
One mayoral candidate in the recent election, Christi Calvano, is against building more houses in an area whose roads are already badly congested. Calvano also doesn’t buy the township’s promises about leasing space to high-end retailers. She points to another strip mall redevelopment, about a mile south of the Golden Triangle, for which the township made similar promises; in November, the first two stores to open there were Toys “R” Us and Babies “R” Us.
David Stahl, East Brunswick’s newly elected mayor, has objected in the past to how this project was negotiated, including the subordination of the township to Toll’s lender for any claim on the land. But Stahl generally favors the project and said during his campaign that he might shore up the budget gap through spending cuts and debt restructuring.
In an interview with a local newspaper last March, Toll’s vice president of land acquisition, Robert Fuller, said that Cornerstone’s progress had “no real correlation” with Toll’s financial circumstances, which since that interview have worsened. Demand for housing in New Jersey hasn’t exactly been robust lately; in the third quarter of 2008, the state’s foreclosures were up 95 percent compared with the same period the previous year, and its rate of foreclosures in September—one in every 453 homes—outpaced the national average, according to Realty Trak.
“A lot of people think Golden Triangle is a terrible idea now,” admits Neary. What once looked like a promising solution to this problematic site’s redevelopment remains up in the air because, he says, “it’s a different market today.”