Shopping
Raritan unveils $96.3 million redevelopment plan for ‘dead’ Route 206 shopping center
RARITAN BOROUGH – The Borough Council will hold a final vote and public hearing July 16 on a redevelopment plan for the “dead” Raritan Mall.
The Council approved the introduction of the redevelopment at its June 25 meeting by a 3-2 vote.
If the Borough Council approves the redevelopment, that doesn’t necessarily mean the project will be built, said Mayor Nicholas Carra, explaining that it must be approved by the borough’s Planning Board.
The proposed redevelopment has become one of the most controversial issues in the borough in recent years.
Though the borough has seen a boom in the apartment construction over the past decade and more projects approved, some residents have balked at the idea of apartments being built on the site of the shopping center that was once occupied by a supermarket, a pharmacy and several small stores, including a bank, Blockbuster and restaurants.
The estimated $96.3 million project calls for the 12.2-acre shopping center at the intersection of Route 206 and Orlando Drive to be transformed by developer Raritan Mall LLC, of Bayonne, into a mixed-used development with 276 apartments and two retail spaces totaling 28,000 square feet.
Of the 276 apartments, 234 would be market-rate units with 42 affordable units. The market-rate apartments would be 144 one-bedroom units, 59 one-bedroom and den units and 31 two-bedroom units. The affordable units would be eight one-bedroom apartments, 25 two-bedroom apartments and nine three-bedroom apartments.
The two retail spaces would be 18,000 square feet and 10,000 square feet.
According to a financial report drafted by NW Financial Group, if the project is built and the borough and developer sign a Payment in Lieu of Taxes (PILOT) agreement, the municipality could receive an estimated $36.65 million through the lifetime of the agreement.
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If the property is not redeveloped, the borough would only realize $6.9 million in property taxes over 30 years. If the property is redeveloped without a PILOT, the borough would only gain $18.3 million.
Under state law, a municipality receives 90% of the PILOT money and the county receives 10%. In conventional property taxes, the borough would receive only about 25% of the total property taxes which would have to be shared both with the county and the Bridgewater-Raritan Regional School District.
The study predicts that while the apartments would increase Raritan’s population by 526, only 28 would be public school children. The study cites three new apartment buildings in downtown Bound Brook where in 400 apartments, there are only six children.
The study also says there has been an 8.37% decrease in school district enrollment in the last decade.
“The Raritan Mall is dead, let’s be honest about it,” said Borough Councilman Ken DiGraziano. “It’s an eyesore to Raritan. It’s the first thing they see.”
DiGraziano said he remembered as a councilman 40 years ago that some residents were against building the shopping center and he may have a lost an election because of his support of the plan.
Councilman Adam Armahizer said the property has always been zoned for commercial uses.
“I don’t see why we are even considering a mixed use,” he said, adding “I don’t know why we are considering it at all.”
Armahizer said he doesn’t “see” apartments on the site.
“I don’t understand why we are pushing for it to be housing,” he said.
“How is this adding to our community?” he asked.
The shopping center lost its primary tenant in 2016 when the Stop & Shop supermarket chose not to renew its lease. A redevelopment study says that no new tenant has been found for the space “despite efforts from the municipality to attract a suitable replacement.“
Since that time, most of the 15 units in the main L-shaped building and three units in a smaller building on the highway are vacant or “have fallen into a state of disrepair,” according to a report that found the property met the criteria for redevelopment.
Raritan Mall LLC purchased the property, which is in a flood hazard area, in October 2020 for $5.6 million from Raritan Center SPE Owner, part of the Fortress Investment Group in Manhattan.
Fortress acquired the property when a previous owner, RAIT Financial Trust, of Philadelphia, went bankrupt and sold its assets to Fortress.
Raritan Mall LLC has agreed to pay $350,000 for improvements to Orlando Drive. The developer has also agreed to work with the borough and Somerset County to facilitate the transfer of Orlando Drive to Somerset County.
Email: mdeak@mycentraljersey.com
Mike Deak is a reporter for mycentraljersey.com. To get unlimited access to his articles on Somerset and Hunterdon counties, please subscribe or activate your digital account today.
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