MIDDLE TOWNSHIP – A plan to build a 340-home residential community off Indian Trail Road that is expected to net the township more than $9.7 million advanced Nov. 18 when the Township Committee introduced two ordinances needed for the project.
The first ordinance allows the township to acquire property in the redevelopment area by purchase or eminent domain. The second authorizes an agreement of sale of the property to Ryan Homes, the project developer, in a two-step closing process that will earn the township $8.5 million along with an additional $1.2 million for other land sold separately to another party.
The stretch of vacant land has been a focus of the township’s development plans since 2018. James Maley, the township’s special counsel for redevelopment efforts, explained that the deal is complex and not the normal structure for developer agreements. Part of the complexity arises from the unusual ownership structure of the properties.
The largely vacant land in the Burleigh section of the township was designated a redevelopment area in May 2018. The right of the township to achieve acquisition via eminent domain was added in 2022.
The township entered into a partnership in 2023 with Atlantic-Cape Builders, the estate of Thomas Tower and Debra Tower for purposes of consolidating ownership of lots within the large site and to share costs and profits associated with redevelopment of the land.
Complications arose from a 1996 attempt to build a residential development on the land. Two partners to that effort decided to allocate lots to each other in non-sequential order, creating a checkerboard ownership pattern.
Neither partner could do anything without the other. One of these partners was developer Thomas Tower. The other partner defaulted, and 128 lots in the overall acreage became the property of the township.
Further complication arose from the need to acquire a number of small lots that could not be developed and which were handed out to their owners as rewards for newspaper subscriptions. The “newspaper lots,” often long forgotten by the families that inherited them, were a factor in the township’s addition of eminent domain to the redevelopment zone equation.
After acquiring sufficient land the township and its partners were ready to enter into a sale agreement with Ryan Homes for approximately 100 acres. The agreement provides for two closings, and a transfer of funds will occur at each.
After Ryan Homes has gained all necessary approvals for the project, including those from the township’s Planning Board, the deal will move toward its first closing. That closing will take place after the appeal period for the approvals is past.
Ryan Homes is paying $17 million for the acreage on which it will build its development. Half of that, $8.5 million, will go to the township, and the other half to its partners. The payment to the township will be split, with $4.25 million being paid to the township at the first closing and the other $4.25 million paid 24 months later, at the second closing. It is an unusual payment arrangement, which is part of the reason that Maley said the whole deal will be a “law school class.”
At the time of the first closing, the township will sell a roughly 85-acre portion of the original development site, acreage not being bought by Ryan Homes, to Atlantic-Cape Builders for $1.275 million. Much of that land cannot be developed due to wetlands, but portions of it are developable.
In all, the township stands to gain the $8.5 million from the Ryan Homes sale and $1.275 million from the sale of the remaining land to Atlantic-Cape Builders. Mayor Chris Leusner was quick to remind the public that the township will also be gaining new ratables, increasing its tax base.
Some members of the public raised concern about the impact a large residential development could have on the school system. Leusner pointed to the new revenue that would come from the development. In Middle Township, more than 50% of the total tax bill goes to the school system. The mayor felt confident the school system would have the funds its would need to accommodate any increase in enrollment coming from the development.
Another benefit of the deal comes from the 20% offset in the development for affordable housing. One in every five housing units needs to be part of the township’s affordable housing obligation.
Maley explained that the development by Ryan Homes will be a combination of town homes and single-family dwellings for sale, with the affordable housing being rental units.
Leusner said he hoped that the development would have properties priced at points that make them accessible to young families who find home ownership in the area too expensive. These are individuals who may not qualify under federal rules for affordable housing-designated rental units, but who would like to buy a home in the township and raise their children there.
“I hear all the time the complaint that young families cannot afford to buy homes here,” the mayor said. He pointed out that the township has no control over pricing, but he is hopeful that expanding housing opportunities in the area will lead to an increase in homes accessible by young families.
The two ordinances are scheduled to come up for a public hearing and vote on adoption at the Township Committee meeting on Dec. 16 at 6 p.m. at Township Hall, 33 Mechanic St.
Contact the reporter, Vince Conti, at vconti@cmcherald.com.
