The company’s vision for the traditional mixed-use project, where the 112-unit rental component broke ground last fall, is eventually to produce all the energy the residential, office and retail users at Stafford Park need onsite.
Making use of both solar and wind power, with the possibility of geothermal energy generation somewhere down the road for the 565-unit single-family element of the project, Walters plans to set up an independent energy district, in partnership with the state’s Board of Public Utilities (BPU) and Atlantic City Electric, to serve the community that the 25-year-old, multi-disciplined residential and commercial real estate organization is building in the state’s Pinelands Region, the country’s first national reserve, where protection of the area’s unique ecology is regulated by the Pinelands Commission.
“We have spent the past year working with the Board of Public Utilities and Atlantic City Electric and everybody’s looking favorably upon it. There’s a real movement right now in the world to produce sustainable energy,” Edward Walters Jr., Walters Group founder and partner, said last December.
The creation of such an energy district is difficult, hampered by a labyrinth of antiquated rules and regulations that have been on the books forever, but he is confident the regulators will come up with a process that will allow a project like his to produce its own electricity and resell it to the customers within the community, said Walters, whose company has evolved into a leading developer of diverse properties with a focus on Ocean County, NJ, and a dedication to the preservation of its natural environment.
“It’s taking a little longer than we thought, but everybody’s working together to make that happen,” he said, predicting a spring breakthrough that will allow him to put forth a viable plan for the energy district. “But, we need the economy to come back. Right now, things are frozen up and it’s not easy to get a $16 million project off the ground,” he said of his plans, which include planting a solar farm on the 55-acre landfill that had been a Catch-22 kind of nightmare for Stafford Township for nearly ten years.
In return for the capping and remediation of the landfill that was identified by the New Jersey Department of Environmental Protection as a potential risk to the environment in 2000, Stafford Township gave Walters the land on which Stafford Park is underway, ridding itself of a potential financial disaster, while gaining a revenue-producer and more than 100 new dwellings for residents earning low to moderate incomes.
The Walters Group, which began as Walters and Sons Construction Company in Barnegat on New Jersey’s east coast in 1984 as a single-family custom home builder and started building multifamily in 2003, also cleaned up some 14 acres of an unlicensed landfill, where a brand new Target opened for business last summer.
“Every last bit of trash has been unearthed and put on trucks and trucked away,” said Walters of the 525,000 cubic yards of trash from the unlicensed landfill, where garbage and debris had been dumped since the early 1950s.
In February, Walters Group completed the $31-million remediation of the licensed, but retired, landfill that is located west of the business park property and once topped the state’s environmental protection agency’s most-wanted-closed list, bringing to an end a situation that once threatened the township with financial catastrophe.
The landfill that, by the beginning of this century, was seeping into nearby Mill Creek and threatened to pollute municipal well water was ordered closed by state in 1981 and quit accepting garbage in 1983. In 1989, the township submitted a landfill closure plan to the New Jersey Department of Environmental Protection (NJDEP), only to learn that the permit came with the requirement that the township post 100 percent of the landfill closure guarantees, including the 30-year post-closure costs, in cash, a condition that would have imposed a massive financial hardship on the township’s taxpayers.
A township financial analysis indicated that the price would be around $45 million and would result in an immediate 15- to 20-percent property tax increase to Stafford Township taxpayers’ bills that would remain in effect for at least 20 years. The township would have no choice but to sue all the individuals, companies and municipalities that ever deposited garbage in the landfill, in order to recover some of the closure costs — litigation that could go on for years. Because the NJDEP would not waive the onerous requirement, that plan was shelved.
In 2001, the NJDEP informed the township that the landfill had moved up to number one on the agency’s list for capping and closure, according to the regulations administered by the Pinelands Commission, which had advised the township that no further development or redevelopment in the adjacent business park, which then consisted of a few office buildings, a recycling center and a county animal shelter, would be permitted until the township took care of the landfill problem. If Stafford Township failed to remedy the situation, the NJDEP threatened to do it and charge the township for the work.
But Stafford got lucky. The NJDEP ran out of funding around that time and couldn’t carry through with the threat, giving township officials time to conduct an RFP that blossomed into a public/private partnership with the Walters Group, which was chosen because it is locally based and had a positive track record for completing such challenging projects.
In September 2006, a redevelopment agreement was entered into between the company and the township under which the company would close and cap the licensed, but retired, landfill and clean up the unlicensed landfills on the property, in exchange for the business park land and a tax abatement for the retail elements of the community.
According to the agreement, the developer must pay all property taxes to all taxing entities on the assessed valuation of the land, but is entitled to a phased tax abatement on improvements for the community’s retail component for 15 years, but Stafford Park’s residential, office and recreational elements are specifically excluded from the abatement. As of the beginning of December, the community’s planned 25,000 sq.ft. of office was complete, along with 380,000 sq. ft. of the retail. Plans for another three phases of retail construction eventually are to include a total of up to 650,000 sq. ft. in a market plaza setting. An adjacent 90,000 sq. ft. lifestyle center will be occupied by smaller national users, designed as upscale and pedestrian-friendly, integrating open-air cafes, performance spaces, fountains and a gazebo.
In order to mitigate the community’s impact on the local school district, the 565 single-family homes that Walters plans to start in 2010 or 2011, depending on how the market behaves, must be age-restricted. The market-rate, single-family homes likely will range from 2,000 sq. ft. to 2,600 sq. ft. and sell for prices ranging from $350,000 to $450,000.
Because Stafford Township had owned the business park property it gave to the Walters Group since 1955, the land hadn’t generated any tax revenue to any governmental agency for more than 50 years. By allowing the Stafford Park project to move forward, the financial agreement on the commercial property actually increases the rate-able for the township, school districts and county because land taxes will be paid.
While the landfill work was underway, Walters Group, which is responsible for construction of Stafford Park’s infrastructure, relocated the township’s recycling facility, several county municipal offices and the animal shelter. The county’s old animal shelter was demolished at the final phase of the landfill closure and, in exchange for the opportunity to redevelop the site of the old facility, the Walters Group donated the cost of construction and materials to rebuild the brand new, 5,000 sq. ft. state-of-the-art animal shelter that opened last summer.
Not long ago, the Ocean County Board of Social Services moved its satellite office into a newly constructed 19,955 sq. ft. building in the business park, all of which is being built with the goal of LEED silver certification.
The recently completed Costco, Target, Best Buy, Dick’s Sporting Goods and PetSmart stores all were built to the silver standard, using glues, carpet and paint with low-VOC emission and as much recycled building materials, like glass and concrete, as possible, said Walters.
“All the electrical and heating systems were designed at a super-high efficiency level,” he said, estimating Stafford Park’s buildings are around 30 percent more energy efficient than if they were simply built to code. He expects to install solar panels on the rooftops of the completed retail buildings next spring.
A stringent storm water management system includes capturing rain water that lands on the property’s parking lots for reuse as landscape irrigation, which, in addition to the other green building techniques, will result in one of the few private mixed-use projects in the country to be entirely LEED certified.
Low-income-housing tax credits (LIHTC) from the New Jersey Housing and Mortgage Finance Agency (NJHMFA) are funding the construction of the five-building, three-story, garden-style apartment community in Stafford Park that will include one- to three-bedroom units affordable to those who earn low to moderate incomes. Walters expects rents for the apartments that were designed by Philadelphia, Penn.,-based Martin Architectural Group will range from around $600 to $1,000.
First units are expected to deliver in August, with completion of the apartments four months later.
A partnership of First Trust Bank and Wilmington Trust funded the closure of the landfill, all the improvements and cost of construction of the office and retail components of the $400 million Stafford Park project, where Walters expects the retail to be finished by 2011 and the for-sale residential completed five to seven years later.
By then, he hopes the community will be pretty close to net-zero in terms of energy production and usage thanks to the six-megawatt solar farm he hopes to plant on the former landfill, along with wind turbines and geothermal power stations he plans to include in the power-production line-up. The plan for the solar farm will have to wait until the credit markets thaw a bit, said Walters.
But, a recently completed year-long study by Rutgers University’s Institute for Marine and coastal Sciences of a test wind tower that was installed on the property indicates that the wind resources seem favorable for Stafford Park’s energy production needs, he said.
“The next step is to go out to bid to purchase the wind turbines and last I checked the prices for those were ranging from $2 million to $3 million,” said Walters, whose company has underway two other projects targeted for LEED certification — the 78-acre Whispering Hills in Barnegat that will include single-family homes, townhouses and 52 affordable apartments and Albertson Village in Haddon Township near Camden, where he plans to redevelop a former three-and-one-half acre industrial site into a 76-unit luxury apartment community that is expected to start this spring.
