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Hekemian Expert Says "Development Will Have No Significant Impact On House Values"

Expert on appraisal and land valuation analyzed three towns with shopping centers across from residential areas to determine affect on property values.

In seeking , attorneys for New Milford Redevelopment Associates, whose managing director is Peter Hekemian, called Mark Sussman, an expert in appraisals and land valuations, to testify whether the proposed development will adversely affect the property values of houses located adjacent to the site. 

Sussman based his testimony on an analysis of three shopping centers located in Bergen County that contained the sale of single family residences in close proximity to the commercial properties. The value of the sale of the properties adjacent to the shopping centers was compared to the value of the sales of similar properties located away from the commercial property. 

The first shopping center analyzed was the Washington Township Town Center. Using data from 2005, Sussman testified that a house located across the street from the center sold for $370,000. Sales of comparable homes in the neighborhood, but not in close proximity to the center, sold in a range from $367,000 to $372,000. In Sussman's opinion, this reflects no significant difference in the house sales. He said the analysis demonstrated that the commercial development had no negative impact on the value of the property located directly across from the commercial zone. 

The second shopping center analyzed was Boulder Run in Wyckoff which is a mixed-use development -- a zoning that Hekemian is trying to obtain for the proposed development of the United Water property. However, whereas Boulder Run's mixed use includes 16 residential units, Hekemian's proposed development in New Milford calls for 221 residential units, with 40 set aside for affordable housing.

Using data from 2006-2007, the singe-family house directly across the street from Boulder Run sold for $540,000. Comparable houses sold in a range from $537,000 to $545,000. Again, Sussman said that there was no significant difference in the property values of the houses sold.

The third shopping center analyzed was the Emerson Shopping Plaza on Old Hook Road that borders both Emerson and Westwood. Since the house across the street from the center that sold was located in Westwood, Westwood homes were used in the analysis.  

Based on data from 2004 to 2005, the house across the street from the center sold for $355,000. Other house sales in the same neighborhood, but located away from the center, sold in a range from $350,000 to $360,000.

Based on the results of the analysis for all three sites Sussman said, "Market data is telling me that house sale values are not affected by being across from a shopping center."

Zoning Board member Lou Denis asked Sussman how many of the houses used in his analysis were located in a flood plain.

"Many of these houses [near the United Water property] were affected by floods and this affects property values," Denis said. 

Sussman responded by saying that the affect of flooding was not the focus of his study.

Board member Joseph Binetti stated that 2005, one of the years used in Sussman's analysis, does not accurately reflect today's real estate market.

"2005 was the real estate bubble; those prices are not comparable now," Binetti said. "In 2005, people were buying anywhere; houses were going like hotcakes, so I don’t think [your analysis] is applicable."

Because real estate values are not part of the board's consideration in granting variance approvals, Patch asked Zoning Board attorney Scott Sproviero what weight Sussman's testimony carries with the board. 

"It is indeed unusual to have an expert on land valuations testify," Sproviero said, emphasizing that property values are not criteria considered by the board in its decision-making process.  

"I think they are trying to allay concerns, rather than establish any factual predicate," he said. 

The hearing of the proposed development of the United Water property will continue with a special meeting of the zoning board on Thursday, June 21 at 7:30 pm in the council chambers of Borough Hall. 

 

Have a question or a news tip? Email the editor Ann Piccirillo at annpiccirillo@yahoo.com. Or, follow us on Facebook and Twitter. For news straight to your email inbox, sign up for our daily newsletter.

Jeanette Friedman Sieradski June 13, 2012 at 12:08 PM
Don't believe him. of course the prices will go down. Prices are falling everywhere, and if my house was facing 221 apartments and a shopping mall, the price would fall even further. So someone cut me a break. He says $50K-70K is not a big difference in the houses he compared. When you are middle class and selling your house $50K is a lot of money.
Jerry June 13, 2012 at 12:17 PM
I think it's quite the opposite. When your property taxes go down from $10,000 to $7,000, buyers will be more attracted and will come back on the market. If I had to choose between a $350k property with $10k in taxes, and a $300k with $7k in taxes, which one do you think I would pick?
Jerry June 13, 2012 at 12:22 PM
Noise, air pollution? I believe much of the traffic on the Boulevard would dramatically decrease, once the new complex is completed, thus decreasing both noise and air pollution for those houses. As for the two lane roads, have you ever heard of excavators? Who said roads adjacent to the property can't be widened?
M. June 13, 2012 at 12:54 PM
It's a flawed study as it only looked at towns with shopping centers as opposed to towns without shopping centers. It does not give you accurate data on how a towns shopping centers compare to towns without. Meaningless data. Also 50k to 70k difference in value would be statistically significant.
TommyIce June 13, 2012 at 12:58 PM
Jerry I live on one of the two lane roads--Main Street. Have you been on Main Street lately? As it is, a few years back, two feet of my property has already been absconded by the town to allow for the "beautification" with new brick work, bump outs for parking (that make it near impossible to turn onto the street with cars actually driving on the road) and enough street lamps that are lit bright enough to make you think you're on runway 2 at Teterboro. Are you suggesting that the boro take more land from the taxpaying owners of property on Main Street? If so, where are people going to sit outside and eat tacos and drink beer at Pancho's?
concerned resident June 13, 2012 at 01:06 PM
Show me where there will be a 30% decrease in property tax if this plan goes through, Jerry. Where are getting this information? Also, the comment about the values in 2005 is relevant. It's a matter of supply and demand. In 2005, there were a lot less houses for sale compared to the amount of buyers. Now, it's just the opposite. How many houses are for sale in New Milford alone? If you had the choice to buy on a quiet street or in view of this huge apartment complex with a massive supermarket, where would you buy? This won't affect home values? Don't listen to there so called experts.
concerned resident June 13, 2012 at 01:24 PM
An additional comment about the study. They are only using data from a shopping center being built. What about a four story apartment complex with a multilevel parking garage that will dwarf any structure in this town? Any home within eyesight of this monstrosity will be affected.
M. June 13, 2012 at 02:03 PM
If you want to decrease your property taxes look at where and how our money is being spent. 49 states can do it for less than NJ. This shopping center would have very little affect at decreasing property taxes and with the number of apartments being built will likely increase your taxes to provide services for the influx of new residents. It surely will also decrease your property value. Thus you will see an increase in taxes and decreae in property value.
Theresa June 13, 2012 at 02:22 PM
I don't want to see studies about homes near a current shopping center. Show me the value of the same home before and AFTER that shopping center was built. Not after it's been established for so many years. Of course a home that was in a quiet part of town is going to be worth less if it's in a major traffic area all of a sudden.
John R. June 13, 2012 at 02:38 PM
JR Jerry, personally, I don't think email is the best forum to discuss basic differences regarding this development . As a member of the SOD exec. committee, I'd like to extend an invitation for you to attend the next SOD meeting (we'll email you as to where and when) to discuss your viewpoints in a civilized,informative and constructive manor. We would be happy to show you from whom we have gathered our statistical information and the process used to analyze it and how we relate it to this proposed development. We would be most interested in reviewing the data and analysis that you have compiled to support your claims that Boulevard will have "dramatically less traffic" and that taxes will be decreased by 30%. On a personal note, I've lived in town for more than 35 years and don't remember any substantial decrease in my taxes. So, Jerry, please join us at our next SOD meeting, you will be given a forum to express your support of the development and hopefully you will be open minded enough to listen to counter arguments. John Rutledge
Roy W. June 13, 2012 at 03:19 PM
Were the houses used in the analysis comparable? For example, same number of bedrooms and baths? Were the houses that supposedly maintained their value also zoned for business, making the value higher for commercial reasons?
miriam pickett June 13, 2012 at 04:17 PM
Jerry - do you really think your ratables will go down? School taxes will have to go up to absorb the number of new children who will be living in the 221 unit apartment complex that will be built on the site. Since the roads surrounding the development are local and not county, New Milford will have to foot the bill for upkeep. Come ot a meeting and have a dialogue with the opponents of this project. Air pollution travels, noise pollution travels. There will not be a decrease in traffic on Boulevard. Oradell is going to gerry rig its traffic patterns so that cars will have to go through New Milford in order to get to the ShopRite. Teaneck residents will be using Boulevard to get to the ShopRite. And of course the white elephant sitting in the middle of town, slowly falling apart and becoming a symbol of suburban decay.
Emily Rostkowski June 13, 2012 at 05:42 PM
The information that Mr. Sussman provided concerning the Wyckoff Boulder Run "Mixed use development" .. data came from 2006-2007. He stated that the home across the street sold for approx $540,000 and the homes in the area that "matched" the home sold from $537,000-549,000. Yet, after doing some research once I returned from the meeting last night... the apartments in Boulder Run were not present or even constructed until late 2009!! Flawed Data!
Emily Rostkowski June 13, 2012 at 06:01 PM
Jerry, I am a bit confused how Boulevard's traffic will be lessened. From my understanding... and perspective.. A 70,500 sq.ft. ShopRite Super Center will draw people wanting to get triple coupons from Bergenfield, Dumont, Closter, Cresskill, Tenafly, Demarest, Teaneck, Bogota, Hackensack, Haworth.. etc. Boulevard is one of the most convenient roads to get there.. it has less stop signs, and not many lights. I enjoy driving on Boulevard.. and if I lived in Bergenfield and had my Sunday paper.. monday I'd be cashing in on my coupons and driving on.. umm Boulevard. Maybe my mindset and thinking is flawed like Mr. Sussman's. Can you explain to me your rationale on how a development will lessen traffic? Thank you.
Denise June 13, 2012 at 07:02 PM
Miriam, all you have said is true....I wonder though, the white elephant sitting in the middle of town....are you referring to Brookchester or the "olde" ShopRite? If you are referring to ShopRite, it actually is beginning to look like the Water Works buildings. As much as I would like to see a passive park and the historical buildings saved, I am beginning to change my mind and see the UW buildings as "eyesores'.
miriam pickett June 13, 2012 at 07:09 PM
Denise: I was referring to the current ShopRite and you're right about the eyesores.
spud June 13, 2012 at 07:42 PM
The old Water Company buildings are not "eyesores," they are being made so by years of demolition by neglect. Which is inexcusable from the eyes of a historic preservationist. This proposed development on the other side of the road would, among many other things, be extremely detrimental to the safety of the stacks AND the buildings which in turn poses a threat to public safety. Much better to actively advocate for the restoration and preservation of these valuable historic structures along with abandonment of the city-within-a-borough that is being proposed by Hekemian.
Ulises June 13, 2012 at 07:48 PM
Jerry, in your example you stated taxes will reduce from $10K to $7K, which is impossible because that would mean this property will generate $13,200,000 every year in taxes ($3,000 * 4,400 homes = $13,200,000). If this property generated that much tax revenue, then you'd have a valid point, but that's not realistic and our taxes will not go down with this development. The reality is this property developed may generate $500K in taxes. Now let's divide that by 4,400 homes and there’s a savings of $114. But Jerry, we'll never see that reduction in our taxes because our school, police, and road work budgets will increase dramatically because the demand on those services will rise. So our politicians favor this development because they want the ratables and it makes them a hero to some (like United Water), but if they allow this development to go through they're going to be sending us a higher tax bill regardless, just like they do every July (the only way to stop tax increases is to do away with the unused sick days retirement bonuses we issue to our PBA & town employees. We could save taxpayers $700 each year if this wasn't being accrued for). Send SODNOW@yahoo.com an email to find out when our next meeting will take place. We based all our findings on facts and the truth. The devil is always in the details and we're trying to educate our neighbors on them, before it's too late.
Big Ben June 13, 2012 at 11:57 PM
They are future eyesores and will be money pits that will serve no function whatsoever to the vast majority of the people. Preserve these historic sites via photography
Jose A. Camacho, Esq. June 14, 2012 at 12:36 AM
The proposed development is a monstrosity. Any small gain in an imagined property tax cut from rateables will be undercut by the increased taxes needed to pay additional emergency police, fire and ems services, additional road maintenance, increased school taxes, and increased services needed for additional flood emergency services to our currently existing residents and the additional resident that would occupy the 221 units the development currently calls for. Additionally the inconvenience of Increased traffic, noise, lighting and air pollution, would all add up higher taxes on less desirable properties in an already down market with no recovery in sight. The proposed development is a recipe for disaster. The united water property would best serve this community as open space which is needed in New Milford. To develop this property would create too many problems for this community to handle. Development not only destroys the last piece of property left that could be used for open space, but sets up a situation where Hekemian or another developer will also develop the current shop rite property with another monstrous project especially since that property is already zoned to allow commercial and/or multi unit family residences. Let shop rite build its new shop rite as already approved on the site it is at now and find a way to keep the united water property as open undeveloped property. It is in the best interest of our town.
Dr.Doom June 14, 2012 at 02:38 AM
Is this guy high? He makes the whole study based on 3 sales? Who in the right mind would pay same $$ for the house near high traffic store and on some quite street?
Denise June 14, 2012 at 03:59 PM
Miriam-Thanks for confirming...I really did want the UW area to become a park, however, the longer this endeavor takes, the quicker the buildings are falling apart.
Denise June 14, 2012 at 04:05 PM
Spud-I understand what you say about preserving history, re: Alice Chalmers etc., however, as much as I am against it, I believe Hekemian will get his new ShopRite. I can visualise it already, with all the building, banging, trucks, heavy equipment rolling in & out.....these stacks & buildings are just going to fall down on thier own......
Nancy June 15, 2012 at 12:12 PM
Jerry just curious. Where do you get your figures from. Can you see the future and know this for sure!
Jerry June 15, 2012 at 01:06 PM
I wonder why you didn't make the same exact comment when other people said house values would go down. Can THEY see the future?
Jerry June 15, 2012 at 01:09 PM
So you're saying a park will not increase traffic, air pollution, noise and so on? Have you been to Prospect Park at 10PM lately? Or to Van Saun Park or Ridgewood Park at 10 AM? Traffic generated by an open space would be even worse than the one generated by the proposed complex, because people go to the park non-stop! Just compare the current traffic flows of Brookchester Apts and Van Saun... would you?
Jerry June 15, 2012 at 01:10 PM
Ulises, are you aware of the town-wide reassessment being conducted by our tax assessor? :)
Ulises June 15, 2012 at 04:30 PM
Jerry, yes I'm aware our tax reassessment but that has nothing to do with your arguement that your taxes will go down because of this development. This property is in the town's 100 year flood plain and that's one of the many reason why this development is poorly thought out. Regarding you other comment, if this property was a park most visitors will be from NM not from the surrounding towns and the traffic won't be much at all. Additionally, most people will walk, job or ride their bikes to enjoy the open tranquil space. Open space is way different than the concrete city they want to develop along the river.
Nancy June 15, 2012 at 05:08 PM
Well from where I sit and watching the real estate section week after week, house values are going down drastically. So its just a matter of facts. This is not only about house values, this is about a quality of life in New Milford that we'll never be able to get back if this goes in.
Lori Barton June 16, 2012 at 07:23 PM
Wow. So many wonderful comments from people who truly care. And one person who seems to not really get it at all. Sorry, Jerry, but absolutely none of your comments make sense or have facts to back them up. Sussman's report is a joke. I have been reading it and have found several inconsistencies after just a brief perusal. I found another property in Wyckoff bordering the shopping center that sold in 2010 that has a view more in line with what is to be expected of the residents of Main St and River Rd. I wonder why that one wasn't used in his study. Maybe because it would have shown a decrease in value of that property compared to others? Hmmm????

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