What happens if a sinking economy sinks completion of the proposed M Station office/retail redevelopment?
The matter came up before the Morristown planning board for the first time on Thursday night, sparking a testy exchange between the project’s lawyer and a resident that ended with the board chairman muting the resident from the virtual meeting.
Digital sparks flew after an engineer described a three-phase construction plan, and project attorney Frank Vitolo explained that “if the bottom falls out of the economy” and the second of two office buildings cannot be built, the developers would return to the town and seek an amendment to the plans.
Those plans, approved conceptually by the town council last October, call for Scotto Properties and SJP Properties to transform Scotto’s now-closed Midtown Shopping Center strip mall at Morris and Spring streets into nearly 400,000 square feet of offices and retail, with a parking deck, promenade, plaza and traffic roundabout.
Two office buildings, standing seven and six stories, are at the heart of the proposal.
A proposal that pre-dates the pandemic, the worst unemployment since the Great Depression, and 5,000 layoffs announced by M Station’s presumed anchor tenant, the Big Four accounting firm Deloitte.
Resident Stephen Zaklukiewicz, participating by phone, raised the specter of a half-finished lot full of construction equipment, and suggested residents should be told now exactly what alternate uses are contemplated if the second office never gets off the ground.
Things heated up when Zaklukiewicz repeated the word “negligence,” which town Planner Phil Abramson had uttered earlier, in a hypothetical context, and retracted after an objection by Vitolo.
“I think you’ve proved my point for why I brought up the objection, for people like you who will take it and run with it and try to imply that there’s some negligence here. Thanks for proving my point, Mr. Eye-Chart,” Vitolo said to the resident.
Previously, board Chairman Joe Stanley had good-naturedly recalled a conversation in which he struggled to pronounce Zaklukiewicz’s name, and the resident had made a reference to an eye-chart.
Zaklukiewicz started responding to Vitolo’s “ad hominem attack,” when Stanley muted him and asked everyone “to be civil.” Mayor Tim Dougherty then asked board Attorney John Inglesino to explain how the town can protect against the scenario painted by the resident.
‘THE WORLD HAS CHANGED A BIT’
“We understand the world has changed a little bit,” Inglesino said, acknowledging our “COVID environment.”
If economic factors prevent construction of a second building within a reasonable time frame, “or if ever,” the developers could propose some other use for the property, Inglesino said. But the town could impose constraints now, in a redeveloper agreement, he said.
That agreement with the town council would be required–after planning board approval of the site plan–for construction to start, Inglesino said.
Another big question in the redeveloper agreement: Will the town grant M Station a controversial tax break called a PILOT?
Payments in Lieu of Taxes have spurred local political opposition because they cut out taxes for the Morris School District. An M Station spokeswoman says a PILOT may be needed for the developers to finance off-site traffic fixes–the roundabout and a realignment of Spring Place–desired by the town.
That’s in negotiations, and has not come up before the planning board, which is weighing M Station’s site plan.
Thursday marked M Station’s fourth appearance before the board. The last three sessions have been conducted online because of the pandemic. M Station returns to the planning board, via Zoom, on June 18, 2020, at 7 pm.
Civil engineer Sony David laid out a three-stage construction plan on Thursday.
After demolition of the vacant storefronts on the four-acre property, the six-story M East office/retail and half of the six-floor parking deck would go up as phase one. The promenade along Morris and Spring streets also would be created.
The second stage calls for the realignment of Spring Place and installation of traffic signals there — a process David estimated could take three- to five months — and construction of the roundabout at the intersection of Morris and Spring streets.
While the roundabout might take six months to a year, David said traffic could keep flowing through the intersection during much of the work.
Lastly, the seven-story M Station West building and remainder of the parking deck would go up.
If tenants are found quickly for that structure, both buildings could be erected almost simultaneously, Vitolo said.
Alternately, he described the staggered approach as a “‘look’ period… where we’re waiting to lock up tenants in the second building.” The duration of this interim stage is being discussed with the mayor and town officials, as part of the redeveloper agreement, the lawyer said.
IF YOU BUILD IT, WILL THEY COME?
Thursday’s planning board meeting unfolded during a week of grim economic news, including the highest national unemployment rate since the Great Depression and warnings of years of pain ahead.
But the mayor said he felt “positive” about M Station.
“In this environment, I think Morristown a very attractive place for a lot of companies that want to move out from bigger cities,” Dougherty said, while emphasizing the need for a solid agreement.
Is Deloitte still interested in moving from Parsippany to Morristown?
The Big Four accounting firm is slated to occupy M Station East in the project’s first phase. That announcement preceded the pandemic, and 5,000 layoffs nationwide by Deloitte.
“By all indications, they are fully committed to the project,” M Station spokesperson Jordan Rankin told Morristown Green this week.
Morristown Green reached out to Deloitte and will update this story with any response from the company.
UPDATE: On Friday, Deloitte spokesman Paul Dunker told Morristown Green: “Thanks for reaching out. Yes, Deloitte continues to be committed to the M Station development.”
Although many employers have adopted work-from-home strategies during the pandemic, Rankin said M Station’s developers remain confident of demand for high-end offices, and they are not contemplating scaling down the project.
“We’re still in the early stages of understanding how the pandemic may impact companies’ commercial real estate strategies and their space requirements. From the conversations we and many of our peers are having, it’s clear that companies in many industries see having an office as critical to their culture and facilitating efficient operations,” Rankin told Morristown Green.
“We anticipate that these companies will want to have their offices in high-performance buildings situated in dynamic downtown locations. For these reasons, we believe M Station is strongly positioned and have no plans to scale down the project,” she said.
PILOTS, REVISITED
The town, meanwhile, has disclosed that M Station seeks a PILOT.
Payments-in-lieu-of-taxes are an inducement to redevelopers who otherwise might back away from blighted properties, resulting in no taxes at all, town officials have said in defense of prior deals.
PILOTs have become an issue in recent council- and school board elections. And they have riled some Morris Township residents, whose taxes help support the regional Morris School District.
Specifics of M Station’s request have not been released. It’s not a public document because it has not been presented to the council yet, said town Administrator Jillian Barrick.
M Station may need a PILOT to finance the roundabout and realignment of Spring Place, according to Rankin, the project spokesperson.
Negotiations for a PILOT in the redeveloper agreement stem from a study of off-site traffic improvements requested by the town, she said.
“The M Station project is going to pay for these infrastructure improvements; under New Jersey law, a PILOT is the legally authorized mechanism that New Jersey has set up in order to provide capital financing for these types of significant infrastructure projects,” Rankin said.
On Tuesday, the town council hired Nassau Capital Advisors LLC for advice on M Station’s request. The developers will pay for the service.
At least six Morristown projects have received PILOT deals. They include the triangular Fox Rothschild office and a neighboring apartment building under construction on Market Street; the Modera 44 and Modera 55 apartments buildings and the CVS pharmacy, all in the vicinity of Speedwell Avenue; and the Metropolitan Lofts apartments on DeHart Street.
BITS AND PIECES
Stefan Armington, the council liaison to the planning board, suggested M Station could create a park if the second office/retail building doesn’t happen.
M Station will add a round of air quality monitoring, after the stage one of construction, Vitolo said in response to environmental questions by Armington.
The developers initially only had committed to testing behind the parking deck once the project was completed. The deck will abut the Spring Hills assisted living center.
M Station traffic consultant Matt Seckler also attempted to reassure Tom Lade, owner of County Rentals on Lackawanna Place, that he won’t be losing precious parking spaces in front of his business after all.
Morris County, which has jurisdiction over Morris Street, wants to expand Lackawanna Place, a town road, to create two-lane access. Seckler said it now appears this may be accomplished without eliminating parking spaces.
Vitolo said M Station also has started talks with the Morristown Parking Authority and the Morristown Partnership, a business organization Vitolo formerly chaired, about sparing other parking spaces along Morris Street that were in the cross-hairs because of the project.
Matt – I do own property in Chester, as well. The value has not declined, as you stated, and the taxes on it are 1/2 of Morristown’s. Maybe check into how Silverman Group’s legal fees, which Superior Court Judge Stuart Minkowitz ordered to be paid by the town, are actually being paid. They have now filed yet another suit against the town. By the way, there is a very much needed courthouse. The current one is not a safe structure for all the lawyers who are to defend the Mayor, Town Council, Planning Board, etc. against charges filed against them. This government is corrupt. You’d have to work hard, or be blinded by dollar signs, not to see it. I am optimistic that it will be brought down quicker than a confederate statue.
O, Charles. You and your sock puppets again. I own more than one Morristown property and live in town. I moved here specifically for the food, bars, entertainment, and growing lively atmosphere. I don’t like to see that stuff halted by people who cant understand basic economics and like to brow beat people by claiming they don’t live in town. Buddy.
MG has my email with my last name in it on every post I make. They can easily verify me but I’m sure none of that matters to you so you can keep convincing yourself you’re right.
Having some experience in real estate development, I can say the trend for office space to relocate to our downtowns with rail is the trend. Major developers have recognized this for years.
LOL don’t ever call me a puppet…
I live in Morristown and I own a home in Morristown. I am in my 20s. I love watching Morristown become what it is and all the bright sides the new development has for all of us. Of course there are growing pains and some developments that just plain suck.. but we have to move FORWARD, not backwards. The Morristown of the late 90’s, early 00’s was a disgrace.
Connor and the other sock puppets are obviously someone’s PR attachment. MG has opted to let this be an anon free-for-all and they take advantage of that. Interesting how we don’t see Connor and Matt and Co. over on Nextdoor. Didn’t even see ’em on FB the last time I checked MG’s FB page. Fascinating stuff that they for some reason don’t chime in on something like Nextdoor that requires some amount of verification. 🙂
It’s an interesting approach to just attack residents, but hey, that’s how they do business. The project itself is kind of an attack on the town. I think they’re now claiming actually PILOT is good and that not paying taxes is GOOD for other residents. LOL, buddy…
Please, raise your hand if you live in Morristown and utilize MMU for your travel needs!
Anonymous citizen – are you really suggesting those towns increased in value proportionally to Morristown’s downtown over the last ten years? Can you explain in your own words why someone would pay 3k for a 1 bedroom apartment in downtown Morristown, and not pay that in Chester? (Charles cannot, he would rather call the developer greedy and evil because he does not understand an economic exchange takes two parties, both benefiting from the transaction to engage in it).And please tell us the average rise in home prices in NJ versus the downtown area of Morristown in the last 5 years. If you can answer my questions above, you will find your answer as to whether it is truly local demand driven price increases (aka people wanting to live in an urban center with bars, lots of food, entertainment, and if possible, walking distance to work) rather than a general rise in home prices.
I answered all of mtowngrl’s questions with rhetorical questions like I’m doing to you because answering my questions should provide the answer to hers and yours.
and apologize to mtwngirl for assuming a relationship to mtownguy – LOL. It was joke.
The values in Mendham, Chester and Bville have actually gone down significantly over the years, since the recession… Bad point
Chas. Sprickman, the airport has roughly 200 flights per day, but it handles mostly private and business traffic.
Just because you aren’t on any of them means nothing. You can now call me “Mr. Bus Driver” ’cause I just took you to school!
LOL, yeah, every time I vacation, I zip over to the Morristown Airport to catch a flight, what are you smoking my fine business leaders Jeff and Connor?
I personally think ” Connor” is Frank Vitolo, Scotto’ s lawyer.
Change my mind 🤷🏽♀️
Anonymous Citizen, does Whippany own Morristown airport? I think not! Did you notice that it’s not called “Whippany Airport?” Just asking…
Jeff – I pointed only to his claim of WHY he said property values had risen in Motown. The disparities in the “hub” and “small rural towns” doesn’t need pointing out. Connor said – “How about the huge rise in property values due to people wanting to move and enjoy the continued development, thereby increasing the revenue while holding the tax % the same?” I contend that the huge rise in property values is NOT due to continued development if the other towns do not continually develop and their values increase as well. If your attitude is about telling people to move if they have a different opinion than you, then you are near-sighted and closed-minded and need an education on how government should work. My roots here have a long history. My grandfather lived on Early St., wrote political articles for the Newark Evening News and started the Morristown Bureau of the paper in the late 1930’s. So, I do understand the town’s growth, and don’t plan on moving anytime soon because you think I should. And by the way, the airport is technically in Whippany.
Anonymous Citizen, Connor doesn’t need me to to defend him, but I have to say that he is consistently correct. Let me add that Morristown is unlike Bernardsville, Mendham, Chester. They are small rural/suburban communities. Morristown is an urban regional hub. Like it or not, it is really a small city. It has its own airport, large medical center, county, state, and federal government offices,nightlife, shopping, rail service, its own freight railroad, a performing arts center, and more. It punches way above its weight. Most of Morristown’s residential ‘hoods have been unaffected by what’s happening downtown. Are they building apartment buildings in Cutler Park? If you live in Morristown and don’t like what’s happening, you can move, or just avoid downtown.
Connor – 1. Do you not see that you failed to answer any of the questions posed to you and then accuse others of not answering yours? 2. Do you agree that residents with concerns should have their mics muted? 3. After sarcastically assuming a connection between mtowngirl and Mtown Guy when there was none, do you not at least apologize for your mistake? 4. Do you recognize that property values in nearby towns have also gone up without major development such as this? (Bernardsville, Mendham, Chester)? It may not be, as you said, due to people “wanting to move and enjoy the continued development”. Now, just like after 9/11, they are moving out of NY. Property values should continue to rise on their own, office space or no office space. 5. FYI – the use of sarcasm does not make your point any clearer or any more correct.
mtwngrl – you crack me up. your experience with your Deloitte friends doesn’t answer my question. You are stating you know the office needs of a massive company better than they do! Why would they ever sign a lease for a building they don’t see they need? Should they have consulted you before signing?
Margret – c’mon now. Are you talking direct tax payments? How about the huge rise in property values due to people wanting to move and enjoy the continued development, thereby increasing the revenue while holding the tax % the same? Market and South St 10 years ago were better for the town than it was today? Because every project doesn’t meet revenue expectations, we should not develop anything? that is my main problem with the constant criticism. It is not helpful or pro smart development, it is the misconception that not developing will be better for the town and residents which couldn’t be farther from the truth.
There is nothing to indicate that this type of redevelopment will benefit Morristown taxpayers in any way. Loss of revenue in the decades, it often takes for these redevelopment projects to be completed, can result in reduced revenues for that period. By the time the project is completed, a change in conditions and trends can lead to other problems.
Often the promised public amenities are never built. The potential income from this projects rarely meet expectations. The Epsteins project which was built with another concept and opposed by Town officials at the time, has successfully fulfilled its promise but the portion on Market and Bank Streets, taken over by the Town has not performed as well.
The only consistent source of reliable income has been owner occupied housing, which continues to be a asset to both the Town and the homeowners. I still fail to see why listening to the homeowners and voters has become so difficult for the Town administration.
Connor-Thank you for the feedback that contains absolutely no facts. Let me ask again…Has Deloitte’s interest in the project or scale of the project changed with the influence of the last four months?? Do they have a representative that will be testifying to their needs at the hearings? And personally, I know a number of people that work at that firm, both corporate and as consultants. The corporate ones work from home 100%, even pre-pandemic. And the consultants, who are their primary workforce, tend to be on the road Monday-Friday…its the natural of a consulting firm
If you actually read my previous comments for content, you would see I am not against the redevelopment. I am against the scale of it. Against the fact that it is grossly under parked which in the long run leads to failed projects. I am against the developer skating by with a half ass traffic study that does not address the town beyond that ridiculous traffic circle. I am against the fact that the Mayor is being sued for his involvement in the denial for Deloitte’s previous proposal to be in Town. The project is clearly being fast tracked to approval, anyone with a smidge of intelligence should be able see that
And for the record…I am not affiliated with mtownguy, but I do agree with his comment!
Connor-Answer the question…Has Deloitte’s interest in the project and/or scale of their needs been affected by the recent months??? Do they have a representative on the agenda to testify at the hearings? I personally have a number of friends who work for that firm, all of which are 100% work from home, even prior to the pandemic. They are a consulting firm…their main work force are consultants… who, by nature of their jobs, are on the road the majority of the time
If you actually read the content of my comments, I am not against the redevelopment of the property, I am against the scale of it, it is extremely under parked which only leaves to problems and unsuccessful projects in the long term. And the developer has done a half ass job with the traffic study. Its being railroaded through to approval, and any intelligent person can see that
Also– I want to sell my condo to find a home to buy and do you all know how hard that is right now. I am getting outbid and outbid time and time again. Morristown is one of NJ’s premier markets and yes, these developments are keeping our time alive and our taxes lower.
If you want NOTHING to change and our town to deteriorate, have fun with higher and higher taxes.
Mtown girl now has a guy. Excellent! Mtowngrl – its not common sense questions. You will not accept any answers if its positive toward the development. And I’m sure your well educated on Deloitte’s office space needs because you read an article on layoffs from a one time contagion, even more knowledgeable than Deloitte themselves on the issue that you can plan their future office needs!
Rob – that strip mall and parking lot has 0 “Morristown” character.
PILOTs for non-residential buildings are extremely common. Why is it that people keep saying these programs rip off tax payers? Will these same people acknowledge all of this development and income has kept their property taxes relatively flat in recent years? Will they acknowledge the increase in their home values because of it? Margret? Charles? Mtwngirl ? Feel free to answer just one of my basic econ questions from any one of my posts.
Correct me if I’m wrong, but PILOTS allow the developers to not pay school tax assessments. So who still has to pay those school taxes? Morristown residents. So yes, our taxes will go up a little. If we say NO to PILOTS our taxes could go down.
Again, PILOTS costs taxpayers NOOO money
Meeting “get’s hot?” I admit it peaked my interest. When I read that a tax paying resident had his mic muted, I could not believe it. Thinking that he really must have caused a disturbance, I had to read it a few times. Because he mentioned negligence?? Familiar with the term, and the town, I believe it was appropriate. Not only that, the town attorney was rude, sarcastic & inappropriate in referring to him as “Mr. Eye Chart”. No wonder the town & mayor get sued. So, being a good detective, I checked out the resident, Mr. Zaklukiewicz. I sure think he is qualified in the term that he chose, being an attorney. Then I viewed some prior meetings. He has done his research, knows the facts, and his questions were clear and obviously well tiought out. He had asked about a professional relationship and was told his question was not fair. Why not? But then they went on to, quite frankly, over explain it (Phil’s affiliation), as if on the defense. He had always been respectful and the council did not return respect to an intelligent man with a vested interest in his property and the town in general. Makes one wonder, who is paying who over there? Who is on the take, and for how much? Enough to justify being nasty to taxpayers with legitimate concerns?
What’s fun about this is that the parking is 2.5 spots per 1,000 square feet, an incredibly low number that is not enough. Who is planning this mess? Why are RESIDENTS being asked to cover a TAX ABATEMENT for Scotto’s money printing machine?
By vacant strip mall they must mean the one they are kicking the existing businesses out of. That strip mall is not vacant. Morristown is losing its character with the construction of all these generic 2010’s chic buildings.
I can tell you what is going to happen … Morristown will go bankrupt with Lawsuits , Not including the Silverman group suit , Iron n Revolution bar , Spring street , Speedwell .. FYI .. The Mayor is being sued too . We will be left with a vacant lot and Fattys won’t get their prime location that they got in exchange for going along with Mstation ….
I think this project should be put on hold to say the least as no one really knows where the economy is going. It is well known that office space needs are not what they were with people working from home and sadly others being laid off. If it is built and remains vacant as did much of HQ up the street, the losers become the residents. The town is becoming saturated with apartments right now and we do not need empty buildings built on speculation even though a tenant claims to have a lease.
Build it already! Or at least knock down the vacant strip mall now.
I still think the project should be put on hold given the reduction in need right now for office space. Companies are reducing the amount of office space with people working from home, and sadly people are being furloughed and laid off. In the atmosphere where no one knows for sure what the future holds, this may become a blight, the real losers become the residents. I still am reminded of HQ up the street and the empty spaces in both office and retail. The board should put the brakes on this project.
‘ended with the board chairman muting the resident from the virtual meeting’ Hmmm…doesnt seem quite legit to just hit mute and remove someone from the meeting
The new attack mentality, if you challenge anything with common sense, you get shut down. It seems like a legit question, Deloitte announced major layoffs, and that was the big carrot they have been dangling in front of this pre-approved project