Business Government South Orange

South Orange Nearing Redevelopment Agreement for ‘Blockbuster’ Site

South Orange leaders are hoping to introduce an ordinance to approve redevelopment and financial agreements for the so-called “Blockbuster” site sometime this fall.

At the July Board of Trustees meeting, Village President Sheena Collum asked Village Trustees to indicate whether or not they supported a potential deal that had been brokered with HubRealty which is seeking to redevelop a large portion of the block of South Orange Avenue between Vose Avenue and Scotland Road.

Support among Trustees was overwhelming.

The proposed development includes 2,500 sf of ground floor co-retailing space (out of a total of 14,000 sf of new commercial space), 110 housing units (99 market rate units and 11 affordable housing), and a $2 million contribution that will be allocated towards library renovations and a structured parking garage currently being studied by Hardy H3 Architects.

Collum told Village Green recently that there are a few more steps to complete before any ordinance is introduced: “Their architects will be meeting with our Development Committee and Design Review Board and also with the library architects. We’ll also be having a community meeting on the overall project prior to introduction.”

In July, Collum explained that the 3-year negotiation process with HubRealty — a company run by the Lustbader family — had been arduous but ultimately fruitful.  She told the Village Green that the Township had negotiated a “25% reduction in height, 26% reduction in units, 25% reduction in density, 30% increase in retail square footage and significantly more favorable financial terms.”

The final proposed plan for the one-acre site would be “consistent with scale of The Avenue, maxing out at 52 feet on average in height” and would also follow the density of The Avenue at 74 units per acre.

“With any redevelopment project, it’s about balancing good planning and community benefits against project economic viability,” Collum told Village Green. “There are tradeoffs that need to be made. If you’re a resident who wants to see maximum tax revenue, advocate increasing the density and height. If you want project costs to go down, compromise on the quality of construction materials or advocate for lower parking ratios. If you want the project to drop a story, know that you’ll be sacrificing the on-site inclusionary, affordable housing as the market rate units are what is subsidizing that for moderate, low and very low-income families, seniors, and residents with disabilities.”

With respect to the overall financial agreement, Collum added, “If you calculate the various parts to this agreement, our taxpayers are looking at a direct financial value of over $30M as opposed to the existing conditions if we do nothing.”

(See details of the proposed agreement below.)

The ground lease with the Township would provide 2,500 sf “to support co-working and incubator space.” Collum called this aspect of the project “absolutely exciting.” The co-retailing space would be leased to the Township “for $1 for 25 years, to be managed and operated by a nonprofit comprised of local makers and artists and also serve as an incubator space for new retailers testing the waters in the downtown,” Collum told Village Green.

The 25-year PILOT — or payment in lieu of taxes — to incentivize the project would have the developer pay the following to the Township:

  • 10% of annual gross revenue for the first 10 years
  • 12.5% of annual gross revenue for the next 10 years
  • 15% of annual gross revenue for final five years

“I think this shows a trajectory of moving away from PILOTs,” said Collum, “and increasing the amount of money that we will receive for capital improvements.”

Trustees Mark Rosner was excited about the retail aspect of the project: “We need much improved retail space to make the downtown work.”

Trustee Steve Schnall said that the Lustbaders had been “pretty collaborative to work with” and would be “a good partner for the Village.” Like Rosner, he called the ground floor commercial space “a game changer in terms of co-working space. … It’s so capital intensive to try to sign a long term lease on a prime location like South Orange Avenue.”

From Village President Sheena Collum, the terms of the agreement are as follows:

Land Use

  • 99 market rate units, 11 affordable housing units for low income families with a 30-year deed restriction
  • 14,000 sf of retail space fronting on South Orange Avenue
  • Underground parking for tenants and 75 surface parking spaces in the Taylor Place Lot for the public, a net increase of 18 spaces.
  • The overall scale and density of the project is consistent with The Avenue with the average height of 52 feet and 74 units per acre.
  • Environmental cleanup of contaminated land.


  • $2M upfront which will go towards the library/municipal complex and structured parking garage currently being evaluated and designed by architects designated by the Board of Trustees and Library Board.
  • $825,000 into the Village’s Affordable Housing Trust Fund to partner with nonprofit affordable housing developers and/or do market to affordable buy-downs of existing units in town.
  • 2,500 sq. ft. of “co-retailing” space with build out, leased to the Village for $1 for 25 years, to be managed and operated by a nonprofit comprised of local makers and artists and also serve as an incubator space for new retailers testing the waters in the downtown.


  • The proposed project will be the 5th highest revenue generator to the town.
  • The schedule of service charges for the term of 25-years begins with a baseline of 10% of annual gross revenue and will escalate contingent on the success of the development moving to 12.5% after year 10, and then 15% for the remainder.

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