New Jersey officials are working on redeveloping an Army base in Monmouth County to revamp the site for civilian use and transform it into a center of economic activity in the region.
The Army is set to leave Fort Monmouth on Sept. 15, 2011. The 1,100-acre fort is surrounded by the boroughs of Tinton Falls, Eatontown, and Oceanport.
Closing the base will mean the loss of 5,000 jobs and raises the challenge of transforming the area into a mixed-use development.
The Legislature last month passed a bill that, if enacted by Gov. Chris Christie, would create the Fort Monmouth Economic Revitalization Authority and do away with the Fort Monmouth Economic Revitalization Planning Authority, which has crafted a master redevelopment plan for the fort.
Lawmakers formed the new authority to oversee the transfer of the fort and to establish a working agreement with the New Jersey Economic Development Authority.
The new authority will have its own board and its staff will be EDA employees whose sole responsibility is to work on redeveloping Fort Monmouth.
The 13-member board will be comprised of nine voting members. Three will be gubernatorial appointees. The others will be EDA’s chairperson, a Monmouth County freeholder, each mayor of the three affected boroughs, and another member of the executive branch.
The four non-voting members will be the commissioners of the departments of Labor and Workforce Development, Environmental Protection, Community Affairs, and Transportation.
The transformation of the fort will require improvements to water and sewer systems and electrical utilities. Infrastructure upgrades will address roads, sidewalks, and public transit, and other major capital improvements.
Any potential debt issuance to help finance those projects would be done through the EDA, and not FMERA, since it does not have the authority to issue debt.
“The concept is that EDA would provide any long-term debt capital, tax-exempt or not, and provide that capital through a conduit basis to the redevelopment authority,” said Tim Lizura, senior vice president for business development at the EDA.
Officials will utilize future revenue that the fort could generate to help finance development costs. The legislation allows FMERA to establish three different types of districts — special improvement, transportation planning, and infrastructure — in order to levy fees in those designated areas.
FMERA can create an infrastructure district and impose a franchise assessment on retail items sold in that district. If a franchise fee is enforced, the state’s sales tax on such items will be reduced by no more than 50%. New Jersey’s Office of Legislative Services estimates the loss of sales tax revenue to the state at nearly $9 million per year.
It is possible for the franchise fees to be used as security for a bond issue.
The fees can be used to repay loans and grants, or pay debt service for financing construction as well as development of parking or transportation facilities.
In any special improvement districts, Tinton Falls, Eatontown, and Oceanport could impose a special assessment on non-residential property to promote the economic and general welfare of the project area.
In a transportation planning district, FMERA may impose fees on developments in the designated area to help support transportation infrastructure.
The legislation does not specify that special improvement district fees and transportation fees may be used to pay down debt service, though the revenues would go towards infrastructure costs.
“I think everything is up for discussion,” Lizura said. “Those are revenues that are going to be received down the road really as development happens. So we’ll have to look and see what our capital requirements are at that time. But the thought was that those are new revenues that the entity can capture to advance and accelerate the redevelopment process. Who knows if they get assigned and pledged [to a bond issue] or if they get paid as received, but the intention is that they get reinvested back in the site.”
Along with addressing infrastructure needs, the redevelopment involves retaining and creating new jobs in the area, as the Army currently employs about 5,000 people at the fort. The base provides administrative and logistical support for the Army’s communications division, and much of the Army’s research and development of high-tech systems is done at the fort.
Caren Franzini, the EDA’s chief executive officer, said FMERA and the EDA will be working with the state’s Department of Labor and Workforce Development and businesses in the region to place those who lose their jobs.
New Jersey’s unemployment rate was 9.7% as of May, according to the U.S. Department of Labor.
“I think one of the reasons why we we’re asked in the bill to be involved in this is because our whole existence for 35 years, the reason the EDA was created, was to help retain and create jobs in the state of New Jersey,” Franzini said.
State officials are currently negotiating with the Army regarding the actual transfer of the land. Typically, when the military leaves a base, it gives the land to the affected municipalities for as little as $1. While the Army several years ago said it would seek fair-market value for the land, that stipulation may change.
“That will be part of the negotiations,” Franzini said. “That’s the major issue.”
Once the FMERA board is up and running, it will work on a business plan that will quantify infrastructure needs, property values, economic impact on the affected municipalities and the state, and unemployment estimates, among other issues. That business plan will serve as a tool in FMERA and EDA’s discussions with the Army.
“It really is showing the federal government what the costs will be to the state of New Jersey by having the base leave and to totally redevelop it,” Franzini said.
FMERA will also take a fresh look at the existing master redevelopment plan that was created in August 2008, just before Lehman Brothers’ bankruptcy filing on Sept. 15, 2008, and the subsequent swift downturn in the U.S. economy.
“That’s going to be one of the initial things that the board’s going to work with and look at,” Franzini said. “The plan was a plan submitted to the federal government and the economy has changed since then. It will change again. … Plans need to be looked at and revised.”
The master plan envisions commercial and retail development, including offices, hotels, residences, and community centers. It also calls for preservation of wetlands and open space for parks and recreation, and a golf course. In addition, officials are looking to continue the area’s presence as a research and development and technology site.
According to the Office of Legislative Services, the EDA reports that an expected two million square feet of office space built or renovated over 20 years would provide approximately 4,900 jobs and generate $24.7 million in annual wage taxes for the state. The site could also generate more than $18 million in yearly sales tax receipts and 1,900 jobs from 760,000 square feet of new or revamped retail and hospitality space.
The three municipalities would also benefit from 330 acres of land that they would add to their property tax bases. Residential development could generate more than two million square feet of housing to be constructed or renovated.
Some of the redevelopment will be upgrading existing buildings and structures while other projects will involve demolition and rebuilding, according to Frank Cosentino, executive director of the Fort Monmouth Economic Revitalization Planning Authority. Cosentino and the EDA said they are discussing his potential role at the new authority.
“The fort has all the things that any community would have, but some of this has been in there for 92 years,” Cosentino said. “So what’s the condition of these infrastructure elements, and what’s it going to take to bring them up to standards or put them in alignment with the plan, which is different in many ways with what’s there now.”
Cosentino said incorporating public transit into the plan is vital.
“I happen to think that one of the most significant infrastructure requirements is public transportation, including rail and bus,” he said. “We’re not redeveloping 1,100 acres to further the area’s traffic problems.”
