Posted May 5, 2009
Greetings From Asbury Park (Again)
Amid economic slowdown, a legendary Shore town awaits the fruits of redevelopment.
By CAREN CHESLER
When Ross Blanco was scouting locations for a café six years ago, he drove down Cookman Avenue in Asbury Park and thought the new retailers opening up there must be crazy.
Six months later, he checked out Cookman again, and the block was transformed.
“I thought, Wow. In a couple of years, this is going to be an unbelievable place,” Blanco says. He himself eventually set up shop on Cookman Avenue. Three years later, Blanco’s café, the America’s Cup Coffee Co., is doing decent business in the summer months, but during the winter he can barely make ends meet.
Blanco is one of many businesspeople, investors, and home buyers who were hoping to ride the wave of Asbury Park’s ambitious $1.25 billion beachfront redevelopment plan adopted in June 2002. Today, with redevelopment virtually at a standstill, they paint a mixed picture of dreams deferred amid surprising pockets of success.
“From a small-business owner’s perspective, someone who put every penny into opening up a business here, the redevelopment could never move fast enough,” Blanco says.
Once known as the Jewel of the Jersey Shore, Asbury Park was a place where men in top hats and linen suits joined women with white gloves and parasols to stroll the boardwalk on a summer afternoon. The city had a grand carousel and amusement park, swan boats, and some of the most dramatic seaside architecture on the East Coast. But Asbury Park began to decline after the Garden State Parkway was built in the 1950s, giving tourists easier access to less crowded beaches farther south. In 1970, race riots drove out many middle-class families and left a city with the appearance of having been ransacked by thieves. By 2000, 30 percent of Asbury Park’s families lived below the poverty line.
Yet Asbury Park continues to exert a magnetic pull. Some fondly remember the town from childhood. Others are drawn by the mythology of Bruce Springsteen’s 1973 debut album, Greetings from Asbury Park, N.J. Such forces help the Monmouth County town hobble through the tough times.
“There’s a nostalgia factor here. People want to see it succeed,” says Marilyn Schlossbach, who owns several food establishments at the Shore, including the newly opened Langosta Lounge and a taco stand on Asbury Park’s revitalized boardwalk.
Despite all the good intentions, progress has been slow. The ambitious beachfront redevelopment plan—Asbury Park’s second in the last twenty years—slammed head-on into the current credit crunch, derailing a series of projects that were poised to revive the boardwalk area with upscale retail stores and more than 3,100 residential units. Only 490 units were built before the economy tanked.
The most visible project was to be the 224-unit condominium complex called the Esperanza, Spanish for “hope.” The complex, located across Ocean Avenue from the beach, was supposed to conjure images of Miami’s South Beach, with a sensually undulating roofline, a posh lobby, oceanfront terraces, and hotel-style amenities. With studios priced in the low-$400,000s and four-bedroom penthouses targeted at more than $2 million, the cost was also like South Beach. But in late 2007, the builder, Hoboken-based Metro Homes, stopped work, blaming the national mortgage crisis that sources say hurt the developer’s ability to sell its high-priced units.
The project was notable not just for its opulence. It was rising on the very site where developers Henry and Sebastian Vaccaro and Joseph Carabetta had begun constructing condominiums before going bankrupt in 1992. They left behind an eleven-story rusted skeleton that came to symbolize Asbury Park’s continuing decay. The site was unaffectionately known as C-8, its old tax-identification number. Today, Metro Homes’ unfinished structure has replaced the previous hulk as the city’s most evident eyesore.
The Esperanza was not the only project that hit a wall. Poor sales scuttled plans for Wesley Grove, a complex of townhouses and condos that were to occupy several city blocks just off the southern end of the beach area. After completing the first of four phases, in which only about 50 percent of the 91 completed units were sold, developer Kushner Companies of Florham Park sold its interest in December 2007 to another developer, Madison Marquette.
The project is currently on hold, leaving vast open lots in plain view from the boardwalk. The status of a third project, North Beach, an upscale development on the northern end of the waterfront, is unclear. The developer, Jackson-based Paramount Homes, has completed three buildings totaling 157 units and just over 50 percent of the units have been sold. City officials say four more phases were to be built on neighboring lots, but a Paramount spokesman claims the project has been completed as planned.
Critics of the redevelopment plan say it relies too heavily on residential units—especially condo apartments—in a town of fewer than 17,000 people. Instead, they say, more emphasis should have been placed on Asbury Park’s history as an amusement and entertainment destination.
“That’s what drew people here,” says Rosetta Johnson, who was born and raised in Asbury Park and is running for City Council. Johnson says she spent much of her childhood in the 1960s on the boardwalk. Parents would play cards while children would enjoy the arcades, go on amusement rides, or swim in a pool located just off the ocean. “We lived for the boardwalk,” Johnson recalls.
David Barry, president of Hoboken-based Applied Development Company, which developed Pier Village in Long Branch, agrees with Johnson and others that the plan is too skewed toward condos. He would prefer more rental units. Renters provide a year-round population, while condo buyers, particularly in a seaside community, tend to live in them only during the summer months, Barry says.
Barry also believes the plan is too dense. Tall buildings with designer features and rooftop pools might work in a mature market like Miami Beach, he says, but emerging markets like Asbury Park and Long Branch need to be established first. Greater density can be added in later stages of development.
“With municipalities, there’s a pressure to create ratables through as much density as possible,” Barry says. “However, the underlying economic fundamentals with respect to land and construction costs might not always make it a viable project.”
Donald Sammet, Asbury Park’s director of planning and redevelopment, defends the city’s redevelopment strategy. “The plan calls for a pedestrian-friendly, mixed-use environment with a variety of entertainment, recreational, retail, restaurant, and residential uses all within easy walking distance of one another.
Combine that with the area’s proximity to the city’s historic downtown and mass transit availability, and you’ve got a recipe for success.”
Sammet places the blame for the halt in redevelopment work on market forces. “Demand is not there due to concerns over the current economy, whether that be individuals not looking to invest in a new home right now, or mortgage lenders being more cautious,” he says. “The result is that developers cannot get the return on investment they need.”
Yet those sanguine about Asbury Park’s future are heartened by what progress has been made. They believe redevelopment will continue to chug along at its own pace. The boardwalk resurrection is proceeding; three renovated pavilions opened in November. Another seaside landmark, the 300-room Berkeley Oceanfront Hotel, once owned by the Maharishi Mahesh Yogi, has been renovated since its purchase in February 2007 by investors Joseph and Jacob Chetrit. The old Howard Johnson’s Hotel and Restaurant on the boardwalk also was refurbished and now houses the trendy Salt Water Beach Café and Tim McLoone’s Supper Club upstairs.
About four blocks from the beach, Asbury Park’s small downtown area runs mainly along Cookman Avenue. Here, a number of restaurants, clothiers, and antique and home furnishing stores have taken root. Some newcomers already have gone, but other merchants have replaced them. The old Steinbach Department Store building—renovated with a mixture of commercial and residential space—is almost 100 percent leased. Six months ago, it was only 60 percent occupied.
Referring to downtown and the beach, realtors say they received more calls in the first quarter of this year than in the same period in each of the three previous years.
“We did the same business in 2008 as we did in 2007,” says Gregory Demaras, a partner at John C. Conover real estate agency in Asbury Park. That’s good news in today’s real estate environment. When interviewed in March, Demaras was pleased to report that he had signed ten commercial leases during the previous six months, dating to fall 2008.
Demaras says developer and investor interest in the city swelled between 2002 and 2005. Prospective buyers—including empty-nesters, gays, and Springsteen fans—liked the funky appeal of the area, its seaside location, affordability, and proximity to New York City. The demand pushed up the price of residential property on the east side of town as well as downtown commercial property.
Business started to contract in 2006 when the economy began to go south, says Demaras. Now he is seeing a second wave that is less driven by investment. “The people coming in now want to be here because it’s a place they want to live rather than a place where they want to make a quick buck,” says the agent. He predicts this wave of interest will be as big or bigger than the earlier wave thanks to the progress that has already been made.
Tom Gilmour, Asbury Park’s director of commerce, says the residential component of the city’s redevelopment plan is likely to languish until the mortgage crunch eases. Albeit slowly, residential real estate in Asbury Park continues to sell. “As bad as things are, we’re still inching along,” says Gilmour. “A lot of people coming to the city were here three years ago when prices got crazy. They’re now back, since prices have come down.” Figures supplied by Demaras indicate that the average single-family home price in 2008 was $278,267, down from $296,557 four years earlier.
There are other upbeat signs. Two restaurants, Stella Marina and Langosta Lounge, opened on the boardwalk this winter, and both have been so popular on weekends that it is often hard to find a seat at the bar. Langosta Lounge was so understaffed—its owners did not dream it would have so many customers in the off-season—that it recently had to turn people away. On President’s Day weekend in the middle of February, at least one restaurant, Old Man Rafferty’s on Cookman Avenue had a high grossing weekend.
“We were very scared about what the winter was going to be like, so we didn’t really hire anybody,” says restaurateur Schlossbach. “But we’re doing the kind of business now that I didn’t think we’d be seeing until the summer.”
The latest renaissance began around 2000 and kicked into high gear in 2002, when city officials approved the current redevelopment plan for the beachfront, and Asbury Partners LLC was named master developer. The plan comprises the three residential projects, which were to be built by subdevelopers, and the boardwalk redevelopment, which became a joint venture between Asbury Partners and Madison Marquette.
The oceanfront redevelopment area runs from Convention Hall south to the old Casino building, at Asbury Park’s border with Ocean Grove. The city sold the 3,600-capacity Convention Hall and its neighboring 1,600-capacity Paramount Theater to Asbury Partners in 2004 because it could not afford to renovate the venues itself. (The two venues are now under Madison Asbury Retail LLC, the Asbury Partners/Madison Marquette joint venture.) The renovations have since been completed, and the developers have hired music promoter Live Nation, which produces shows for clients including Billy Joel and Elton John, to handle bookings for those two venues, as well as for the legendary Stone Pony and Wonder Bar (now also owned by Madison Asbury Retail).
Separate redevelopment plans were also approved for the city’s downtown as well as for Main Street/Route 71, the city’s primary north-south thoroughfare, and Springwood Avenue, which is west of Route 71. For the most part, the plans changed zoning and height restrictions to accommodate retail businesses on the first floor and residential units on the upper floors of most properties. The plans created additional parking, though local residents complain there is still not enough, particularly downtown.
The city has been criticized for allowing the neighborhoods west of Route 71 to languish. Asbury Park officials dispute that, saying they are working with several landlords who want to renovate their properties along Springwood Avenue and Route 71. One developer plans to renovate a food store on the corner of Springwood and Borden avenues and turn it into a 7,000-square-foot grocery with 22 apartments above it.
Another developer is under contract to purchase two city-owned properties on the corner of Springwood and Dewitt avenues for a nominal fee and plans to put an Elk’s Club on the ground floor and sixteen affordable housing units above that. Another project still under review involves the construction of a new senior citizens’ center as well as eight housing units and 9,300 square feet of retail space.
“The current council has spent a lot of time and effort on all parts of the city,” says redevelopment director Sammet.
But the recovery is fragile. The city still struggles with a reputation that it is dangerous, even though statistics say that crime is on the decline. According to the state’s Uniform Crime Report, there were 319 violent crimes and just a single homicide in Asbury Park in 2008, down from 351 violent crimes and eight homicides the previous year.
Says commerce official Gilmour: “The news about Asbury Park was so bad for so long, I ask people, ‘Is this the first time you’ve been here?’ And they say, ‘Yes.’ And when I ask them where they’re from, they say, ‘Bradley Beach,’ and I think, Yikes, how did that happen?” (Bradley Beach is less than two miles away.)
Many of those who bought units in the new residential projects are still waiting for their investments to get back on track. Anthony Perillo, a 56-year old retired Sony Corporation finance executive from Westwood who bought a huge two-bedroom unit in Wesley Grove for $669,900, and says he loves his townhouse, but complains that he is living in a construction site.
There is a vacant lot across the street and another lot next door that he calls the “tree farm” because it has hundreds of wood pilings of various heights jutting out of the ground. The two lots were supposed to house the condo’s next two phases, but work stopped after Kushner Companies sold to Madison Marquette. The pool and spa advertised when Perillo bought his unit have not materialized. And beyond the vacant lots, numerous derelict buildings still stand.
Perillo says the project has been marred by delays. He bought his unit in 2005 and was told he would be able to move in by November 2006. He did not get into the building until May 2007.
“In 2006, they had way more than half of them sold, but people cancelled because the market was going down and because they couldn’t get mortgages,” Perillo says. “They must have lost twenty contracts because of that.” This spring, units were being offered at as much as a 25 percent discount, according to the Wesley Grove sales office. Madison Marquette did not return calls for comment.
As for the Esperanza, Perillo believes the project was doomed because it was priced too high. People looking to buy in Asbury Park at this point are not willing to pay that kind of money, he says.
“This isn’t Miami Beach yet,” Perillo says. “I think they were advertising that about 60 were sold, but when a builder announces 60, 30 are his buddies, 10 are his relatives. That’s the way they do these things.” Perillo, who has been vocal in his criticism of the redevelopment plan, has announced his intention to run for city council.
Esperanza developer Metro Homes is trying to amend its proposal so that it can open the parking garage that’s already been completed. Company officials did not respond to requests for comment.
While the spruced up boardwalk is attracting more visitors and some of the town’s restaurants are reporting strong business, downtown still lacks daytime traffic, making it difficult for businesses to endure.
“If you don’t have the capital to get through the tough times, it’s very difficult to stay in business right now,” Gilmour says of the town’s retailers.
Ross Blanco believes the resurgence is being held back by the scope of the renovations, which have been limited to a short stretch of Cookman Avenue. The rest of the area still looks like a war zone, he says.
“If anyone looked at what’s here now, as opposed to ten years ago, you’d have to say it’s been a great success,” Blanco says. “But there’s only one block finished. People come into town, they go down one block, and they say, ‘That’s it?’”
It has not helped that a lot of new businesses have been high-end home-furnishing stores, which wound up moving or going belly up. Observers say it’s not uncommon in gentrifying markets for luxury retailers to open shop when pioneering new residents crave basic amenities, like supermarkets, restaurants, and bars.
“The retail here went from A to Z without stopping at C or D. Consequently, those businesses didn’t make it. The people who had that kind of money weren’t here yet,” says Pat Schiavino, a local developer who owns several downtown buildings.
Schiavino points out that chain stores have thus far stayed away. “They do demographic studies, and we don’t have the demographics yet,” he says. “There isn’t a lot of people traffic, the per capita income isn’t high, and guess what? When you go east, all you have is fish.”
A former music promoter, Schiavino is among those who contend that the redevelopment plan calls for too many residential units and too much density. If the plans had had a larger entertainment component, they would have brought more people, he says.
“It’s a beach town,” he says. “It was always about entertainment. That’s what’s worked in the past. And that’s what will work.”