"Township to stay the course with Daibes" - News Record headline 10/14

"The best predictor of future performance is past behavior"

While attending the 10/1 Maplewood Township Committee Meeting I observed the committee members do a terrific job asking the Daibes representatives direct question to understand why there had been no progress in 18 months. They needed to determine the level of trust they could have in Daibes to complete the project.

Possibly the TC Committee's concern was heightened by fact that the Daibes contract had been approved by them, and under their control for 18 months. In response to the many questions they asked, there was a lack of any rationale or logic for the the projects failure to date, nor any insight that should increase their confidence in Daibes performing differently in the future.

Yet, the TC voted to continue the Daibes contract?

Considering the Daibes Project pales in comparison in size and potential impact to looming projects in Maplewood such as the PSE&G Development and the Maplewood PO Development projects, I have two questions for each of our Maplewood Township Committee members:

1) What have you learned from this failure to date, (e.g. less tax revenue due to the delayed project) that will be applied to increase our confidence in the decisioning and management of the larger current and future projects in Maplewood?

2) Based on the failure of the Daibes project to-date, why should the residents of Maplewood have confidence that you as a group will make a good decision on our behalf with the upcoming development projects, and then effectively manage the project to a positive conclusion?

Thank you - John

How would you proceed?

Based on what the developer told the TC at the last related meeting, the project is back on target and likely will work, not sure the complaint here. Citing an old and incomplete N-R story does little at this point.

http://joestrupp.blogspot.com/2013/11/daibes-development-gets-new-okay.html

John,

Why are you posting your questions on MOL rather than asking them at a TC Meeting?

From the Credit-Where-Credit-Is-Due Dept.: For the first time in a long while I agree with Mr. Strupp.

Not sure how these delays have any relevance, nor where the expected external demand for the site would otherwise come from to allow for less time, nor why we would expect a faster track from Mittermaier, nor why anyone would consider a forceful and stern TC a bad thing, but I'm all ears.

Soul and Joe, not a complaint - an observation with a question about moving forward. I think it is reasonable to ask elected officials what they have learned that will impact future decision making.

The developer also said they would be on target 18 months ago but nothing happened. Your article, Joe along with my observations of the meeting did not provide anything that would help me feel more confident going forward. What did you hear that increased your confidence, as I may have missed it?

Soul 29 - one idea, although I preempt it by saying r/e development is not my expertise. I would gain agreement with the developer, based on their past performance, to increase accountability by agreeing on key milestones for the project. Then, connect financial penalties to the milestones that are roughly equal to the tax revenues for the time the project is delayed. This way we protect the tax payer and motivate the developer.

Thanks for asking - John

"The Maplewood Township Committee decided at its Nov. 4 meeting to continue working with Daibes Gas 14 LLC, the Daibes Enterprises subsidiary that owns the former gas-station property located on the southeast corner of Springfield and Burnett avenues. At the committee’s Oct. 1 meeting, members considered terminating the township’s contract with Daibes, and gave the company one month to get its ducks in a row.

"Attorney Joseph A. Vena of Mandelbaum Salsburg in West Orange, who represents Daibes, informed the committee at the Nov. 4 meeting that Robert Mittermaier, Maplewood’s construction official, was in the process of issuing footing and foundation permits to the company. The permits should allow work on the property to begin sometime this week or next."

http://essexnewsdaily.com/news/maplewood/township-to-stay-the-course-with-daibes

I suppose, given that, the real question would be - if they were given that chance to obtain permits and start work, and said they were doing that, what's the status today?

?

Lost, I have asked many questions at TC meetings over the past year. I have also asked questions via email directly to TC members - some answered, some not. In this case, I am interested in gaining the perspective of others - listening too learn. Thanks - John

So you are asking questions of the TC on MOL to gain the perspective of MOLers?
OK.

cstrazka - I think there is one tangible issue in this case - a developed lot on Springfield provides much more tax revenue than an undeveloped lot on Springfield Avenue. Once the assessment is completed on the Daibes-developed lot all we would need to do is calculate 18 months of that tax revenue to determine the consequence to the Township - and this amount would be accurate only if the project moves along smoothly, and on time.

It sounds like you may have been at the 10/1 TC Meeting or listened in on cable. No? I did hear stern and forceful which was great. I did not hear accountability and confidence in Daibes ability to avoid future delays..and we have already suffered a tax consequence. Thanks - John

nohero - thanks for sharing as I do not subscribe to the essex news - most comprehensive article I have seen on this issue. Based on the excerpt from the article you shared, "At the committee’s Oct. 1 meeting, members considered terminating the township’s contract with Daibes, and gave the company one month to get its ducks in a row." it would be helpful to know if the developer has gotten their ducks in a row, almost 60 days later. Thanks - John

Lost - to get the perspective of MOL'ers on the issue to gain insight - as I have already received, and having the TC members reply here would be a bonus and a great
opportunity to share. Thanks - John

JohnHarvey said:

nohero - thanks for sharing as I do not subscribe to the essex news - most comprehensive article I have seen on this issue. Based on the excerpt from the article you shared, "At the committee’s Oct. 1 meeting, members considered terminating the township’s contract with Daibes, and gave the company one month to get its ducks in a row." it would be helpful to know if the developer has gotten their ducks in a row, almost 60 days later. Thanks - John

I don't subscribe to "the Essex news", that's text from the News Record coverage that Worrall then puts online.

Thanks, no hero - John

If I were going to evaluate the Township’s experience with redevelopment projects, I would include all such projects, not just one. In a formal redevelopment project, the town controls the plan and selects the developer, as prescribed by state law. To date, there have been three redevelopment projects completed in Maplewood, as follows:

- The Walgreen’s on Springfield Avenue (across Tuscan Road from the Daibes project)

- The Maplewood Crossing apartments on Burnett Avenue (Phase 1 of 2 complete)

- The Station House apartments on Dunnell Road

Another project is underway for the Post Office site in Maplewood Village, but a developer has not yet been selected.

From a project management standpoint, all three of the completed projects were successful. (We can save aesthetics for another thread…) And in all three cases, the town exerted considerable guidance and oversight to ensure the projects would move forward.

Regarding the Daibes project, a basic due diligence check would show them to be a highly competent and successful developer. Nonetheless, Daibes dragged their feet on this particular project. Whether firing them earlier would have generated more tax revenue is not certain, because it would take time to select another developer to replace them.

Don’t get me wrong, I’m not happy about the delay in this project, and we can always learn from unsuccessful endeavors. But I do believe that the Daibes project experience is not necessarily typical and should not be viewed in a vacuum.

tomcarlson said:

If I were going to evaluate the Township’s experience with redevelopment projects, I would include all such projects, not just one. In a formal redevelopment project, the town controls the plan and selects the developer, as prescribed by state law. To date, there have been three redevelopment projects completed in Maplewood, as follows:

- The Walgreen’s on Springfield Avenue (across Tuscan Road from the Daibes project)

- The Maplewood Crossing apartments on Burnett Avenue

- The Station House apartments on Dunnell Road (Phase 1 of 2 complete)

Another project is underway for the Post Office site in Maplewood Village, but a developer has not yet been selected.

From a project management standpoint, all three of the completed projects were successful. (We can save aesthetics for another thread…) And in all three cases, the town exerted considerable guidance and oversight to ensure the projects would move forward.

Regarding the Daibes project, a basic due diligence check would show them to be a highly competent and successful developer. Nonetheless, Daibes dragged their feet on this particular project. Whether firing them earlier would have generated more tax revenue is not certain, because it would take time to select another developer to replace them.

Don’t get me wrong, I’m not happy about the delay in this project, and we can always learn from unsuccessful endeavors. But I do believe that the Daibes project experience is not necessarily typical and should not be viewed in a vacuum.

There you go again, Tom, being all reasonable and such. Don't you know this is MOL?

A moment of weakness on my part, David.

JohnHarvey said:

cstrazka - I think there is one tangible issue in this case - a developed lot on Springfield provides much more tax revenue than an undeveloped lot on Springfield Avenue. Once the assessment is completed on the Daibes-developed lot all we would need to do is calculate 18 months of that tax revenue to determine the consequence to the Township - and this amount would be accurate only if the project moves along smoothly, and on time.

It sounds like you may have been at the 10/1 TC Meeting or listened in on cable. No? I did hear stern and forceful which was great. I did not hear accountability and confidence in Daibes ability to avoid future delays..and we have already suffered a tax consequence. Thanks - John

Tom said it better than I can, not surprisingly, however your view regarding the straight-up 18 months of lost tax revenue seems to be simplistic on a host of levels, not the least of which is the assumption that there is: a) another developer willing to step in immediately or within such time that there wouldn't be significant lost offset while waiting, b) the lost tax revenues can even be accurately assessed based upon future changes to the applicable drivers (differences between commercial and residential valuations notwithstanding) and not ripe for challenge and most importantly, c) that the hardline approach taken by the town when in search of new development would be ignored or at least not financially considered by future bidders. Biting off one's nose for a few dollars just to spite one's face seems a bit short-sighted, if you ask me, particularly since I believe this lot took quite some time to get moving in the first place.

How do you replace a developer, Daibes, who is also the owner of the property? I know that this is the Peoples Republic of Maplewood, but that would be very hard, not to mention costly and time consuming, to do. Compared to the Beifus site in SO, with a similar dual owner and developer situation, this is moving along fairly well. Anytime one of the seemingly hundreds of abandoned local gas stations can be replaced is a winner in my opinion.

I think John is taking one incident where timing hasn't been ideal and ignoring, as Tom points out, a number of developments that were completed more or less on time.

A duel owner and developer. Now that's unusual hidden meaning in a spell checker.

Tom, I always appreciate your viewpoint, and I agree that it is important to review the entire body of work for a broad evaluation of anything, including local development. My purpose was not to assess the broader development experience and success in Town, but to comment on this decision by the TC, based on what I heard, observed, and read.

To achieve a broader assessment it is important to evaluate and learn from the individual projects. like Daibes and those projects that you mentioned. I am willing to trust your assessment on the success of the other projects you mentioned, although I believe it is too soon to judge both the Station House and Maplewood Crossing projects.

Once we have we have some historical data such as occupancy rates, and assess the financial impact on factors such as the increase in the number of school-age children as a result of the development. Then we can better understand the success of each development. While neither style enhances the Town, in my opinion, I do realize that beauty will always be in the eye of the beholder.

What would be helpful so we all can understand and recognize success (or learn) is for the TC (and Planning Board) to determine and communicate upfront what the criteria for success is for each project: increasing tax revenue net of increase in cost for additional school-age children as an example. Then, we can all assess the success of each project and learn along the way.

I did not suggest replacing Daibes. I did suggest there was a terrific opportunity to ratchet up accountability to ensure the project gets done when and how Daibes commits to it getting done. At this point only time will tell on this project.

Thanks again, Tom - John

Cstrazka, admittedly the assessment is simplistic. As I suggested to Tom, maybe the TC could provide a more accurate and complete definition of success upfront on projects, and in their analysis of success. My guess is, if an attempt was made to replace the developer, litigation would follow.

Using the possibility of replacing them to negotiate penalties (even incentives), however was available. I also don't think it is unreasonable for the Township to take a hard line on a developer that had done nothing in the 18 month history of development as you suggest in your point c. Thanks for sharing your view - John

BobK, some of my comments to Tom and Cstrazka apply to your thoughts especially that I did not emphasize replacing Daibes. I am not ignoring the other projects, but simply focused on this issue in my post. In my mind, the success of the other development projects should not be simply completing the building, but achieving the objectives set out by the TC and Planning Board in approving the development.

In responding to Soul29, I suggested requiring some performance hurdles for Daibes that carried a $ consequence if not achieved. I imagine increasing accountability would generate action. And, if not then maybe the developer s/b reconsidered. Thanks - John

PS - great dialogue! Best wishes for a terrific Thanksgiving to you and your families - John

gaijin said:

A duel owner and developer. Now that's unusual hidden meaning in a spell checker.

Ups. Freudian?

tomcarlson said:

If I were going to evaluate the Township’s experience with redevelopment projects, I would include all such projects, not just one. In a formal redevelopment project, the town controls the plan and selects the developer, as prescribed by state law. To date, there have been three redevelopment projects completed in Maplewood, as follows:

- The Walgreen’s on Springfield Avenue (across Tuscan Road from the Daibes project)

- The Maplewood Crossing apartments on Burnett Avenue (Phase 1 of 2 complete)

- The Station House apartments on Dunnell Road

Another project is underway for the Post Office site in Maplewood Village, but a developer has not yet been selected.

From a project management standpoint, all three of the completed projects were successful. (We can save aesthetics for another thread…) And in all three cases, the town exerted considerable guidance and oversight to ensure the projects would move forward.

Regarding the Daibes project, a basic due diligence check would show them to be a highly competent and successful developer. Nonetheless, Daibes dragged their feet on this particular project. Whether firing them earlier would have generated more tax revenue is not certain, because it would take time to select another developer to replace them.

Don’t get me wrong, I’m not happy about the delay in this project, and we can always learn from unsuccessful endeavors. But I do believe that the Daibes project experience is not necessarily typical and should not be viewed in a vacuum.

Agreed, and I would add these to the list:

Police Station - success
DeHart Park renovations - mostly positive
Springfield Avenue improvements - poor

In general I have faith in our town's leadership on development projects. That's a different thing than being in favor of lots of new residences.

A TON of new residences that go up quickly, tower over the surrounding area and look like crap equals success.

Beijing!!

And a Happy Thanksgiving to you and yours as well, John.