Unibail-Rodamco-Westfield has tapped Mill Creek Residential to build 550 luxury apartments around its Westfield Garden State Plaza in Paramus, in one of several mall redevelopment projects that are slated to take place in New Jersey. — Rendering courtesy: URW
By Joshua Burd
Redevelopment is coming to some of New Jersey’s largest malls, as owners and local officials weigh plans to add apartments, health care facilities and vibrant public spaces meant to infuse them with new foot traffic.
Proponents say the projects are essential to the long-term health of even the most successful assets. In other cases, they’re a potential lifeline to once-dominant shopping hubs that have become obsolete and seen their values plummet in recent years.
Those plans are now taking shape across the Garden State. In Paramus, developers hope to bring some 500 new apartments each to Westfield Garden State Plaza and Bergen Town Center, while Kushner Cos. is advancing a long-awaited, high-profile redevelopment plan for Monmouth Mall in Eatontown that includes housing, public amenities and a newly announced Whole Foods store.
Redevelopment is also underway at Moorestown Mall in Burlington County, which is slated to become a mixed-use destination with nearly 1,100 rental units, a hotel and an ambulatory care facility inside a former Sears box. Meantime, a Los Angeles-based firm has acquired Bridgewater Commons, presumably with plans to reposition the 1.2 million-square-foot complex.
“I would say that the mall’s success is the borough’s success, and vice versa,” said Michael Sommer, Kushner’s executive vice president for development and construction, discussing the firm’s redevelopment plan for Monmouth Mall in Eatontown. “And, as the biggest tax ratable in the borough, we obviously recognize the responsibility that goes along with that — and the borough has always recognized the importance of making sure that the mall evolves into something far more sustainable than it is today.”
Kushner’s vision for the site is nearly a decade in the making, but is moving forward with a recently approved redevelopment plan by Eatontown’s borough council. The April 26 vote paves the way for other steps such as submitting a site plan application, likely later this spring, for a project that calls for building 1,000 new luxury apartments, reducing and reconfiguring the existing retail space and creating a roughly two-acre public green that would become the new focal point of the 100-acre site.
The approval also came just weeks before the developer announced its 40,000-square-foot lease with Whole Foods, in another milestone for what will be known as Monmouth Square.
“We’re really working toward curating the right tenant mix here, as opposed to just filling space,” Sommer said. “And what does that mean? That means that we want to have the right tenant mix in order to create the environment we’re looking to achieve. But we’re also very mindful of the needs and the desires of the future residential tenants on site.”
It’s a delicate balance in a state that cherishes its indoor shopping destinations — with their food courts, department stores and vast parking lots — as owners and residents consider their future in a changing retail industry. Last summer, Unibail-Rodamco-Westfield announced that it had tapped Mill Creek Residential to build 550 luxury apartments around its Westfield Garden State Plaza in Paramus, with groundbreaking slated for 2024, while it also aims to create public green spaces and a Main Street to help integrate the newest components. The 30-acre project will largely transform the surface parking lots around the 2.1-million-square-foot property at routes 4 and 17, with plans that also include health and wellness amenities, office space, a transit center and community event spaces.
Such projects often follow years of planning and negotiations with local officials. Gary Albrecht, an attorney and co-chair of the real estate department at Cole Schotz PC in Hackensack, pointed to a tangle of zoning issues that need to be resolved with the municipality. Developers must also navigate the rights of a mall’s existing tenants, such as large department stores or other anchors.
“You probably have restrictions that would prohibit, let’s say, residential from your anchor tenants or the underlying documents that govern the mall,” Albrecht said. He added: “Normally, those things are prohibited because, at the time that these malls were developed, it was just a different animal, so people were not contemplating these different uses other than traditional retail with maybe some restaurants, a movie theater.”
With the complexity of such a project, he said, “you really need to have all the stakeholders aligned.”
But experts note that, while residents and public officials may balk at bringing apartments to their beloved shopping destinations, the projects can help towns satisfy their court-ordered affordable housing requirements. What’s more, the sites are well-equipped to handle large-scale developments, given their size and existing infrastructure.
“It is easier, in the sense that there is a lot of existing traffic in malls,” said David Minno, a principal of Minno & Wasko Architects and Planners. That bodes well for the site’s ability to handle new residents, while the parcels will also have existing sewer and water service and other utility connections.
“There’s a lot going for it in terms of ease of approvals,” Minno added. His firm is designing two midrise apartment buildings that will bring a combined 456 units to Bergen Town Center, which sits just south of Route 4 in Paramus and Maywood, working on behalf of Urban Edge Properties.
The developer, which received site plan approval in early May, aims to raze an existing retail and restaurant building on the east side of the property, allowing it to build a mix of mostly one- and two-bedroom homes around amenity courtyards. Minno noted that the project would also create a pedestrian path to the west side of the site, which contains the bulk of Bergen Town Center’s 1 million square feet of retail space, enhancing access and walkability for residents.
In its first-quarter earnings call last month, Urban Edge said it was mulling whether to sell the parcels to a multifamily developer or form a joint venture. It’s also weighing its options for other retail properties in its portfolio.
“I can tell you that the buyer pool is large and consists of some of the most reputable, multifamily developers in the region, because they all share our view that this site is one of the best residential development opportunities in Bergen County,” CEO Jeff Olson said, according to a transcript of the call, referring to Bergen Town Center. “In terms of other properties … there are many that we’re evaluating. It’s early stages, but as we look at places like Garfield and Woodbridge and Yonkers and Jersey City and Millburn, we think all have opportunities for residential, densification and other types of uses.”
Those uses often include health care. Urban Edge has received approvals to build an 80,000-square-foot medical office building at Bergen Town Center, having signed a lease with Hackensack Meridian Health. Kushner, for its part, has already added the asset class to Monmouth Square in Eatontown, under a long-term ground lease with Rendina Healthcare Real Estate. The latter recently completed an 80,000-square-foot building that is leased and operated by RWJBarnabas Health, while it’s now seeking approvals for a second project that would add some 30,000 square feet.
Health care is also central to PREIT’s plan to reposition Moorestown Mall on Route 38, where construction is underway on a new 165,000-square-foot ambulatory care center for Cooper University Health Care. The facility, which will occupy a former Sears store, is part of a plan that also calls for up to 1,065 multifamily units, including a 20 percent set-aside for affordable housing, and a new ground-up hotel.
“This works, as it brings new people to the shopping center daily, weekly (and) monthly and really embeds us into the community,” Joseph Coradino, PREIT’s chairman and CEO, wrote in an email to Real Estate NJ. He added that “health care is essential, and we have worked hard to create a mix of discretionary goods, essential goods and services and leisure and entertainment experiences so there is truly something for everyone.”
Coradino added that NRP Group has started construction on 375 apartments at the site, on a roughly four-acre outparcel that PREIT sold to the developer, noting that the project is “being built on unused land, creating value out of nothing while also promoting a more sustainable setting.”
In Eatontown, Whole Foods will occupy a building currently housing Barnes & Noble, which will ultimately move to another portion of Kushner’s Monmouth Square property. The developer expects to begin demolition in the fourth quarter to facilitate the move, Sommer said, in one of several steps to right-size the mall’s 1.5 million square feet of existing retail space. It plans to reduce the retail segment to around 900,000 square feet, largely by demolishing the shuttered Lord & Taylor and JCPenney stores at the site.
In the process, Kushner will convert the property to an open-air retail destination, as it originally was when the mall opened in 1960. It also plans to expand the site’s food and beverage options, add convenience retail and bolster existing entertainment offerings such as the AMC movie theater, which will remain, as it brings new uses to the site in the years to come.
Notably, those uses include a landscaped, walkable public space that figures to host farmer’s markets, live entertainment and other programming meant to draw retail customers and residents from both Eatontown and neighboring towns.
“We always imagined this property to revolutionize the way residents and visitors engage within their surroundings,” said Nicole Kushner Meyer, the firm’s president. “We envision doing that by combining retail, entertainment and community spaces to create an immersive destination.”
