The proposed apartment building included in the Monmouth Mall redevelopment project is predicted to attract millennial-aged residents to apartments that may rent for $3,000 per month.
That was the assessment offered by Jeffrey Otteau, president of the Otteau Group, who testified on behalf of the Kushner Companies and Rouse Properties at the June 18 meeting of the Eatontown Planning Board.
According to the Otteau Group’s website, “The lightning strike speed of today’s information flow has accelerated the pace of change for real estate markets. As a result, trends that previously took years to develop can now unfold in a few short months. Our mission is to assist our clients in keeping pace with that change by providing insightful analysis and cutting edge pricing skills.”
The June 18 meeting in Eatontown was the fifth hearing regarding the mall’s proposed redevelopment. No decision regarding the application that was filed by Eatontown Monmouth Mall LLC was reached that night. A sixth hearing on the application has been scheduled for July 2, when the next meeting is scheduled.
Eatontown Monmouth Mall, a joint effort between Kushner Companies and Rouse Properties, is seeking municipal approval to remodel, renovate and repurpose the Monmouth Mall for commercial and retail use, according to the Planning Board.
The proposed apartments on the premises, to be called the Heights of Monmouth, are permitted in the southeast corner of the premises by municipal zoning. The Heights of Monmouth has been described by the applicant as a multi-use building designed to accommodate 340 one-bedroom, 340 two-bedroom and 18 three-bedroom apartments.
During testimony on June 18, Otteau said the proposed apartments are expected to attract millennials between the ages of 22 and 36 who make a salary above $93,000.
Otteau said the average rent of a one-bedroom apartment at the Heights of Monmouth would be about $2,300 per month, necessitating an annual income of about $80,000. He said the average rent of a two-bedroom apartment would be about $3,100, necessitating an annual income of about $100,000.
“These are high-wealth households,” Otteau said. “These people have nothing to do with their lives but go out and spend money. They don’t have a lawn to cut. They don’t have gutters to clean … These people are going to go out and support your tax base by spending in retail stores.”
Otteau said 25 percent of the country’s malls will be closed in the next three years. He said the Monmouth Mall is worth reviving. If there is no action taken at the retail facility, Otteau said, the mall will close its doors for good in the coming years.
Otteau, who has been engaged in real estate consultation and valuation since 1974, said the viability of the country’s shopping malls are threatened. He said consumers who choose to shop online and from discount stores like Marshalls, HomeGoods and T.J.Maxx directly relates to the dwindling number of individuals who make purchases at malls.
Otteau said people in the millennial age range will gravitate toward the apartment building. The units, he said, require less commitment than owning a home. He said an apartment is an enticing alternative for a generation that does not want to commit to residing in one area for a long period of time or keep up with household chores a single-family residence requires.
“We need to determine if repositioning the mall’s retail space, coupled with constructing 700 apartments is a viable and sustainable use to fill a need in the community,” Otteau said.
Otteau said the Monmouth Mall, which is located at the intersection of Route 35 and Route 36, would benefit from the development of the Heights of Monmouth. He said the “high-wealth households” who would be expected to occupy the apartments are going to be directly responsible for the mall’s survival in “the age of Amazon.”
Otteau said young adults and “high-income baby boomers” (people born between 1946 and 1964) are the desired tenants for the proposed Heights of Monmouth. He said those two target demographics – affluent individuals – will have disposable income to spend.
Members of the public were permitted to speak after Otteau presented his testimony.
“Mr. Kushner and his associates have made a big mistake to buy this (investment),” one resident said in response to Otteau’s statement that young adults will save the mall by making retail purchases with their disposable income.
“If you can rent a two-bedroom house on a quarter-acre of land … why would someone spend $2,700 to live by a mall (in an apartment)?” Ted Lewis said.
Attorney Edward Liston, who represents four residents who are objecting to the proposed site plan, called professional planner Andrew Thomas to provide testimony. Thomas said the proposed apartment building does not comply with Eatontown’s zoning ordinance.
Thomas said the zoning ordinance does not permit “residential amenities” on the first floor.
The developer is proposing parking for residents and a mailroom on the first floor. Thomas said those are “residential amenities.”
The first floor of the Heights of Monmouth is also proposed to include a yoga studio, an outdoor swimming pool and a fitness center, and retail spaces, Thomas said.
“This application should have been brought before the Zoning Board of Adjustment,” Thomas said.
Attorney Patrick McNamara, who represents the applicant, said the proposed development plan complies with Eatontown’s zoning ordinance.
McNamara said Christine Cofone, a professional planner, is scheduled to provide testimony at a future meeting. He said that as the hearing proceeds, he may need to recall witnesses who previously testified in order to address issues that have been raised by residents during the previous hearings on the application.