New York Times archived article from July 18, 1999. (Emphasis added to flood and trichloroethylene-related sections).
AFTER two years of legal wrangling, the fate of 78 vacant acres along Route 22 in Watchung where the Lockheed Electronics complex once stood has been decided.
Later this month, work is expected to start on filling the site and 12 adjacent acres with a 750,000-square-foot shopping center, the largest commercial development in the Somerset County borough in nearly four decades.
In June, the New Jersey Supreme Court decided not to hear the case against the planned $90-million center, known as Watchung Square.
The decision ended the lawsuit filed by neighboring North Plainfield and two residents — one from Watchung, the other from North Plainfield — and cleared the way for the project to proceed.
Watchung Square will be a ”power center,” which the International Council of Shopping Centers in Manhattan defines as an open-air retail strip with 250,000 square feet of space or more and three or more large specialty stores.
The project, which is nearly fully leased, will have 17 stores, including a 125,000-square-foot Target department store, a 124,000-square-foot Home Depot, a 66,000-square-foot supermarket and a 10,000-square-foot Model’s sporting goods store. There will also be a 16-screen Regal movie complex, said Sal A. Davino, who is managing partner of Watchung Square L.L.C., the entity created to develop the project.
Mr. Davino, a longtime shopping center developer who also heads Fidelity Land Development of Chatham, said Watchung Square would be completed in 18 months, nearly seven years after he got involved with the project.
The start of a center this size indicates the faith of the developer in the strength of the retail market in the state in general and in Somerset County in particular. But the time it took to get the project to this point also shows that the development climate is becoming more complex as the supply of land to develop dwindles and community concerns rise.
Those concerns range from providing adequate drainage and controlling traffic to preserving the quality of life of residents in the community as well as in neighboring communities — all of which were issues in the Watchung project.
Mr. Davino said he had stayed the course through the litigation as well as a two-and-a-half-year approval process because of the site’s location, on a major retail corridor in a county with strong demographics. Some 213,500 people with an average household income of $68,927 live within a five-mile radius of the center, he said.
”Sure, there is a lot of retail along the corridor,” Mr. Davino said. But in between the cluster of stores in Union Township and the enclosed Bridgewater Commons Mall in Bridgewater ”there are no power centers,” he said.
ACCORDING to the International Council of Shopping Centers, power centers and retail shopping strips are the dominant form of retail being constructed today. Such centers continue to grow nationally, albeit not has rapidly as they had in past, with 54 power centers built in 1998, compared with 81 built in 1997. Last year, however, only 11 enclosed regional malls were built, according to data from the council and the National Research Bureau, a publisher of shopping-center data based in Chicago.
Mr. Davino contracted to buy the 78-acre site in 1994 from Lockheed Electronics, a subsidiary of what is now Lockheed Martin, which closed its old complex four years earlier and worked with Watchung officials to have the site rezoned from industrial to highway commercial use, including retail. After that, Lockheed razed the complex and cleaned the site, which contained levels of trichloroethylene, a cleaning solvent, to accommodate the shopping center.
Designed by Patrick Marchetta of Lynhurst, the center will comprise six low-rise buildings scattered at the edges of the sloping site, with parking for 3,300 cars in front of the stores and at the site’s core.
It was approved by the borough’s planning board in 1997.
Anthony F. Addario, the Mayor of Watchung, said he supported the project because ”its retail use fits like a glove” on the borough’s half-mile stretch of Route 22, where stores predominate. He said it would generate ”tax revenue that will exceed the municipal services required to accommodate the shopping center.” Estimates are that it will generate $1 million in new tax revenue a year, helping ”to keep a lid on property taxes,” he added.
Some residents of Watchung opposed the center, as did residents and local officials in North Plainfield, who were concerned that so large a project would substantially increase traffic and create water runoff problems. Others also wanted the project scaled back and the movie theaters excluded.
While conceding that there would be more traffic, Mayor Addario noted that the developer, to gain his approvals, agreed to environmental, design and traffic concessions. They range from carving out two retention basins so that the runoff would be less than it would be if the property were left undeveloped to making $5 million in off-site road improvements, among them the widening of a stretch of Route 22 to six lanes from four.
Mr. Davino said he had also acquired the 12 additional acres from Lockheed to relocate the movie theater to the southwest corner of the site, farther away from residences. He added that six acres in the northwest corner of the site, where the movie theater had originally been situated, has been donated to the borough.
The concessions did not satisfy all objectors and after the project was granted its approvals North Plainfield and the two residents sued. They contended that, among other things, Watchung had acted in an arbitrary manner in granting the approvals.
Janice Allen, the Mayor of North Plainfield, said the key issues for her community were traffic and drainage problems. The latter is of particular concern since North Plainfield lies in a flood zone, she said. ”We pursued any and all legal means,” she added, arguing that North Plainfield would be hurt by the project, but receive none of the benefits it will generate. Now, she said, her concerns are focused on the issue of groundwater contamination.
THOUGH the soil on the Lockheed site has been cleaned, contaminants have filtered into the groundwater below and are migrating off site, affecting the groundwater in North Plainfield. But Mr. Davino said — and the state’s Department of Environmental Protection confirmed — that Lockheed is putting in more monitoring wells to identify the source of the contamination, and once located, has agreed to install a pump and treatment station.
”Regardless of the process the developer can move ahead with developing the site,” said Loretta O’Donnell, a department spokeswoman.
Mr. Davino said that the years of negotiation and litigation had added to the cost of the project, which increased from $75 million to $90 million. The cost included the acquisition of the additional land. He said he would close on both parcels this month. It also required the ‘’shifting around of some of the financing” to build the project, which he said is coming from his own equity and bank loans.
But with construction soon to start, Mr. Davino sees a silver lining. ”The retail market is that much stronger,” he said, noting that the majority of his tenants remained with the project.
The retail vacancy rate along the 21-mile Route 22 corridor from Union to Somerville is 5.2 percent, down from 7.3 percent a year ago, according to Brunelli & Company, a retail brokerage in Old Bridge. Rents range from $12 to $25 a square foot. ”The demand is for power centers,” said Richard J. Brunelli, the firm’s president, ”and it is coming from big-box retailers, which continue to drive the market.”
He said that in addition to Watchung Square, three other power centers — two in Bridgewater, one in Somerville, together totaling nearly 2 million square feet — are under way or planned in Somerset County. While the county’s population is growing and new retailers, including Best Buys, an electronics chain based in Eden Prairie, Minn., continue to enter the New Jersey market, the last center built will have trouble leasing, he said.
Meanwhile, Mr. Davino said the sign on the Watchung site that for the last five years has announced the arrival of the retail center will finally be coming down. Instead, he said, ”There will be buildings going up on the site.”
