to launch project
Sandy Hook Partners says it will seek $20M
to launch project
BY GLORIA STRAVELLI
Staff Writer
A private developer held a public meeting recently to counter criticism and win public support for a controversial plan to rehabilitate historic buildings at Sandy Hook and lease them out for profit.
James Wassel, head of Sandy Hook Partners LLC, the National Park Service’s choice to lease and rehabilitate 36 buildings at Fort Hancock, told the approximately 50 people who attended his Dec. 13 presentation at the Post Theater on Fort Hancock that the meeting was an attempt to counter "an aggressive misinformation program" that has shaped public opinion of the development.
In setting the record straight, however, Wassel offered little new information beyond what has been disseminated during the two years since Sandy Hook Partners was selected by the National Park Service to rehabilitate and adaptively reuse 36 deteriorating historic buildings at Fort Hancock.
Four years after submitting a proposal to the park service, and two years after signing a letter of intent with the agency for a 60-year historic lease, Wassel failed to cite firm commitments from lessees or investors willing to back the $75 million Fort at Sandy Hook.
The delay in the signing of a formal lease by the developer and the park service has been attributed largely to an extended public comment period made necessary by opposition to the project.
The project is being represented by the park service as a national model of private/public partnerships that can preserve natural and cultural resources the government has failed to fund.
Those against the project oppose commercial development and privatization on Sandy Hook and are concerned that the project will have adverse environmental impacts on the Hook. Supporters of the plan, largely historic preservationists, argue it is the only way to save Fort Hancock’s historic buildings.
In an interview following the meeting, Wassel said he expects to sign letters of intent within the next 60 days with five tenants and projects that financing will be secured within 4-5 months and construction begun by summer.
He said the agreement with the park service gives the developer five years to complete the project, which will be carried out in three phases. Following the meeting, Wassel said Sandy Hook Partners needs to raise just $20 million in financing for the first phase, which will involve 8-12 buildings.
According to Wassel, the developer expects to put $50-53 million into rehabilitating the buildings, $15-$17 million into infrastructure and expects to gain $10-10.6 million in historic tax credits.
The tax credits are a major incentive to investors, Wassel told the meeting, and require a minimum lease term of 39 years, and are necessary for the project
Wassel said he will begin a "road show" to seek financing by mid-January. In an interview after the meeting, he said the park service required Sandy Hook Partners to demonstrate it was qualified to secure financing, not proof of commitments for financing the project as as critics have charged.
He acknowledged that a government investigation into charges of irregularities in the procurement process that led to Sandy Hook Partners being selected hampered the developer’s ability to secure financing.
"When you’re being investigated, you can’t go out and ask for financing from institutional investors," he said in response to a query. "It’s been difficult for us."
He said he was unaware of another, pending investigation, into charges that he had a prior relationship with a park service official who influenced the outcome of the selection process .
Wassel told the meeting that the configuration of the proposal has shifted.
"This is a process and it grows and moves with every conversation. There is much more educational use," he explained. "We proposed 25 percent and it’s going to be well over 50 percent."
According to the Rumson resident, the development would affect only a small portion of the 1,665-acre peninsula and would involve only 36 of the Fort Hancock’s 110 buildings and would not impinge on natural areas, bird breeding and nesting grounds or beaches on the Hook.
In fact, he said, revenues the developer will pay to the park service "will at least double, if not triple, the park’s operating budget" and improve the agency’s ability to preserve natural and cultural resources at the park.
He said the project will add 1,000 people per day to the population on Sandy Hook.
Wassel answered criticism that the project will have a negative impact on traffic on surrounding roadways by citing ferry service options and plans to replace the Route 36 drawbridge with a fixed span.
The development will build on "indigenous" uses that already exist on Sandy Hook, he explained, and encompasses six sectors: marine/environmental research and education; technological innovation and integration; corporate learning and training and education; fitness, health, wellness; cultural arts and heritage; hospitality.
Included in the models were proposed uses as: a military museum, hyperbaric medicine and oceanic research laboratories, hospitality industry training, trading floor training facility as well as a continuing education program for attorneys.
Hospitality uses, he said, are based on the needs of existing organizations already on Sandy Hook for meeting food service and lodging space for visitors.
Wassel repeatedly cited interest on the part of institutions of higher learning including Rutgers and Brookdale Community College, which already have a presence on Fort Hancock, as well as pharmaceutical companies and an office furnishings manufacturer.
The development concept, he said, aims to include tenants who can develop profitable applications for the research produced at Sandy Hook.
"We have many conversations going on right now," he told the meeting, "with people who want to take the research and package it and develop financial models."
He announced recent changes in the Sandy Hook Partners’ team. New to the developer are Joseph Scofi, Fair Haven, who will serve as project manager, and Terence White, who will be in charge of technology.
Noreen Bodman, executive director of the Jersey Shore Partnership and Wassel’s former Rouse Co. colleague Phil Duffy remain.
Robert Kellner continues as project architect. Kellner said Saturday he has moved his practice from downtown Manhattan to Sandy Hook where Sandy Hook Partners occupies Building 26.
While Wassel told the meeting a group is interested in locating a military museum in the former Officer’s Club building, Kellner said in an interview that the building is badly deteriorated and an assessment will be made to determine if it can be saved when that phase of the project is being planned.
Answering criticism of the developer’s rent-free status at Fort Hancock, Wassel said that Sandy Hook Partners agreed to renovate the building it occupies in lieu of rent and has spent $250,000 on the former park service headquarters building.