Frequently Asked Questions
1. What is the status of the properties to be developed?
All properties in the Union Hotel Redevelopment Area have either been purchased or are under contract. 82 Main, The Potting Shed, and Flemington Fur have been purchased. The Union Hotel properties are under contract. The purchase of the Police Building from the Borough will occur per the Redevelopment Agreement.
2. How much will the Police and Bank Building be purchased for from the Borough of Flemington?
It is under contract for $1.1 million. In addition, the land tax value will come back on the tax roll, further benefiting the Borough from a tax perspective.
3. Where will the police department be housed if they no longer have their current property?
The Borough has various options under consideration to relocate the police building which will be coordinated with the development timeline.
4. Can the size of this development be smaller?
We continue to explore these options with various municipal stakeholders. See the proposed plans.
Flemington needs more people. The project needs to be an attraction for not only residents, but to draw people from outside the community that will spend money locally.
The size and density of the project is dependent on many factors. A mixed-use town center like Courthouse Square requires a variety of uses to be successful. These uses impact parking and infrastructure requirements which when added to the property acquisition costs determine the size and scale needed to obtain an acceptable return to a developer taking the risk.
The Union Hotel is being rebuilt and expanded to 100 rooms. Multi-family housing is being added to attract new residents to Flemington in a walkable mixed-use community. The combination of a larger rebuilt Union Hotel together with residential units with attractive amenities increases the parking required to support the project.
The biggest challenge is dealing with the parking requirements of both cost and number of spaces needed. We have explored a variety of scenarios to reduce the on-site parking needs. If an alternative scenario could be deemed feasible, it would allow the building heights to be reduced.
5. Will the Borough of Flemington be negatively impacted financially from a real estate tax standpoint?
To the contrary, there will be a significant positive tax impact to the Borough of Flemington. Through a PILOT program the Borough of Flemington stands to increase their operating budget by 10% as summarized by an independent report prepared by the Otteau Group. For more information on the PILOT, click here.
6. Can you clarify which buildings are being preserved?
As per our agreement with the New Jersey State Historical Preservation Office, the developer has agreed to preserve and restore the exteriors of the Union Hotel and the Hunterdon County Bank Building to their original form.
In addition to the above, we are working on a settlement that includes saving the Potting Shed. View the proposed plans.
7. What assurance do we have that the developer will complete this project?
The Redevelopment Agreement calls for proof of financing before any construction activity can begin. Any bank financing will require both personal guarantees and completion guarantees together with a substantial amount of equity contributed by the developer, which is normal of any Construction project financing.
As developers, we have been responsible for the creation and development of a variety of successful operating companies which currently employ more than 1400 employees throughout New Jersey and New York. In addition, we have developed more than 1,000,000 square feet of real estate and have already invested significant capital into this project. For a Bio of the developer, click here.
8. Are there market studies that support this project?
There are several reports and studies available to support this development. The Hunterdon County Economic Development Study (CEDS) report indicates there is a significant need for multi-housing and mixed-use town centers in Hunterdon County. There is an Economic Impact Study detailing the many positive benefits to the Flemington community. Click here for access to the various reports.
It needs to be noted that Diamond Nation currently utilizes 14 hotels for its customer base of which the majority are in Somerset County with tens of thousands of room nights. The new expanded Union Hotel will accommodate and attract customers that will provide a positive economic impact to Main Street. Based on our extensive network, much of the retail and restaurant space has tremendous interest while some has already been committed to.
9. What college will be in downtown Flemington?
Georgian Court University has signed a Letter of Intent to be an anchor tenant in Courthouse Square and be the first higher education institution in Hunterdon County. To read the Press Release, click here.
10. Why is the developer holding the liquor license in a separate entity? Is courthouse square assured of having a liquor license?
There will be a liquor license dedicated to Courthouse Square.
It is important to understand the history of the Liquor License. It was being auctioned off at a Bankruptcy proceeding and was in jeopardy of being acquired by one of the largest liquor outlet distributors in the state of New Jersey who intended to develop a liquor outlet out on the highway which would have a detrimental effect on Main Street. The liquor license was purchased in 2015 by Jack Cust Jr. before being designated the Redeveloper to preserve its use for Courthouse Square.
Jack Cust Jr. is the sole Member and owner of Stagecoach Liquors LLC which currently holds the license. It is common practice to hold a liquor license in a separate entity for a variety of legal and insurance reasons. The Redevelopment Agreement does not have a provision that requires this license to be held by Flemington Center Urban Renewal, LLC.
The following excerpt is exactly from the Redevelopment Agreement:
Article 10, Section 10.1 Liquor License. ‘The Project shall require a liquor license for use with the hotel and restaurant portions of the Project. Redeveloper may secure a liquor license in connection with the construction of the hotel with at least one hundred (100) rooms. The redeveloper has secured another liquor license in the Borough which liquor license shall be utilized for the Project in the event that Redeveloper does not secure another liquor license in connection with the 100 room hotel or otherwise. So long as this Agreement remains effective and has not been terminated, Redeveloper shall not sell or convey the liquor license it currently owns unless and until it has fully-secured another liquor license for use in the Project. This shall not preclude Redeveloper from use of the current liquor license during the implementation of this Project so long as it is reserved for the Project for use in the Completed Project pursuant to this Agreement. This provision shall not survive the termination of this Agreement.’
11. What is the status of the current Lawsuit brought upon the Borough of Flemington by the ‘Friends of Historic Flemington, LLC’?
Both the Developer and the Borough have made attempts to resolve the lawsuits brought by the Friends of Historic Flemington LLC (“Friends), in order to come up with a compromise that works for all parties. All efforts have come with little to no compromise offered by the Friends. We continue to work towards an amicable solution and you can see our latest efforts here.
12. Will the infrastructure that is needed for water and sewer be paid for by the Borough of Flemington or the developer?
All infrastructure costs needed for this project will be absorbed by the developer. A new well is needed regardless if Courthouse Square is ever built or not, the developer has agreed to contribute $2M towards the construction of the new well to replenish its reserve capacity which will benefit all future development throughout the Borough.
13. Who is paying for the parking garage?
The developer is paying for the parking garage.
14. Is there a traffic study proving that downtown Flemington can handle this project?
Yes, our traffic engineers have completed a Traffic and Parking Study for Courthouse Square and it has been available to the public on the Borough website for quite some time. Successful traffic flow and parking is as important to us as developers to ensure the project’s success as it is a concern for the citizens that live here. A final plan was presented to the planning board that will ensure the required parking and traffic circulation is appropriate for Main Street. To read the Traffic and Parking Study – click here.
15. How will the current retail stores in Flemington be affected by this new project?
This project will only enhance the current retail stores and restaurants ability to be more successful as there will be more people living and visiting in Flemington.
16. Is the retail area going to be like a strip mall with chain restaurants and stores?
No, we have no plans of attracting national tenants with big box names. We envision a unique mixed-use of restaurants and shops that will be a compliment to Downtown Flemington.
17. What determined the parameters for the PILOT agreement between the Borough of Flemington and the Developer?
The Redevelopment Committee and the Developer determined very early on in the process that the use of a PILOT was necessary in order to make the project happen as normal taxation would deem the project not feasible due to many factors, some of which include, infrastructure costs, parking needs, cost of land acquisition and added costs to save the Union Hotel and the Hunterdon County Bank Building.
The Redevelopment Committee and the Developer negotiated a formula that provided the Developer with the necessary returns to construct the project while improving the Borough’s tax base by approximately 12%.
Councilman Michael Harris insisted on an independent professional report to confirm the fairness of the PILOT, which the Developer agreed to. The Borough of Flemington then selected the Otteau Group to do the independent analysis.
As illustrated in the Otteau Report the project achieves initial returns of approximately 6% to the Developer with an overall projected internal rate of return of 8.4% in Year 30. These returns are typical and acceptable; however, anything less would not warrant the risk to construct the project as lower returns can be achieved in more passive fixed investment alternatives. The Report also states that returns on the project without the use of a PILOT are not sufficient and, therefore, the project is not feasible without it.
The Otteau Report also determines that the Borough will receive on average $694,126 annually or a total of $20,823,786 over the 30-year period. It should be noted that the Redevelopment Law protects the Borough of Flemington by restricting the returns to a developer to a max of 12%. Should the project yield a return over 12% those dollars would come back to the Borough.
The end result of the negotiated financial agreement (PILOT) is that it is a fair deal for both parties and accomplished what the Redevelopment Law was created to do which is provide financial assistance to make projects work in areas that need Revitalization while protecting municipalities in limiting the upside return to developers and allowing the municipality to retain 95% of the taxes generated from the project.