From the APP:
The Hoboken developer building the 224-unit Esperanza high-rise on the city’s beachfront says it is temporarily closing down the construction site and sales office.
Dean Geibel, president of Metro Homes, said the company recently informed the city that it was halting construction and sales “until such time market conditions allow us to move forward and successfully complete this important luxury beachfront development.
“We are convinced that the national mortgage crisis now impacting real estate markets around the country represents a temporary setback, and we remain fully committed to Asbury Park and its rebirth,” Geibel said in a telephone interview Monday.
Geibel said there are sales contracts on about 70 of the condominium units in the two-tower building, which is three stories out of the ground and is being constructed on the site of the failed C-8 condominium project that dogged the city for 17 years until Metro Homes imploded the unfinished steel skeleton in the spring of 2006.
Geibel said the money people put down on their units is being held in escrow. “It’s too early to decide how they’ll be impacted,” he said.
The Esperanza promised buyers beachfront homes with hotel amenities in an architectural design that evokes images of waves and ships.
“I understand what they’re going through, and I do not blame them,” said City Councilman John Loffredo, who said that Metro Homes had told the city a couple of months ago that it might have to alter the design.
My City of Ruins
Bruce Springsteen
The Rising, 2002
Theres a blood red circle
On the cold dark ground
And the rain is falling down
The church doors blown open
I can hear the organs song
But the congregations goneMy city of ruins
My city of ruinsNow the sweet veils of mercy
Drift through the evening trees
Young men on the corner
Like scattered leaves
The boarded up windows
The hustlers and thieves
While my brothers down on his kneesMy city of ruins
My city of ruinsCome on rise up!
Come on rise up!
thats beachfront property. they don’t make anymore of it.
“This is an important milestone for the City as The Esperanza will surely serve as a beacon to the rebirth of Asbury Park”
– Larry Fishman, COO of Asbury Partners, the master redeveloper of the 56-acre Oceanfront Asbury.
In 1989, another condo project on that same site failed (“C-8”). Metro Homes imploded that skeleton in 2006 to make room for this project, the Esperanza.
Ironic that they implode a skeleton that served as a reminder of the last real estate bust (and the last failed “rebirth”) only to replace it with another.
From the NYT:
Now You See It, Now You … After a While, You Don’t
By JONATHAN MILLER
Published: April 30, 2006
ASBURY PARK, N.J., April 29 — The building, if you could call it that, was a rusty empty box near the Boardwalk that didn’t even have a name. It was known simply as C-8, for its place on the tax maps.
Since C-8 had become a symbol for the failed efforts to revive this old resort on the Jersey Shore, its demolition on Saturday was supposed to herald a determined rebirth.
…
“This is an historical event for Asbury Park,” Mayor Kevin G. Sanders said in a statement released earlier in the week. “As a lifelong resident, the C-8 structure was a failure of the past and I will be happy to see it taken down.”
But C-8 was itself supposed to usher in a bright future for Asbury Park. It was initially part of a $500 million project that was approved in 1986. The developer, Joseph Carabetta of Meriden, Conn., promised to build luxury condominiums and renovate the Paramount Theater, the Convention Hall and the Casino nearby.
None of that happened.
Union strife, a fading housing market, the bankruptcy of Mr. Carabetta’s company, court fights and other problems ensured that the building was never completed, and its rusting skeleton has stood, a block from the water, for more than 15 years.
Courtesy of The Boss;
Theres a blood red circle
On the cold dark ground
And the rain is falling down
The church doors blown open
I can hear the organs song
But the congregations gone
My city of ruins
My city of ruins
Now the sweet veils of mercy
Drift through the evening trees
Young men on the corner
Like scattered leaves
The boarded up windows
The hustlers and thieves
While my brothers down on his knees
My city of ruins
My city of ruins
Come on rise up!
Come on rise up!
I’m hoping this will only be a temporary setback. It will be a very sad development if Asbury’s continued rebirth doesn’t proceed.
This major RE market/financial earthquake, what a friggin’ mess.
The octopus’ tentacles just keep spreading.
Asbury Park = Newark by the Sea
I remember its first “re birth” during the 80’s and again during this last housing boom. Asbury Park is the reverse of Lazarus.
As a little kid… waaaay back in the early 70’s, I remember my parents taking me to the rides there. At that time, it got too rough to keep going (especially if you were white).
I came close to purchasing a “penthouse” unit over at Wesley Grove this summer (It was not the real name but describes it well). I am glad I did not. The unit was lovaly BUT the street away from the lake looked like the South Bronx on a bad day back in the ’70s. The Building itself was heavily vandalized, with broken windows and grafitti (much of it very angry and directed at the new residents).
About the Esperanza at Asbury Park, here is a link to the implosion of the ugly unfinished hulk that loomed over the boardwalk for years, which was torn down to build Esperanza: http://www.app.com/apps/pbcs.dll/article?AID=/20071210/VIDEO01/71210054&referrer=FRONTPAGECAROUSEL
I often passed that ugly structure and hoped for a “rebirth” of the town. The crime issue there is very real and intimidating behaviors occur. It is a shame that the city has lost or is losing the broad lawns that gave an expansive view of the beach and boardwalk. The “vision” of the redevelopment seems to be to turn it into a maze of highrises, not unlike the ugly development in Long Branch. Nothing would have been lost if the high rises had been pushed back a block or two. In fact, it would have spared the owners of expensive properties unwanted sounds from the boardwalk area.
The question I have for the RE profs here is whether, now that the project is on hold and it looks like the scope of the project will be changed, can the people who put down deposits back out of the contracts without penalty? They paid $X to get property Y but are now going to get property Z (if it gets built at all).
Shore Guy (8),
A realtor friend said that because the Esperanza is not completed, the contract people signed were “non-binding” and fully refundable.
The structure, in it’s current state, is non-performing.
I just shook my head when I read this story in last night’s Press.
But Asbury only has itself to blame. By not forcing Asbury Partners to begin redevelopment by fixing up the boardwalk and surrounding historic buildings, I could sense future failure on the beachfront, real estate downturn or not. Add in the crime problem, the lack of any attention being paid to the vast majority of dilapidated housing in the non-beachfront areas of town, and who’s going to want to buy?
As far as common sense goes, luxury condos and subprime loans have nothing in common.
People who buy luxury condos should not be subprime borrowers, so this is just a cop-out by the developer.
Where in this story does it say anything about subprime loans? But most borrowers wishing to buy in Asbury would need jumbos, which are now harder to get.
Another problem with sales in Asbury is the fact that so many other properties in better, surrounding towns are also up for sale. There are three right on my block in OG.
12 OG is a lovely town, despite being teathered to Neptune and despite the lack of land ownership and all that the CMA brings.
#9 Orion Says:
“December 11th, 2007 at 9:47 am
Shore Guy (8),
A realtor friend said that because the Esperanza is not completed, the contract people signed were “non-binding” and fully refundable.
The structure, in it’s current state, is non-performing.”
I assume that spells disaster for the project then. It was sold as an upscale property, yada yadda, and now they are indicating that it will not be. I suspect buyers (who knows how many were flippers) will head for the hills.
I am so relieved we did not pull the trigger this summer.
Orion (9),
It depends on the conditions of the contract. In contracts for new home construction the buyers likely could be locked in until the recision date stated in the contract passes. In other words these buyers may not be able to get their money back for another year or so.
PeaceNow (10),
I actually live in the Cookman Ave. area of Asbury. In the past three years Asbury Partners rebuilt the entire boardwalk, paved and landscaped all along Ocean Ave., and did a lot of work to the 5th Avenue pavilion including reopening the old HoJo’s. The beach was much busier this past summer than years prior. Also they did a lot of work on the Paramount theater and Convention Hall including all new storefronts and shops between the Paramount and Convention Hall. There was just a big tree lighting and fireworks display a couple Friday’s ago with a ton of people in attendance.
My point being a lot of work was done and it’s just a shame the redevelopment is kind of stalling out. I hope it’s just temporary. Asbury has so much potential. These developers just need to get realistic. Who’s going to pay $450k+ for a one bedroom loft off Cookman? Especially considering the sky high taxes and high maintenance fees…
It’s sad. A friend of mine and his BF bought a condo there last Summer. It’s a nice place, close to the beach. But there’s a lot of class antagonism in AP: They were egged while driving around town.
I had halfheartedly suggested that they wait till the Fall to buy (they could have saved $50-100k). But they bought the condo as a vacation home, not an investment. The wanted to enjoy this summer, and summers to come.
For them, I hope the AP revitalization isn’t completely stillborn.
I understand why you might need to close down construction but why the sales center and remove listings from the MLS? Does closing the sales center mean they are selling the complete sight and leaving Asbury? If the sales center was still open it at least tells everyone you will be back to build in the spring.
WRC(15)-
You’re right. It depends on how the contract was written and what stipulations were agreed upon. Hopefully the buyers’ deposits were in an interest bearing escrow account.
Jamie(16)
That egging episode is awful, first time I heard of such thing in AP. I understand there must be some degree of resentment amongst the long-term residents, but man, that is not a good sign.
AAG(17)
Who said anything about removing listings from MLS?
AAG(17) is correct, all the Esperanza listings were removed from the MLS.
#15″ My point being a lot of work was done and it’s just a shame the redevelopment is kind of stalling out. I hope it’s just temporary. Asbury has so much potential. These developers just need to get realistic. Who’s going to pay $450k+ for a one bedroom loft off Cookman? Especially considering the sky high taxes and high maintenance fees…”
I spent a fair bit of time in AP this summer, it was nice to see the activity on the boardwalk, to be able to buy Italian Ice there, and to see lifeguards guarding a clean beach. That said, I refused to be on the street after dark. Between the roving bands of “yuts,” — what’s a “yute?” — and the very angry grafitti directed at the new development, it is not yet ready for prime time. The city would have done better to develop 3-5 blocks from the beach with middle-class housing to get a non-welfare population base established and then follow up on the second beach block with the luxury properties and leave the first beach block to the Berkley, the Stone Pony, and Empress.
I would wager that the Esperanza project is “not just merely dead, it is really most sincerely dead.” The only question is whether anything can take its place utilizing the existing footers etc. or whether we just replaced one rusting hulk with a soon-to-be-rusting hulk.
WRC—Don’t know how long you’ve been on Cookman, but I remember reading story in the Press last winter about how city council had to force developers to start concentrating on the beachfront amenities, as opposed to the beachfront condos. And, yes, I agree: I was pleasantly surprised several weekends this past summer by the number of people on the beach (and on Cookman. In summers past, on a cloudy Saturday, I was the only person on the street. But there’s no denying that Asbury has a long way to go.
Shore Guy—The land ownership issue is really no big deal. My ninety-nine year lease will be in effect long after I expire, and the CMA has yet to figure out a way to raise the $10.50/year I pay for rent. Taxes are another story, as are the schools. But I have no kids, and town services (garbage collection especially) are generally outstanding.
Jamey—That egging incident is truly sad. But these kinds of incidents will be a problem in a town that seems to determined to pin all its hopes for revitalization on beachfront development.
Peace,
Which street are you on?
I helped them restore the carousel horses at Palace in the 80s. Then the guy(he also owned kramer guitar in Neptune) went bankrupt. They parted out the carousel and auction off the horses individually.
That just about sums up Asbury Park.
Interesting that North Beach is still going…. In the end I think we will be fine, there are so many other good things happing in the city. Maybe this gives Cookman a chance to catch up to all the hype on the Beach. I don’t think any builder in there right mind would not be back to work by the summer with all of the traffic up there.
I rode on that carousel when I was 6 and I am now almost 40. I never went back till about 2 yrs. ago and I was in a total daze to see the condition of things, I got to see where the carousel “used” to be thru a whole in the wall. I am a finacial broker now and I feel the need to step in and help……for what it is worth, IM WORKIN ON IT…