Rebuilding: Fort Monmouth – Part 2

The first part of this series covered the background of the closure of Fort Monmouth as well as the economic impact behind of the closure for the region and the State of New Jersey. The entity tasked with the redevelopment of the former military base, FMERA, made a decision which brought the first corporation to relocate to the site. This decision was bold, and at some points controversial, as have so many other decisions relative to the rebuilding of this huge site.

The CommVault Land Sale

The first evidence of the philosophical shift by FMERA in the redevelopment of Fort Monmouth was the purchase of 55 acres of land by CommVault Systems Inc., for $5.9 million in the Charles Wood section in Tinton Falls for the purpose of constructing a new corporate headquarters (www.app.com). The land was originally put aside for residential use, but because of the location of that plot of land near major roadways, FMERA made the decision to approve the sale of the land to CommVault.

Some social justice groups protested the sale because they feel that the need for housing, particularly affordable housing, is being ignored by the FMERA board in their plans for the redevelopment of the site (www.app.com). In fact, I can understand both sides of the scenario surrounding the CommVault land sale.

 The FMERA board saw an opportunity to bring in a high-tech sector company that has agreed to create a specific number of new jobs as part of the land sale.  They can also use the new corporate headquarters as a centerpiece of a development of commercial buildings including retail space on that part of the site.

The social justice and housing advocacy groups continue to feel like the requirements for housing are not being met, and that it was not right that the committee switched the land use on that tract in the Charles Wood section from residential to commercial. I followed the story every week in the local news and it was a big issue until the board made some other announcements regarding the development of housing on the former fort site.

In the wake of Hurricane Sandy, the housing market in Monmouth County is faced with a lack of supply and increased demand. The rental market has very limited availability and the monthly rental prices on average have increased due to the lack of rental inventory.

The redevelopment of the former Fort Monmouth site can address the supply issue with regard to housing especially rental and affordable housing for those individuals who qualify. The unknown variable in this equation is whether FMERA will be able to develop relationships with the appropriate developers to bring the right mix of single family, rental, and affordable housing units to the site.

Shifting Priorities

The FMERA board recently hired the firm of Cushman & Wakefield to assist them in marketing and positioning the land for sale and development by the prospective interested entities (www.app.com). The firm has stated that the Myers Center and the adjoining twenty acres will be positioned for sale as off-site server storage for technology based companies.

The board also announced that there will be no speculative construction of commercial space due to a surplus of unoccupied commercial office space in other parts of Monmouth County, the region, and throughout the entire state of New Jersey. This was a shift in the priorities away from the original plan which had very specific and detailed requirements for commercial space.

In my view, the shift is probably a very shrewd decision, while I had originally hoped for the former fort to become a place where my friends and neighbors could find jobs, that is not the reality of the current economic situation. The “if you build it, they will come” philosophy has proven to be ineffective when it relates to commercial real estate. I pass by so many empty office buildings and factories when I drive through the area.

The land at the fort site has to be utilized in a way that is most effective and provides the most economic impact possible. It would be an embarrassment and a waste of resources to replace the deserted fort buildings with several empty commercial buildings. It would not make sense, and it would be economically untenable for the townships involved and the county.

However, the local residents and other interest groups maintain that FMERA needs to develop “out of the box” solutions to incentivize more commercial use on the property of the former military base. The drive behind this movement is the need for more ratable tax revenue following the devastation of Hurricane Sandy. I have written articles in the past about the effect of Sandy on tax revenue for towns in both Monmouth and Ocean County, the damage from the storm has caused massive problems for the ratable tax base in several of those towns.

The Fort Monmouth site is viewed as a unique resolution to the loss in tax revenues for the area. The challenge becomes finding the right corporate or industrial tenants as well as considering the site for other purposes which provide higher tax revenue returns. The thought process being played out currently by some interested parties involved is that FMERA has to think beyond the tax revenue returns from housing, retail, and a few high-tech corporations. The site could be utilized in a more impactful way to close the tax revenue shortfall.

The board also announced that the hotel planned originally to be located next to the Sun Eagles golf course has been scrapped (www.app.com). The economic conditions do not make a hotel sensible for that site at this point. However, the FMERA board did state that a hotel could be constructed in the future in a later stage of the redevelopment process in order to support the other commercial businesses that may relocate to the fort site.

The land next to the golf course will most probably be developed as patio housing, which makes a great deal of sense from a real estate perspective at this point. Those types of housing communities have been successful in other parts of the county and in Ocean County as well.

The FMERA board has been in negotiations with the developer, KHOV West regarding a plan for the construction of 275 townhouses on the former Howard Commons site in Eatontown (www.app.com). The meetings have been ongoing for months, and the latest announcement is that it could be another 12-15 months until the old buildings are demolished.

Howard Commons is a large tract of land (64 acres) in Eatontown that was formerly used as housing for some of the military service personnel on the base, and it has been vacant for about 20 years (www.app.com). The 475 units of military housing have become a vacant wasteland where the New Jersey State Police have had to deal with vagrancy issues. The residents want the housing units demolished as soon as possible, but as I detailed earlier, it is against BRAC law for the Army to demolish any structures on the site.

FMERA has stated that the money for the tear down of the buildings will come from the developer when a deal is reached for the rebuilding of the site. The developer will then have to bring in a contractor to handle the demolition process (www.app.com). The contractor will have to be approved by the FMERA board and will also be responsible for obtaining the local government permits involved to complete the demolition activity. This will all take approximately 12 months or longer.

The residents in Eatontown are upset, and understandably so, and in some other local news reports some groups were critical of the Army for not tearing down the blighted housing units at Howard Commons before the operations at the fort ceased and relocated to Maryland.

The next part in this article series will focus on the reusability of the older buildings on the base. It will also detail the latest plans for specific parcels of land.