Deal falls through on 83-acre parcel
Lea Kahn
The region’s booming housing market may have robbed the Delaware and Raritan Greenway of the opportunity to acquire the 83-acre S.T. Peterson and Co. parcel for open space preservation.
The nonprofit group had been eyeing the Peterson property for several years. The tract is bordered by Carter Road, Elm Ridge Road and the Stony Brook. It straddles the Hopewell Township – Lawrence Township border.
The deal fell through because the Delaware and Raritan Greenway was unable to close on the sale by Feb. 28, when the sales agreement expired. The nonprofit group had signed a sales agreement with S.T. Peterson and Co. officials in May 1999, which set the closing date for Feb. 28, 2000.
When it became clear that the Delaware and Raritan Greenway could not meet the Feb. 28 deadline, S.T. Peterson and Co. President John Volweider informed the group that the company was not going to extend the contract and that it had accepted more money for the land, said Linda Mead, the group’s executive director.
After the closing date, Mr. Volweider told the group that he had “handshake agreements” with three individual buyers to sell the 83-acre tract — which had been subdivided into three building lots in 1990 — for a total of $1.5 million to $1.7 million, Ms. Mead said. The Delaware and Raritan Greenway was prepared to pay up to $1.28 million for the land.
“It’s a booming real estate market. That, plus (the fact that) processing public funds doesn’t happen overnight, impeded our ability to close this deal (by the Feb. 28 deadline),” Ms. Mead said. Since January, real estate values have soared in the area, she added.
“The Delaware and Raritan Greenway has a reputation for closing deals. This is unusual for us. We have a great track record — that’s why it hurts so much,” she said. The group closed on five acquisitions in December and January — two each in Somerset and Hunterdon counties and one in Mercer County.
Mr. Volweider of S.T. Peterson and Co. said the company is selling the land to three individual buyers who plan to build houses, Ms. Mead said. She added that she does not know if those deals have been consummated.
Last spring, S.T. Peterson and Co. officials had agreed to sell the land to the group for $1,050,000 — even though the company felt the land was worth as much as $1.4 million, Ms. Mead said. The company was going to donate the difference between the $1,050,000 offer and the $1.4 million figure, she said.
The group worked diligently for nine months to raise $200,000 from donors and to meet the requirements for the state, county and municipal funding for the sale — much less than the one year that it usually takes, she said. The state offered a $500,000 grant, and Mercer County, Lawrence Township and Hopewell Township put up the rest of the money.
But before public money could be used for the purchase, the tract had to be appraised by two independent appraisers, she said. Other requirements included a survey, an environmental assessment to ensure the land was not contaminated and a land title search.
The Delaware and Raritan Greenway delivered the survey, the environmental assessment and title search to the state for its review in December. The two real estate appraisals also were delivered, but the state did not approve them until the end of February, she said.
The private donations were in hand by January, she said. Although Mercer County had committed its funding to the group, officials from the townships said they could not deliver the money until April. Hopewell Township had to adopt a bond ordinance to allocate the money, she said.
When the Delaware and Raritan Greenway learned that the company was preparing to sell the land to other buyers, it appealed to the state, she said. The state offered more money, but the agency could not pay more than $1.28 million — which is the value that the two appraisals placed on the land.
But the additional money did not change the circumstances, Ms. Mead said, adding that discussions with S.T. Peterson and Co. continued through March. Mr. Volweider, the company president, told the group that the company was in business to make money, and that there were higher offers for the land, she said.
“The bottom line to the community is, the land is a valuable resource that helps to create an identity. It offers recreational opportunities, particularly in an area where we have diminishing open space. But to an investor, land is a commodity,” Ms. Mead said.
“It is a sad story, in our case. We worked hard to close the deal. We will continue to do what we can to preserve some of the land. Our goal was to preserve the whole thing — to keep the view open, plus preserve the land along Stony Brook. The most important part is to preserve the land along the brook,” she said.
The Delaware and Raritan Greenway told S.T. Peterson and Co. officials to let the buyers know that the group is still interested in preserving the land, she said. The group is willing to work with the new owners, she added.
There is a lesson to be learned from this experience, Ms. Mead said. It is important to expedite the process in every way possible, she said, adding she believes the group did everything it could to make the deal work.