Monarch sales sign was recently blown over by strong winds.
Notwithstanding Plainfield City Council President Burney's recent announcement that the proposed tax abatement for the Monarch condos is off the table, that does not mean the project may not be in desperate straits.
And, as the old saying goes, extremis malis extrema remedia, or 'desperate times call for desperate measures'.
My curiosity was piqued when city administrator Marc Dashield wrote in answer to a query by Councilor Adrian Mapp (see here) that sales of condo units was 'approximately 13-15 units'.
What's to be 'approximate' about? Either they are sold or they are not, right?
It's not quite that easy.
Actually, there are NO COMPLETED SALES YET, only contracts to buy units.
And, considering that some offers to buy were made as long as SEVEN MONTHS AGO, it is hardly any wonder that some prospective buyers are canceling their contracts so they can get on with their lives.
Faced with potential cancellations, rumors in the real estate community are that those with contracts are being offered 'use and occupancy' (U&O) agreements by P&F/Dornoch in lieu of closed sales. In residential real estate, U&O agreements are sometimes used when a buyer is unable -- but on the verge of being able -- to complete a sales transaction.
Essentially, the buyers are granted 'use and occupancy' of the premises for a stated length of time for a stated amount of money, at the end of which the deal is expected to close.
(The twist here is that it is P&F/Dornoch which is unable to complete the sales transaction -- not enough units are sold, and there is no Certificate of Compliance.)
You can be forgiven for thinking it sounds like RENTING, which is not part of the Developer's Agreement.
Does it happen anyway? Youbetcha. In Rahway, the developer of the Sky View at Carriage Plaza condos simply started renting units in disregard of the development agreement which prohibited same (see here).
But the Monarch situation is complicated not only by the fact that the agreement does not allow rentals, but also that there is NO Certificate of Compliance, which would allow legal occupancy of any units.
Is P&F/Dornoch trying to make an end run around its Developer's Agreement with the UCIA?
Could be.
But in any event, the City is likely to be the last to find out.
- Plainfield Today: "Monarch condos: More wrinkles than Dorian Gray"
- Mapping It Out: "Answers to tax abatement questions"
- Rahway Rising: "101 units accounted for at Sky View"
-- Dan Damon
Posts
4 comments:
Not to add salt to the would, but rather than continuing to waste time and money with slow to no sales, just let the developer rent them as a luxury, market rate, non affordable housing rental. The city will still get the taxes from the developer and people will actually have a brand new place to call home. It is a win win for everyone. When the market turns around, they can sell them then. Possibly for more money too. I've seen the units. They are not perfect, but they are very nice.
I agree, for the right price, they will rent like hot cakes .... for the right price. [The old supply versus demand kicks in everytime .. there is a demand for nice economical places and hey, Cory Booker RENTS so it can't be that bad for a City to have good renters.
Dan,
How accurate is that number "13-15"? I heard they have about 20. Any truth to this?
I would believe if the units are rented (which will more than likely be the case) and then turned into condo's at a later date . . . seems unlikely.
Why?
Because renters aren't going to care for their apartments like an investment property.
However, at a later date it could possibly become a Cooperative development.
And I will add . . . ANYONE who closes on any of the Monarch units without checking the real estate market and inquiring on how many other units have sold . . . is gonna be SORRRRRRRRY!!!
Post a Comment