Government South Orange

UPDATED: South Orange Debates Student Housing Project Proposed for Valley Street

Updated December 12, 2018: This story has been updated where indicated with requested clarifications from South Orange Village President Sheena Collum. Updates are shown in italics.

South Orange leaders will decide by the end of the year whether or not to let a planned student housing development on Valley Street move forward.

“We’re going to negotiate our best and final offer,” said Village President Sheena Collum on December 10 at the Board of Trustees meeting. As Collum and some Trustees expressed comfort with the idea of student housing, she said that the governing body was still struggling with the size of the development which would require multiple variances for approval: “Are we going to permit this level of zoning?” asked Collum.

Village Planner Phil Abramson echoed her thoughts: “Setting precedents is a concern to us that we do the best job possible of protecting the future.”

“I believe that we can work through this and make this happen,” said Collum. “But we’ve heard some concerns. Let’s take one final stab at this.”

The discussion followed a lengthy presentation by Kyle Petrelli, co-founder of Stolar Capital; Jake Feldman of Vertical Realty Capital; and Adam Byrley, COO of Preiss Company Student Housing Experts, a student housing management company.

“We’re here to speak about a project that we’ve been working on for almost two years now,” said Petrelli as he opened his presentation. Later, Collum noted that there had been at least three dozen meetings between the developers and town committee and officials, including meetings with the Development Committee (Collum noted that this also included meetings with the public and that the Development Committee is “citizen-led”).

Petrelli described a 51-suite, 177-bed development that would cater to Seton Hall University students. He noted that the slope of the site — which has a 30 ft include from front to back — presents a challenge. “It’s also a very narrow site,” said Petrelli, who explained that, unlike multi-family housing, “Student housing allows more flexible housing.”

Petrelli also noted that the property is in two different zones — a commercial zone in front and a residential zone in back and that the height of the proposed building exceeded the zoned height restrictions.

Finally, he explained that, with student housing, a developer is able to provide less parking on site. Petrelli said that they are proposing 62 spaces — as students would walk to campus, bike or use the SHUfly shuttle. “But residential requirement would be 102 [parking spaces],” said Petrelli.

Petrelli said that a traditional apartment building at the location would not be able to compete with other units coming on the market in the towns due to the constraints of the site that he outlined. “You get less rents; it makes it financially unfeasible. Also there’s lots of competition now for luxury housing.”

“Student housing works,” he added.

Petrelli pointed out that student housing would not burden public schools or trains during rush hour and would add “walking wallets” that would support Village Center retail. He argued that it would also help with the “problem of students in houses disrupting neighborhoods.” Other benefits that he described included “connecting SHU and the town,” making a minimal impact on traffic, and removing a blighted auto body shop.

Feldman discussed the process and said that the original proposal had been for 5 stories but that developers had reduced the size based on feedback from neighbors and the Development Committee. Originally more than 200 beds and 60 suites, the proposed development was now 4 stories, at 42 feet, with 177 beds. He noted that the project presents as two stories at the back due to the incline. (Collum noted that existing zoning permits 36 ft in height in the B-2 zone in front and 35ft in the RB zone in back.)

Feldman assured the Trustees that his team would work with the South Orange Design Review Board on the look and materials of the building. “We thought about it nodding to industrial, automotive roots,” said Feldman, who added that, contrary to some perceptions, dormitory projects were “not a jail. [It] can look and feel like traditional multi-family.”

Financially, Collum noted that the project was not asking for any tax abatements. “This one will pay full freight,” said Collum.

Members of the public then asked a series of questions, many of which centered around the town meeting its affordable housing requirement and whether or not the student housing would be available to students with financial need.

Melissa Wood of Academy Street noted that “meeting our affordable housing goals by 2025 is important. How will this contribute to meeting this? Could these students through a loophole be counted as affordable housing/low income … even though they are affluent?”

Collum provided an expansive explanation, going into the history of the town’s affordable housing policy (“a complete and utter embarrassment,” said Collum). Long story short, Collum said that this development’s affordable housing contribution would aid in the production of 40 new units of affordable family units and a partnership with special needs housing. More than any single project has every produced by a long shot. 

Community members were also concerned that the dorm not be only accessible by “rich white kids.”

AJ Albrecht pointed out, “Our town motto is ‘Everyone belongs here.'” She asked about “people putting themselves through college – they could not live there. What if they are on scholarship or student aid? How do you address?”

Byrley responded, “We can take financial aid into consideration. They can use any approved financial aid.” Petrelli later added that “Seton Hall is more diverse than South Orange. … If the goal is to create a more heterogenous environment, I think we are going to do that.” Collum later pointed out “44% of SHU students are of color” and rattled off numbers of students with federal PEL grants and those who were first generation college students. “Over 70% are receiving financial aid,” said Collum. “Any type of loans and federal grants will serve as guarantees.”

Some commenters questioned whether South Orange should move forward on such a project before a comprehensive plan for Valley Street or the new South Orange Master Plan were completed.

Collum said that although a redevelopment study was underway for the area, “It’s not going to create a comprehensive plan.” Regarding the Master Plan, she said, “It’s great to have a Master Plan in place. But knowing that we need to meet affordable housing goals by 2025 and that the Master Plan is not going to change land values … waiting to see isn’t going to change the circumstances on this site. [It’s] just another delay in time.”

Collum said that she anticipated the Master Plan being completed by late 2019/early 2020.

One community member questioned if the developers were overpaying for the site.

The developers said they felt they were not overpaying. Collum responded that “the value of land, it matters to this governing body because this project requires variances.” She added, “Government doesn’t intervene with private transactions, but here it is contingent on zoning changes and also sets a precedent for what land value would be on Valley Street. We want to avoid artificially inflating value. Numbers matters. We run pro formas.” However, since the town was in the midst of negotiating, Collum said that she could not share that information yet. “There  needs to be some level of faith. I certainly share that concern.”

When discussing how student residents would support local retail, Byrley explained that about 80% of their residents stay over the summer, finding jobs or working toward their degrees.

As the questioning wound down, Collum assured community members that, even should the governing body signal support to the developers, there will still be a “statutory process that happens,” including Planning Board review and approval.

But, for now, Collum said, “We need to be decisive about the direction we are moving in so we’re not spending time on something that is not happening.”

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