Tuesday, March 24, 2009

Unfinished Projects

Even in the last downturn in the late 80s and early 90s there were unfinished construction projects. Some of them real eyesores. Some Bergenites may remember an apartment complex on Bergen Boulevard right next to the A&P. On the top of the ridge, the unfinished project could be seen for miles and miles. For close to a decade it stood, surrounded by a mesh fence, blocking views, obstructing sidewalks, and a constant reminder of the over built 80s. The building was finished - not soon enough for Ridgefield, Cliffside Park and Fairview residents that could never escape its existence. Looking around there it always was - for close to a decade - an unfinished, ugly empty shell, slowly deteriorating.

As the saying goes - "the more things change the more they stay the same." So is the case with this decades unfinished projects. Unfinished properties again the eyesore of the neighborhood. Bringing down property values. And constantly reminding residents of the previous housing bubble. In this article from The Record titled Economy puts crimp in home construction discusses a Clifton project that is only half complete, and destined to stay that way for some time. Lets take a look -

Peter and Denise Panayoti moved to a new condo in Clifton in August 2006, happy to leave behind the work of maintaining their nine-room house in Wallington. They watched as construction crews worked on other buildings in the 55-and-older luxury complex, called Royal Club at Winthrop Court.

But in a sign of the housing market's deep distress, developer Stratland Homes halted construction last summer, with only four of the planned nine buildings completed. Two buildings were left partly built; two more, while closer to completion, are all but empty. The sales office is shuttered and the developer's phone number has been disconnected.

The developer "just abandoned it," said Peter Panayoti, a 74-year-old retired engineer whose condo overlooks an unfinished building. "I guess there's no money to finish it."

Even in the worst housing downturn in decades, the sight of a large building left half-done is rare in North Jersey. Many builders have finished their projects and cut prices, if necessary, to draw buyers. In other cases, builders have delayed starting construction.

[T]he 55-and-over market is one of the most troubled in the state, according to East Brunswick appraiser Jeffrey Otteau, who tracks real estate around New Jersey. Towns have been much quicker to approve these developments than other projects, because they bring in tax revenues without adding the cost of educating schoolchildren. As a result, said Otteau, there is a glut of these age-restricted homes on the market. Moreover, he said, many older New Jerseyans would prefer to retire to Florida or another low-cost state, rather than buy in a New Jersey 55-and-over complex.

[Matthew Trella, who is head of the condo association and a Clifton lawyer] looks forward to having the banks take control of the unfinished buildings, because he expects they will be able to put some money into completing the project.

Well, at least they finished the pool and clubhouse. Some complex stopped construction before those were finished.

Meanwhile, Trella may be too busy to pay attention if he thinks that the bank foreclosing the project will be a positive for the completion. More than likely it will just prolong the project. Banks are not developers. And they many, many foreclosures to deal with so an uncompleted housing project with numerous restrictions attached and a group of residents that have blocked other proposals does not exactly look like a great pick-up.

More than likely the project will flounder in its current state for years and years. Just like the apartment complex on Bergen Blvd. did. The only people thinking about the project will be the townspeople who are not getting the taxes and have to look at the eyesore everyday. Until there are buyers there will not be construction. And that is still a long time away. So our advice to the residents of The Royal Club is to get used to looking at unfinished projects.

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