He has built a new apartment complex in Lyndhurst and he’s got others nearing completion in Kearny and Harrison. And he’ll be a partner in a joint venture commercial development in the meadowlands.
Now Carlstadt developer Ed Russo is pitching an additional residential project for the Passaic Ave. Redevelopment District on the town’s Passaic River waterfront.
Russo is hoping the town will designate his company as the developer so he can build 458 units of rental apartments – one- and two-bedrooms – that would be spread among four buildings on the west side of Passaic Ave., from the East Newark border to the south end of the former Pathmark parking lot.
Mayor Alberto Santos, who, along with the Town Council, listened to Russo’s plans last Wednesday, welcomed the proposal with open arms, saying, “What we’ve seen here are empty lots, empty factories. … This is an opportunity for a windfall. The stars have aligned. This is now a good time to get these parcels developed.”
Santos was referring to the now largely dormant 16-acre former industrial tract – occupied by American Strip Steel and the now-vacant Spartech site – now targeted for residential construction of which, according to Russo, 12 acres are “developable.”
Russo said he was confident that any environmental remediation that would be required could be managed without overly impeding construction. Plans call for elevating the site two to three feet above the 10- foot flood plain and installing a cap prior to building.
A 16,000 square foot clubhouse, river walk and dog run would be part of the proposed complex which would face a new BJ’s Wholesale Club and smaller retail shops being developed by DVL Kearny Holdings on the opposite side of Passaic Ave.
Russo, who will be looking to negotiate a PILOT (payment in lieu of taxes) agreement with the town, is planning no retail space for this project. Nor, he said, is he looking to offer “for-sale” apartments, a strategy that “lenders have not endorsed.”
That approach disturbed residents Lawrence Handlin and James Miller who felt that the town would be losing a shot at maximizing tax revenues if it accepted a project keyed only to rental units and a PILOT.
A complex that, in Miller’s view, was likely to attract a “transient population” is “not going to increase the value of my home.”
And Handlin, asserting that because, “we’re in a cycle now where [the town is] broke,” things will only get worse with the “potential” of the project generating more children on an already stressed public school system. “We can’t afford that,” he said.
But Santos dismissed fears about adding to school overcrowding. “It’s not going to add a burden on our schools,” the mayor said. And Russo added: “If there were more than 15 or 20 school kids [from his project], I’d be very surprised.”
Santos said that because Russo’s 150-unit residential project at Bergen and Schuyler Aves. is now half completed and should open by September, “we should know by the end of the year how many kids will be added to the school system.” That can serve as a guide for what to expect from the Passaic Ave. project, he said.
If that’s the case, Handlin interjected, “Perhaps we should put a hold on the [Passaic Ave.] project until we know.” He got no support for that suggestion, however.
Santos went on to say that even with a PILOT, the town figures to collect an amount of taxes “higher than what the property currently generates. [A PILOT] works so long as we’re not imposing a burden on the school district.” Under a PILOT arrangement, local schools receive no share of the ratables from an abated property.
Asked by Miller whether the project would provide any affordable housing units, Santos said that was unlikely, based on the Fair Housing plan the town adopted six years ago that calls for rehabilitation of existing eligible apartments rather than building new affordable units. (The council voted Wednesday to retain planner Susan Gruel to update the plan now that the courts have upheld the constitutionality of the state’s affordable housing obligation.) Based on renting experiences at other residential projects in the region, Russo said, “we should continue to see relatively good demand” for one-and two-bedroom apartments. So far, for his Vermella Crossing project on Bergen Ave., 31 leases have been signed and three out of four are for one-bedrooms, he said.
For the Passaic Ave. project, Russo plans 310 one-bedroom apartments and 148 two-bedroom units, along with garages that would hold 520 vehicles and surface parking for an additional 63 cars. After acquiring all the individual properties in the project site, Russo anticipates build-out within two and a half years.
Santos said the council will be asked to designate Russo as the developer for the Passaic Ave. tract at the July 14 meeting. The next step would be negotiating a redeveloper agreement.