Special Executive Session on the Waterfront Redevelopment

Friends of Asbury Park:

This Friday the City Council will be holding a special Executive Session meeting to discuss the state of the Waterfront Redevelopment. As I understand it, the goal of this meeting is to develop a collective vision and plan of action for the Waterfront in light of the current state of progress, market conditions, the City budget, etc.

By this point in the Waterfront Redevelopment, the Citizens of Asbury Park were promised at least 1200 new ratables (300 per year over 4 years) and $8,000 in tax revenue per ratable. To date, we have approximately 40 new ratables. This is despite the fact that Asbury Partners had the ability to develop waterfront property in Monmouth County in what was arguably the hottest four years in real estate development in our nation’s history.

This is an important time for your Councilmembers to hear from you. I have outlined below some important facts for you to review with regards to both the City Budget and the Waterfront Redevelopment. I am sure you will see why/how these are related.

I hope this finds you well.

Peace,

Jim Keady, Councilman
City of Asbury Park, NJ

Facts on the City Budget and the Waterfront Redevelopment

On June 20, 2007 the City Council approved a $ 35.5 million budget with a minimal increase in the City tax rate (not including county and school rate increases.) This amount is similar to last years; however, since the 2004 budget the City Council majority has increased spending by just over $8 million.

If the state had not come to the aid of certain City Council members’ pleas for help, our minimal tax bill increase would have been $2,685 per household, on an average assessed home of $150,000.

The City Manager has stated that, “It’s going to be a few years before we can balance a budget with our own revenues.”

Larry Fishman of Asbury Partners has stated that, “I think the city’s going to have to plug that gap ($7.5m) for another year.”

Asbury Park’s deficit was supposed to be eliminated back in 2002 when the city sold all of our waterfront properties and pavilions. Citizens were then told in 2005 that the surplus of $11million from the sale of the Sewer bond would go to “plugging the budget for the next three years.” As proof to support this bond and to gain approval, the City presented a report to the Local Finance Board stating that Asbury Park will have “annual recurring revenue beginning in 2006 to 2008 equaling $4.2 m in phase 1; (and) phase 2 will be on line in 2008-2009 with an additional $4.2m.”

The following is a list of deficiencies on the part of Asbury Partners under the terms of the recent Dispute Resolution Agreement:

A. Convention Hall (Schedule B)

(i) Window Replacement Program. The window replacement program was to be completed in May 2007. Asbury Partners subsequently indicated that this program would be completed by September of 2007. On May 31, 2007, Asbury Partners indicated that the condition of the window openings necessitated repair of those openings and that fabrication of the replacement windows would be deferred until the details of the necessary repairs were completed. The Recent Submission indicates that reconstruction of the window openings has begun but there is no definitive completion date.

(ii) Interior Store Replacements. Interior Store Replacements were to be completed in September of 2006. An updated projection by Asbury Partners’ representatives was July 2007. To date, this work has not commenced. On April 19, 2007, Asbury Partners indicated that a bid award was expected on April 20, 2007. The Recent Submission indicates that construction will commence in September and be competed in December of 2007. However, the City is still awaiting indication that the SHPO has approved the interior storefront design.

(iii) Arcade Entrance Structure Repair. This work was to be completed by May 2007. Revised projections from Asbury Partners’ representatives were that the work would commence in early April and would be completed in August 2007. On May 31, 2007, Asbury Partners indicated that revisions were necessary to existing plans and that a permit modification would be applied for. The Recent Submission indicates that construction will start in mid-September, and be completed in December 2007.

(iv) Exterior Store Fronts and Entry Doors. This work would be completed in April of 2007. To date, this work has not been commenced. On May 4, 2007, Asbury Partners indicated that an extension for submitting bids was granted with the new deadline being May 18, 2007. The Recent Submission lacks any definitive timeframe for the completion of the work.

(v) Entire Building Renovation Design. Construction documents were to be complete in September 2007 with renovation work to begin in October 2007. To date, Asbury Partners has not undertaken the schematic design which was scheduled to be complete in January 2007. The Recent Submission does not indicate any definitive timeline for this work.

B. Casino (Schedule C)

1. Arcade

(i) Entire Building Renovation Design. Schedule C indicates that construction documents are to be complete in September 2007 and that renovation is to commence in October 2007. Schematic Design scheduled to occur in January 2007 has not commenced. The Recent Submission indicates that this project has an expected plan date of Spring 2008 but provides no definitive timeframe for the work.

2. Carousel

(i) Construction of the new roof was to be complete in June of 2007. To date, that work has not been completed. In March of 2007, Asbury Partners indicated that the completion date was estimated at August of 2007. The Recent Submission indicates that the expected completion date is October 2007.

(ii) Entire Building Renovation Design. A schedule for work from Schematic Design to Commencement of Construction would be provided by Asbury Partners. The Recent Submission indicates that this project has an expected plan date of Spring 2008 but provides no definitive timeframe for the work.

3. Power Plant (Schedule D)

a. New Roof for Power Plant. Schedule D indicates that construction would be completed in June 2007. An Asbury Partners’ representative estimated that this work would be completed in September 2007. To date this work has not been completed. The City Recent Submission indicates a completion date of October 2007.

(i) Entire Building Renovation Design. Schedule D indicates that construction documents would be completed in September 2007 and that construction would begin in October 2007. To date, Schematic Design that was to commence in January 2007, has not commenced. The City received a progress report on September 14, 2007, which indicates that this project has an expected plan date of Spring 2008 but provides no definitive timeframe for the work.


4. Infrastructure (Schedule E)

a. The infrastructure work on Kingsley Street relating to the stabilized base for all trench work was scheduled to be complete May 31, 2006, has not been completed.

b. Signage Work. Scheduled to completed April 15, 2007, has not been completed.

5. Joint Issues (Schedule F)

a. Asbury Partners has not complied with the City’s timely demand for the funding of escrow payments necessary to pay City personnel, as set forth in Item numbered 7.

b. Asbury Partners has not submitted to the City its annual reports to N.J.S.H.P.O relating to the Convention Hall and Paramount Theater as required by the Historic Preservation Easements since April 7, 2006, in accordance with its obligation under Schedule F of the Dispute Resolution Agreement. The Recent Submission indicates that this work is in progress.

c. Asbury Partners failed to move the Palace Amusement Murals by August 1, 2006 or comply with the recommendations of conservator, Paul Himmelstein. Construction activities have begun at the Wastewater Treatment Plant, subjecting the murals to an increased chance of damage. The Recent Submission indicates that a September 2007 move is planned.

In addition to the above, there also are joint issues that must be addressed by the parties as more specifically set forth in Schedule F of the Dispute Resolution Agreement. For example, the parties must resolve Schedule F Item number four relating to the transfer of Green Acres parcels to the City subject to an agreement regarding approved uses. Further, the City and Asbury Partners must resolve issues relating to Schedule F Items numbered 9 and 10 dealing with the dispute regarding the taxation of Block 227 and the determination of the sale price for Block 222, respectively.

In addition to Asbury Partners’ failure to comply with obligations under the Dispute Resolution Agreement, they have also failed to satisfy the following material obligations under the Redeveloper Agreement.

1. Redeveloper’s failure to construct the beach clubs in accordance with Section 3.13.
2. The failure to complete work in connection with the re-opening of Sixth Avenue in accordance with Section 3.15.
3. The failure to make any “good faith” effort with respect to the integration of the Charms Building into any development by a subsequent developer in accordance with Section 3.16.5,
4. The failure to continue to implement the infrastructure improvement master plan as presented and accepted to the Mayor and Council in 2005.