SERA chooses builder for National Lead site
LNR to build retail, offices, entertainment complex, residences
BY MICHAEL ACKER
Staff Writer

And the winner is ... LNR Property Corp.The Quincy, Mass.-based firm was chosen last week as redeveloper for the former National Lead property, following months of deliberation by the Sayreville Economic Redevelopment Agency (SERA). The agency selected LNR in a unanimous vote Thursday, after analyzing proposals from a field of redevelopers that had been whittled from eight to four.

LNR's concept plan had the highest projected value of the final redevelopment plans, at $1.8 billion. LNR proposed 2 million square feet of office space, 1 million square feet of retail space, a movie cinema, hotels, a 5,500-seat minor league baseball stadium, two marinas, 2,000 residential units, parks and open space, and a recreation community center.

The redevelopment will straddle the Garden State Parkway and Route 9, and will stretch along the Raritan River.

The plan "allows for 24-hour vibrancy and places for residents, visitors and employees to live, work, shop and play," according to a report presented for SERA by its engineer, David Samuel, of CME Associates. The voluminous document, called the Sayreville Waterfront Redevelopment Request For Proposals [RFP] Evaluation Report, ranked LNR's proposal highest among the four plans.

Samuel listed various criteria and ranked the developers' plans accordingly. These included the strength and relevance of the redevelopment plan, the creativity of the proposal, use of the property, relevance of the plan to the borough's redevelopment plan, the agency's desire for a model fitting with the Baltimore Inner Harbor, the impact on the community, feasibility of the project, developers' qualifications, experience with similar projects, strength of the development team, overall strength of the proposal, and projected revenues and economic benefits to the town.

SERA Executive Director Randy Corman, borough Chief Financial Officer Wayne Kronowski, Business Administrator Jeff Bertrand and Tax Assessor Joe Kupsh were all part of the team that compiled the report with Samuel, with Kupsh providing data assessment for the report.

Of the three firms not chosen last week, Forest City Enterprises, of Cleveland, was ranked second, falling just short of LNR in the ranking system. V. Paulius & Associates, of Allendale, was third, while The Spector Group, of North Hills, N.Y., was last, receiving a score of about half the points given to LNR in the evaluation.

Samuel said The Spector Group altered its proposal three times during the process, with the most significant changes made in the number of housing units. The original proposal of up to 50,000 units was reduced to 20,000-29,000 before the public presentation. A later revision lowered the number to 7,000.

However, Samuel said this "constant evolution" of their proposal did not change the rankings he and the other professionals arrived at in the report.

Samuel said the fiscal impact analysis done by Spector was "extremely vague." He added that V. Paulius also did not provide enough information with regard to fiscal impact.

LNR was said to have the highest and best feasible uses in their proposal.

"The inclusion of residential is backed up by the proposal's significant nonresidential ratable positive financial impact to the borough," the report says of LNR.

LNR estimated annual revenues of $31.6 million paid to the borough, with municipal and school costs at $7.1 million. The builder thus estimates that Sayreville would gain $24.5 million per year from the project after it is built out.

While Spector provided data showing it would provide the largest amount of revenue of all the developers, Samuel noted that the feasibility of the plan was questionable due to its size. And Spector did not provide an estimate on school and municipal costs resulting from the development.

"The massive density and size of the Spector development program is a drawback in itself," Samuel wrote. "It is apparent that the Borough of Sayreville, even the region, could not handle a growth in population of close to 80,000 people, as originally proposed and just recently reduced to 7,000 units."

V. Paulius was ranked highest in the category of relevance and compliance with the borough's RFP. But it ranked lowest in meeting the Baltimore Inner Harbor model that the borough was seeking. The model, scaled back from what exists in Baltimore, is based on innovative design that uses elements such as a sports-entertainment complex, restaurants, retail, offices, hotels and convention centers.

LNR ranked highest in meeting that model, which the report says would be "attractive, desirable and appropriate to the Sayreville Waterfront Redevelopment Area."

The most feasible plan was the V. Paulius proposal, according to the report, because the proximity to highways such as the Garden State Parkway and routes 9 and 35 makes it highly desirable to potential clients for warehousing. Samuel wrote in the report, though, that warehousing, "while permitted in the redevelopment area, should be extremely limited."

The report says that the significant amount of retail and office space proposed by LNR would provide the borough with a potentially significant financial boost. The report also said that, financially, LNR was the strongest of the four developers.

SERA gave the developer a list of recommended requirements after the professionals finished their review of the development plans, in the interest of minimizing the tax burden on residents and to make sure the developer pays its fair share.

Included in the 25 recommendations are the use of age-restricted and senior housing to minimize the generation of school-age children. It also recommends that the redeveloper guarantee that the number of future school-age children does not exceed an estimated number. If they do go over the estimated number, the firm will have to pay a fee for the construction of schools, according to the recommendation.

Other recommendations include the posting of a letter of credit to guarantee repayment of the loan given to Sayreville by Middlesex County, and to fund the construction of fire and emergency service facilities and the purchase of equipment.

SERA Attorney Christopher Hanlon spoke after Samuel gave his report, offering his advice on the criteria to follow in the selection process and noting that members would have to use very broad discretion of case law. He said the agency is not limited to the rankings of the report, but all members still supported LNR.

Mayor Kennedy O'Brien, also a SERA commissioner, said Sayreville has been "historically a great place to live, work and play." He affirmed his desire to see residents enjoy local amenities and not have to travel north for things such as sports, entertainment and employment.

Corman addressed his concern that V. Paulius had not done a project this large before. He added that V. Paulius' joint venture is smaller than both LNR and Forest City, so he was not sure if it would be able to repay the $39,000,000 loan from Middlesex County.

Samuel noted that Spector did not tell him what else it would put on the property after changing its plan and subtracting more than 20,000 housing units from the original concept. He said a problem with the Spector proposal was that the changes were not reflected in the overall assessment of the project, leaving unanswered questions.

SERA Commissioner Michael D'Addio took issue with the warehouses in the V. Paulius plan.

"If we wanted warehouses, we could have done that eight years ago," he said.

D'Addio said he did not like the massive size of Spector's proposal, so he proposed narrowing the field to LNR and Forest City. He said LNR's plan has a modern look, while Forest City's had a more nostalgic appearance.

O'Brien offered three of his own criteria by which to choose the developer - consider the image of the town, the impact on the community, and the borough's yield.

"I found going through the analysis that LNR came the closest to what we are talking about," he said.

O'Brien noted the strengths of LNR's mixed-use plan, which he said would make Sayreville a place where residents can live, work and play.

"LNR Property Corp. fills that desire much better than Forest City. Forest City had a wonderful proposal, but they did not have all of the elements that LNR did," O'Brien said.

The mayor said that he believes that the two developers were basically equal in financial strength, but in fulfilling the borough's wishes he felt that LNR had submitted the better plan.

SERA Commissioner Edward Fallon agreed, deciding on LNR after saying that the 2 million square feet of office space it proposed will help bring jobs to the borough.

SERA Chairwoman Christine Spezzi said she was inclined to agree, noting that LNR had the most to offer.

Commissioner Jacqueline Berg also cited the fiscal impact of LNR's proposal as her reason for going with the firm.

O'Brien asked that two community swimming pools be incorporated into the recommendations, along with a plaque recognizing Middlesex County Freeholders Director David B. Crabiel, thanking him for securing the loan for the borough to condemn the National Lead site.

The borough took ownership of the 400-plus-acre property last year.

Bill Ryan, government and community relations representative for LNR Property Corp., was met with applause from the public as he approached SERA after its decision. Ryan said it was a tremendous honor that the agency chose LNR, and he emphasized the work and time that will be invested in executing the project.

"We look forward to spending a lot of time in the community," Ryan said.

Corman later told the Suburban that this was likely the most open selection process for a redeveloper in the state's history.

"The commissioners took great care to evaluate all choices and make the best decision for the town," Corman said.

Council President Thomas Pollando commended SERA on its work and the selection.

"I would just like to say to the commissioners, CME and Randy [Corman] what a great job you did tonight," he told the agency. "The matrix you put together is something that I do in business, and we fully support you. This is a great day for Sayreville."

The newest member of SERA, Democratic Councilman Dennis Grobelny, was unable to attend Thursday's session. The council added Grobelny to the agency as a voting member on March 6 after approving a controversial ordinance that allows the borough to add two councilmen to SERA. The agency has filed a lawsuit in response based on concerns over the constitutionality of the state legislation that enabled the council's action.

Corman noted that Pollando and councilmen Rory Zach and Dennis Grobelny are members of the Borough Council's subcommittee to SERA, and that the group would meet once a month to discuss redevelopment in the borough.