Mixed Use Project In Peapack-Gladstone To Start In Phases

October 16, 2023

PEAPACK-GLADSTONE – With new state environmental rules stalling much of a planned redevelopment of the commercial zone along Lackawanna Avenue, construction will start in phases.

The Land Use Board voted unanimously on Wednesday, Oct. 4, to waive the submission of a site plan and allow the developer to renovate the former Bevel Saddlery building at 10 Lackawanna Ave. to house nine commercial tenants. The review lasted more than 90 minutes as board members weighed the potential impact of a site plan waiver on other aspects of the project, including an affordable housing component.

In the end, they saw no harm in proceeding so long as certain conditions were attached.

“I’d sure like to see some activity down at the end of the road,” said Mayor Mark Corigliano. “It looks kind of lousy right now.”

The redevelopment plan grew out of an affordable housing settlement in May 2018 in which the borough agreed to provide 78 income-restricted units to meet its state-mandated “Round III” obligation through 2025.

The borough then worked with the developer, Far Hills-based Melillo Equities, to get 17 affordable units contributed toward that obligation. Melillo had contracted to purchase land on both sides of Lackawanna Avenue with a total of eight existing buildings.

In conjunction with state rules, Melillo would subsidize the cost of building the affordable units by being allowed to also build market-rate units plus commercial space.

The Lackawanna Avenue corridor would be redeveloped with 40 residential units including three with income restrictions, 18,700 square feet of retail space, and 21,150 square feet of office space. In addition, Melillo will make conversions providing six income-restricted units at 191 and 193 Main St., and another eight at 291 Main St.

In conjunction with the plan, the Borough Council rezoned the area in September 2020 to allow the permitted uses and density. Site plan approvals from the Land Use Board are still needed to start construction.

But that step has been put on hold while Melillo has sought to obtain a Letter of Interpretation (LOI) on wetlands plus a Flood Hazard Area (FHA) permit from the state Department of Environmental Protection (DEP). Moreover, the DEP in July adopted new rules that raised the design flood elevation by two feet, enlarging the Peapack Brook flood way and exterior flood plain. That extended the flood way line deeper into the southern part of the project, with the former Bevel building falling within the flood plain.

Seeking Storefronts

The application to the board for a site plan waiver was filed by 219 Main PG, LLC, which has the same address as Melillo Equities.

Nicole Magdziak, attorney for the applicant, told the board that a borough ordinance allows a site plan to be waived when the proposed improvements are not “substantial.” The board can impose conditions on such a waiver, she said.

Anthony Melillo, managing partner of Melillo Equities, said the former Bevel building previously had one lone tenant in two stories totaling 14,472 square feet. His plan, he said, is to have nine tenants in the first floor while eliminating the second floor and reducing the building size to about 10,000 square feet.

The goal is to have “small, Main Street-style storefronts,” he said. The existing structure, which he characterized as a “no frills stucco building,” would be enhanced with features like large display windows and brick piers.

“From Lackawanna Avenue, you’d be looking at a nice array of storefronts done an historic manner,” he told the board.

Additional improvements would be made to the parking lot, which would be milled, restriped and supplemented with plantings, while existing light poles would be repaired, he said.

Melillo said that in light of the new DEP rules, filing a site plan application would require the former Bevel building to be torn down, with more involvement from the DEP. He said if he could simply obtain a borough building permit, the building could stay since it would only be repaired.

He said he has three options – leave the former Bevel building as it is, with one tenant; tear it down and have a much larger parking lot; or allow the building to have multiple tenants as a means to pursue the building and streetscape improvements.

If the building and streetscape improvements proceed, they would be made in tandem with the completion of three of the 17 income-restricted housing units, he said.

Board member Chris Downing, however, expressed concerns about how the rest of the project would fare. He asked whether the planned 40 residential units could still “fit” on the project site in light of the new DEP restrictions. Melillo said they could, explaining that the typical size of a two-bedroom unit has shrunk from about 1,500 square feet a decade ago to about 1,000 square feet.

No Guarantees

Borough Planner John Szabo suggested that Melillo put together a phasing plan so the board can have a comparison between what the zone requires and “what we can expect in the future.” Mellilo, however, said it was difficult to make guarantees when the DEP still needs to rule on permit applications.

He stressed the importance of getting tenants for the former Bevel building, saying “this is a very large project” and he had already lost two Lackawanna Avenue tenants, including Cafe Sapori.

“In a worse-case scenario, you’ll have a beautiful building and a guarantee of three (income-restricted) units,” he said.

Mayor Corigliano said he was sympathetic. “You have to get things moving” and “fill spots” while facing uncertainty from the DEP, he said. “I know you want guarantees, I want guarantees,” he told his fellow board members. “But in a perfect world, I don’t know that you can expect that.”

He said the requested site plan waiver “has merit” and “would head us in the right direction.”

Melillo said if he were to obtain a waiver and a borough building permit, he could have the building ready for its first tenant around June 2024. “This is a built it and they will come,” he added. “There’s absolutely a demand for it. To have this kind of space in a non-strip mall kind of way is very desirable.”

As for the DEP process, he said he would be submitting applications for an FHA permit and other approvals by the end of this year.

Board Chairman Greg Yannaccone said action on an LOI request “could take a year, easily.”

David De Pierro of Main Street, who was the only resident to address the board, said he had no objections to a waiver but he questioned why there had not been a public notice of the hearing.

Board Attorney Roger Thomas said that legally, none was required because the request was not technically an application for development.

Under the project, both sides of Lackawanna Avenue would be redeveloped.

The east side includes 217 Main St., which houses The Stable car dealership; 219 Main St. at the corner, which houses Equitack horse equipment; 12 Lackawanna Ave., which housed Cafe Sapori; and 10 Lackawanna Ave., a vacant office/warehouse formerly occupied by Bevel.

The west side includes a house at 33 Lackawanna Ave.; Dominick’s Pizza at 31 Lackawanna Ave.; an office barn with a multi-bay garage; and an unenclosed parking shelter.

A conceptual plan shown at a joint meeting of the council and the Land Use Board in July 2020 called for five buildings, all with flat roofs.

Three were to be on the road’s east side, including a renovated version of the two-story Stable building at 217 Main St.; a three-story building in place of Cafe Sapori; and a renovated version of the former Bevel building.

On the west side were to be a two-story building and a three-story building, with the existing structures to be removed.

The 219 Main St. corner building that houses Equitack would be removed to make the entrance to Lackawanna more visible. The extra space would allow head-on parking on both sides of the road.

– W. Jacob Perry