Shackamaxon Plan May Add Condos

The eventual owners of will be permitted to build up to 60 age-restricted luxury condos on a 12-acre parcel at the center of the property, according to a preliminary settlement reached by Shackamaxon, New Jersey Golf Group, the Township of Scotch Plains and the Scotch Plains Planning Board.

In exchange for the deal, the club's owner – almost assuredly New Jersey Golf – must pay the township $475,000 for the deal on the club, which reportedly owes millions of dollars to Valley National Bank.

Township officials say the deal for the property would amend a rehabilitation plan for the property, which includes a storied 100-year-old course, designed by famed golf architect A.W. Tillinghast. The Township Council and the Planning Board must approve the measure, codified in a “Plan Amendment Ordinance,” that will be introduced at a special Township Council business meeting at 8:30 p.m. Tuesday in the Municipal Building courtroom.

In December, Shackamaxon, a member-owned club sinking deeper into debt from years of declining memberships and rising costs, finally went on the market. The 146-acre property, the single largest parcel of land in Scotch Plains, is zoned as R-1, which would have allowed a developer to purchase the property and build as many as 96 single-family homes on one-acre lots without obtaining variances.

That kind of large development, Mayor Nancy Malool has argued, would flood Scotch Plains-Fanwood public schools with hundreds of students and strain local services and infrastructure. “The impact on the town would have been devastating,” she said in a telephone interview Wednesday.

Consequently, on March 1, Malool and the Township Council, by a vote of 3-2, declared Shackamaxon and three township properties – the Municipal Building, the and the public works yard – “areas in need of rehabilitation,” a designation that allows the governing body to limit the types of development that occur there. The restrictions were laid out in a three-phase rehabilitation plan developed by Maser Consulting, of Red Bank, and adopted May 3:

• Under Phase One, everything stays the same. The golf course remains a golf course as currently configured.
• If Shackamaxon cannot generate a profit, the rehabilitation plan would enter Phase Two. The owners of the country club would be allowed to construct 24,000 square feet of public meeting rooms.
• If, with those developments, the owners of Shackamaxon still cannot make the club viable, the plan would enter its third stage, the most controversial portion of the plan. Under what Malool called a “land-swap agreement,” Scotch Plains would give a developer the current locations of the Municipal Building, public library and public works yard. The developer, in turn, would be charged with turning those properties into retail space that would, ideally, revitalize the township’s downtown district and make a healthy return on the developer’s investment. In return, the developer would also construct a new municipal building, library and public works yard at Shackamaxon, the grounds of the golf course would be converted into a public park, and the developer would additionally be charged with renovating Scotch Plains' two firehouses, which would remain at their current locations.

Councilmen Kevin Glover and Mickey Marcus, the council’s two Democrats, have roundly criticized the plan and rehabilitation designation. “I do not understand at all why we tied the downtown revitalization efforts to what might or might not occur at Shackamaxon,” Marcus said at the May 3 meeting. “The plan that has been proposed, in my view, encompasses a development of Shackamaxon, which is what I thought we were trying to prevent.” He added that he was not convinced a developer would agree to the proposed land-swap.

Glover, in an interview Friday, raised myriad concerns. He argued that instead of declaring the property an area in need of rehabilitation, the mayor and council should have instead sought to establish a sunset clause, one that would have penalized New Jersey Golf if it abandoned Shackamaxon before a period of 10 years. Under the rehabilitation designation, he contended, there is little stopping the golf-management company from making money on the proposed condos then walking away.

"There's no guarantee to that deal," he said. 

He pointed out that the name of the buyer changed to New Jersey Golf Group from RDC Golf Group, a Monroe Township-based golf management company that, according to its website, owns Forsgate Country Club in Monroe and Tuscawilla Country Club in Winter Springs, Fla., as well as the Van Saun Tennis Center in Paramus. The two companies' principals, however, are the same. 

"That raised the hairs on my neck," he said. "When I see a separation of a parent company from a subsidiary or a limited liability corporation – I've seen people do that so they can sever it without it hurting the parent company."

Glover also asserted that the rehabilitation designation inherently devalued the homes around Shackamaxon. "When they sell their properties, it will be disclosed that they're in a rehabilitation zone," he stated "There are people who will never buy a house in a flood zone. The community as a whole has a stigma."

In June, Shackamaxon and New Jersey Golf filed lawsuits against the township and the Planning Board (on Feb. 21, the Planning Board unanimously recommended that the township approve the rehabilitation designation). The suits alleged that the rehabilitation designation and plan were improper on essentially two grounds.

First, under New Jersey law, an area can be declared in need of rehabilitation only if more than half the households, or a majority of the water and sewer infrastructure, are more than 50 years old, according to Township Attorney Jeffrey Lehrer. Scotch Plains, in making its rehabilitation declaration, claimed that this was the case in and around Shackamaxon. Shackamaxon and New Jersey Golf, by contrast, contended that the country club did not meet this criteria.

In addition, the lawsuits asserted that the town had illegally reduced the value of the Shackamaxon property with its rehabilitation designation, which unduly restricts development.

“It changed what could be built,” said Scotch Plains resident Bernard Katz, an accountant and longtime Shackamaxon member, who stated he has been serving as the club’s interim financial advisor since October. “By definition, it’s changed the zoning and changed the value of the property. That is compensable in the State of New Jersey.”

Lehrer disagreed. "They did not come up with one study that said we devalued their property," he said. "You can claim all you want, but unless you have an empirical expert report that says the property's been devalued because of what we did, I don't buy it."

Prior to the rehabilitation designation, New Jersey Golf – then using the name RDC Golf Group – had, in fact, agreed to purchase Shackamaxon, according to Katz, Lehrer, Glover and Malool. The company intended to continue operating the club as a golf course, but also planned to build townhouses. Upon being informed by the township that Shackamaxon’s R-1 zoning prohibited townhouses and, furthermore, the proposed rehabilitation plan would further restrict them from being built, the company withdrew from the deal.

New Jersey Golf and RDC Golf Group did not return calls. Lawyers at Gibbons P.C. of Newark, representing the company in its lawsuits against Scotch Plains, declined to comment, stating that firm policy prohibited them from discussing pending litigation.

According to Katz, “They felt its ability to build was being compromised.” He declined to state how much the company had offered to pay for the club, citing privacy concerns, but stated that it was “more millions than they are currently paying.”

The proposed settlement of the two lawsuits, however, comes close to RDC Golf Group and New Jersey Golf’s original plan. It replaces Phase Two of the rehabilitation plan wholesale, swapping out the envisioned public meeting rooms for the 60 proposed condos, which would be restricted to tenants ages 55 and older. The condos would be built where Shackamaxon’s pool and tennis courts are currently located, which Lehrer said are “non-productive to the golf course.”

The agreement also stipulates:

• That, to build the condos, the property owner would have to enter into an agreement with the Township Council that would describe the phasing of development, how the property would be laid out, the timing of the project and similar details. The site plan would need to be approved by the Planning Board.
• That the condos must have direct access onto Lamberts Mill Road. Shackamaxon is currently accessible only by navigating residential backstreets. 
• That the property be perpetually “deed-restricted” as a golf course; for Shackamaxon to be converted to anything other than a golf course, the mayor and council must lift the deed restriction.
• That the purchasers of Shackamaxon’s debt, almost certainly New Jersey Golf, pay Scotch Plains $475,000: $275,000 for the township’s Affordable Housing Trust Fund; $100,000 for the township’s Business Improvement District (BID); and $100,000 that the township would divide between the BID and the Affordable Housing Trust Fund. According to Malool, the BID funds could be used for no-interest loans for business owners to improve their stores’ facades or to organize a business-recruitment event. Katz, however, described it as “another way for the township to extract ransom or bribery to get the deal done.”

The money would help the township recoup the costs of the rehabilitation plan and lawsuits. The plan ultimately cost about $22,000 to develop, Malool stated. She said she did not have the figure for Lehrer’s legal fees because she has not yet received this month’s bills.

She pointed out, however, that by declaring the property in need of rehabilitation, the township could ultimately enjoy a tax windfall – assuming, of course, that the settlement is approved, New Jersey Golf buys the course, and the new version of Phase Two goes into effect. Any residences built at Shackamaxon, by being in a rehabilitation zone, will be eligible for payments-in-lieu-of-taxes, or PILOT.

As Malool explained: “Say a condo normally pays $15,000 in taxes. They would get a break of $1,000 to $2,000. The township keeps 95 percent of the taxes, the county gets only 5 percent, and the schools get none, for five years. But the schools wouldn’t be impacted because the condos are age-restricted.”

Malool said she was “pretty optimistic” that the settlement secures Shackamaxon’s future as a country club. “I think they would’ve been viable just as a golf course,” she stated. “But I think these condos give them a cushion.”

Katz agreed. The condos have “nothing to do with the viability of Shackamaxon. It’s just an added return for the purchaser of the property. It has to do with the investor’s ability to attract members. If he can do that, the condos are just gravy.” An impending overhaul of the club’s membership structure, for example, which would allow members to pay for a basic membership then buy amenities a la carte, could attract enough new members to make the club profitable, Katz said.

Glover, however, was skeptical. "Golf courses are closing all over," he said. "That it will always be a golf course, it's an empty promise. It's a promise that we as a governing body cannot give." 

The Phase Three contingency plan does remain in place. If Shackamaxon fails to make money, the owner would have six months to find a buyer who would maintain the property as a golf course before the proposed land-swap would go into effect. Malool emphasized, however, that that prospect remains a long way off.

The settlement “accomplishes what most of our residents were looking for, and that’s to keep Shackamaxon a golf course,” she said. “As long as somebody is able to keep it running as a golf course, then it will stay a golf course. If we need to give them 60 age-restricted condos to get that done, then we can do that.”