It’s too bad that George Vallone and Daniel Gans – a pair of local developers – can’t get frequent flyer miles for every minute they spend talking on the phone. The two businessmen, who hope to turn the vine-covered Maxwell House property at 11th and Hudson Streets into a bustling residential and commercial complex, are scrambling to find new investment partners after Gotham Partners Management, LLP announced that they wanted to sell their interest in the project earlier this month. Gotham Partners, a Manhattan-based hedge fund, controls 80 percent of the shares in the 24-acre waterfront property according to an agreement that was struck when they purchased Maxwell House with Vallone and Gans for $18 million in 1998. Now, with plans to turn the former industrial site into a 947 unit residential loft complex complete with restaurants, retail shops and a marina submitted to the Planning Board, the managers of Gotham hope to make good on their investment. They’ve put their share of the property up for sale. Vallone estimates that it will take $75 million to buy his partners out. “My partners want me to refinance them out,” he explained Thursday. “They are a hedge fund and they move in and out of investments all the time. They told me that they were happy but that it was time to move out. They are entertaining outside offers. But I am putting together a group of my own. I’ve had tremendous response from some very large investors and I am confident that we will be able to do this.” Vallone said that he expected Gotham to sell its interest in the historic site, which includes the grounds where the first organized baseball game was played, by the end of the year. The imminent sale is unlikely to have a dramatic impact on the developers’ plans to renovate the site. In fact, Vallone said that he hoped the Planning Board would reach a decision about whether or not to give his teams’ proposal the green light by November. “The plan is the plan,” he said. “If the city deems it appropriate, it is acceptable no matter who buys it.” Pier pressure Planning Board members are currently being heavily lobbied by a group of city activists who staunchly oppose the Maxwell House developers’ plans to build a row of townhouses out on two of the three piers that are a part of the property. These open space enthusiasts have grown weary of all the development in Hoboken, and they argue that private development on the piers will spoil the city’s waterfront walkway, which is in the process of being developed. This week, Vallone and Gans met with members of the Coalition for a Better Waterfront to offer up a handful of modifications to the plans that they hoped might appease the activists. Chief among them was a proposal that the Coalition, or the city, purchase one of the piers that was slated for development and turn it into a park. Vallone said that he would be willing to let the pier go for $15 million, provided that the Coalition support the rest of the proposed development of the property including the townhouses on one of the other piers. Ron Hine, a spokesperson for the Coalition who has been active in the city’s waterfront development issues for more than a decade, said that the activists were not likely to take the developers up on their proposal. “I just don’t think that it is realistic,” he said. “The state sets aside $200 million a year for open space so the amount that would be coming to Hoboken would be limited. To invest that on an impermanent structure like a pier does not make a lot of sense. A pier is a very hostile environment. It takes a lot of money just to maintain it. If that were done, it is likely that we would have to re-invest that amount all over again in 15 or 20 years. The best place to invest is right at the water’s edge, not on a pier that is built on wooden pilings 500 feet out into the river.” Although Hine said that he did not think it made sense for the city or the coalition to purchase the area, he did say that he thought it might be possible for the developers to put a pier into a land conservancy. If they were to do that, the developers could claim a tax benefit while leaving the piers free of construction. Additional modifications proposed by Vallone and Gans included a proposal to build a 16-foot publicly accessible riverfront walkway all the way around pier. Under the plans submitted to the Planning Board, the public walkways that would be constructed on the piers would only extend along one side of them, forcing hikers and bikers to retrace their steps when they reached the end of the pier. Hine said that the developers’ compromise proposal did not address the real problem with building townhouses on the pier. “In effect, they want to build a string of million dollar homes on the pier,” he said. “No matter how they build these buildings, there are going to be a lot of very wealthy people who live there who will not want to have a bunch of people traipsing around in their backyards. It is too hard to do this and keep a clear separation between what is public and what is private. That is why we are saying, ‘Build upland, but leave the piers to the public.'”
Majority share of Maxwell House for sale; Vallone, Gans looking for investors; negotiating with waterfront activists
