You are on page 1of 24

Redevelopment Proposal

for the
Merchantville Downtown Redevelopment Area
Viking Associates
771 Cuthbert Blvd. Suite 100
Cherry Hill, NJ, 08002

For Questions please contact:

Robert T. Healey, Jr. Aaron M. Gevers, Esq.

Executive Co-Chairman Assistant General Counsel
Viking Group Viking Group
4 Executive Campus, Suite 100 4 Executive Campus, Suite 100
Cherry Hill, NJ 08002 Cherry Hill, NJ 08002
856-488-2515 856-488-2505

Viking – Merchantville Downtown Redevelopment Area Proposal 1|Page


We at Viking Associates (“Viking”) are pleased to present the following redevelopment proposal
for the historic borough of Merchantville’s Downtown Redevelopment Area (the “Project”). We strongly
believe Merchantville is a highly desirable municipality ripe for reinvigoration and redevelopment.
Contained in this proposal you will find our recommendations for an economically viable redevelopment
project which includes: multifamily rental housing, ground floor retail, pedestrian access and open spaces
intended to engage the public both daily and during special events. Our analysis has concluded that
sufficient data exists to justify development of a middle-to-upper market multifamily rental community
with some limited ground floor retail space that will aid in activating the site. These conclusions are based
on our local demographic analyses and our overall understanding of the regional market, as gained
through extensive research.

While we share the Borough’s position regarding the aesthetic appeal of concepts set forth in the
Redevelopment Plan and its amendments, we’ve concluded that a strictly retail project - as previously
proposed - would result in either an economically unsustainable project for the developer or a financially
insurmountable burden for the Borough (due to the necessity of financial incentives and other municipal
aid). Instead, we propose positioning most of the retail along the Borough’s already welcoming Center
Street corridor. This corridor appears in need of architecturally similar “infill” buildings that maintain a
smaller retail footprint. Supporting this retail is a sizable residential rental component featuring
approximately 88 units of almost equally distributed one and two-bedroom apartments. The proposed
scheme for these building structures dictates ground floor retail flanking the main outdoor pedestrian
areas, residential units completing the ground floor footprint and two or three fully residential floors rising
above the site.

The concepts prepared herein underwent numerous revisions before we felt they achieved and
balanced the objectives set forth in the Redevelopment Plan, including the financial realities which shape
the success or failure of the project. We believe these concepts represent both the Borough’s and Viking’s
best options for successfully activating Merchantville’s downtown district and attracting new businesses,
consumers, and most importantly, pride from all residents of Merchantville.

Please understand that although these concepts and details have been given considerable
thought and research, the design program, unit mix, layout, and rental rates may change as market
conditions dictate. Nothing in this preliminary proposal is intended to constitute an offer or to bind either
Viking or the Borough, but is offered with the hope that we can cooperate to achieve formal agreements
in detailing a substantially similar project with complete terms in the future.


Viking boasts a team of eager development, real estate, and asset management professionals
and has been in business for several decades. Viking started when one of its founders, Robert Healey, Sr.,
a young attorney at the time, began buying and subdividing land. These ventures into real estate
eventually led to the acquisition of a marina, which subsequently led to acquisition of the Petersen-Viking
Yacht Company, which was later renamed the Viking Yacht Company. Since then, the Healey family has
bought, sold, managed, and developed thousands of multifamily rental units, hundreds of thousands of
square feet of commercial properties and significant areas of raw land, notably the redevelopment and
reinvention of a former NIKE missile site in Lumberton, New Jersey into 25 single family homes. Viking is

Viking – Merchantville Downtown Redevelopment Area Proposal 2|Page

also currently involved in a sizable waterfront development project in southeastern Florida and has been
selected as the Redeveloper for an additional project in New Jersey, featuring over 200 acres that is
currently moving into the approvals stage.

The people who support Viking and contribute to its continued success have tremendous talent.
The Executive Co-Chairman, Robert Healey, Jr. has, for nearly a decade, overseen various development
projects and been at the forefront of Viking’s desire to expand its real estate development arm, all while
dealing with substantial and complex issues as a member of the Board of Directors for the Viking Yacht
Company. Jerry Kelly, the Chief Financial Officer, has over 30 years of Real Estate experience in the
accounting, financing, and management of Viking’s real estate holdings and various business ventures
including telecommunications, oil and gas, and technology. Viking’s General Counsel, Bill Mueller, has
been a behind-the-scenes staple in South Jersey and Pennsylvania real estate and development, having
represented a variety of entrepreneurs, real estate developers, and regional corporations during his forty-
plus year legal career. The Assistant General Counsel and Director of Development oversaw the
redevelopment of the aforementioned NIKE missile site, oversees daily management of Viking’s
commercial (retail and industrial) properties, heads our other development projects and performs various
legal tasks relating to real estate. New to the Viking team but constantly contributing valuable insight,
Matt Mattia has worked with both small and national developers on mixed-use projects, holds an MBA in
Real Estate and a PMP certification.

To facilitate this redevelopment, we have engaged a team of external professionals and

consultants. This team includes Barton Partners - Architects and Planners for urban design and
architecture services, Harkins Builders for their construction expertise and Consulting Engineering Services
for engineering input. All three firms have been in business for many years and have received local and
regional accolades. Viking has worked with these firms on other large projects in the past and concurrent
with this Project.

Project Benefits and Goals

Viking’s foremost goal is to improve the Merchantville Downtown Redevelopment Area from an
inactive area devoid of a uniform character and design into a lively, boisterous town center. This town
center will feature green spaces for gatherings and markets, retail shops and services with outdoor
seating, beautiful residential apartment buildings and stunning design elements befitting the Borough’s
charm. We believe these goals are best achieved by our Project which will add to Merchantville’s already
amiable retail presence by adding customers and residents primed to activate existing and future shops
and services. We foresee this Project as a catalyst in cementing Merchantville’s desirability for commerce
and residency approaching that of Collingswood and Haddonfield.

In conjunction with the construction, the Project has specifically been designed to offer a
generously sized courtyard and green area suitable for an assortment of events including farmer’s
markets, town fairs, live music, outdoor movies, car shows and more. These spaces will serve as a
community hub where people can meet, congregate and grab a coffee or some fast-casual fare. This
increased foot traffic will activate the area and create a more vibrant community for both occupants of
the new buildings and passers-through alike. Indeed, we anticipate the activation of the Downtown Area
will bring about new visibility to Merchantville as a whole and have positive collateral effects on ratable
income to the Borough from businesses, and improve residential and retail property values throughout
while not over-inflating them such that current residents would be priced out of the Borough - we hope
to find that happy equilibrium.

Viking – Merchantville Downtown Redevelopment Area Proposal 3|Page

Preliminary Design Program and Unit/Use Mix

With careful consideration for the Borough’s current Redevelopment Plan and several iterations
aimed at best balancing that plan with our understanding of market conditions, Viking has concluded that
a two-building multifamily rental community with retail on the ground floors would serve as the highest
and best use of the site with parking concentrated mostly on the leased lot across Park Avenue. In order
to achieve this, the Project contemplates Borough Acquisition of Block 29, Lot 16 and demolition of only
the addition to the former PNC Bank building. We believe neither this Project nor any other commercially
feasible project can be achieved without the acquisition of Block 29, Lot 16; it is paramount to the
activation of the redevelopment area and Merchantville as a whole.1

The Project considers 88 total residential rental units with approximately 15,000-16,000 total
square feet of new retail space and achieving slightly over 1 acre of community space. Building A will
consist of 37 one-bedroom and 18 two-bedroom units, while building B will contain 15 one-bedroom and
18 two-bedroom units.3 Building height is anticipated to be 48 feet or less for both buildings.

To help mitigate some potential parking issues, building A will have 18 private garage spaces (with
5 tandem spots, i.e. reserved spots immediately outside the garage), which combined with 50 on-street
spaces and 64 stalls within the adjacent surface lot, achieves 137 total parking spots for the project.

(Without significantly burdensome investment from the Borough or another Agency.)
Note all figures are included at the end of this proposal in 8.5 x 11.
Exact unit mix is dependent on architectural, engineering, and market factors and remains an estimate as do
many figures in this preliminary proposal.
Viking – Merchantville Downtown Redevelopment Area Proposal 4|Page
All first-floor units are expected to permit both direct-entry and interior corridor entry such that
from the exterior the units may give more of a classic townhome or brownstone type appearance despite
being new construction multi-family. We believe this adds to the walkability desire of the Borough, Viking,
and current market renters. Some balconies are expected but we have not yet concluded whether there
should be a balcony for every unit. Likewise, small first floor patios are also considered but no decision
has been made on whether they should be included at this time.

Exterior Design

Specific exterior finishes and design elements for the residential components have not been
selected but it is anticipated traditional finishes will be used to complement those historic homes and
buildings in the Borough.4 A modern façade is considered with accent eaves, gables, dormers, and slight
mansard style roofing.5 To that end, the aim is not to construct visually simple buildings, but to utilize
architecturally significant details and present a unique exterior structure rather than a pure rectangle or
monolithic structure. Regarding interior finishes, upper-mid-market materials are expected to be used
throughout with interior amenities similar to those seen in other new construction in the market. High-
end or luxury materials are not expected to be widely used.

These may include brick, stone, or composite material as the situation or market may dictate but always with the
intent of constructing a visually cohesive building.
Unfortunately, specific renderings have not yet been obtained for this proposal, but included herein are older
renderings representative of the general style anticipated (though far from final and they remain uncolored – grey
yellow or orange buildings are existing).
Viking – Merchantville Downtown Redevelopment Area Proposal 5|Page

Landscaping; Streetscape and Traffic

In keeping with the guidelines of the redevelopment plan, the streetscape along East Park Avenue will be
improved drastically through curbside landscaping and hardscaping as the architecture may dictate but
always with the intent to make the Project as traditionally appealing as possible. Some vehicular traffic
and circulation will be necessary to ensure access to the beloved Station as well as service to the retail
and access to the rental garage units. This traffic will be addressed by having main entrance to the site
and surface lot from Park Avenue which will pull most site traffic away from both Center and Chestnut
Streets, although the small entrance to the Station from Center Street is likely to remain.

Please note that renderings throughout this packet, like this one, though indicative of the size and style, are older
renderings which do not account for some subtle changes made and shown on the aerials.
Viking – Merchantville Downtown Redevelopment Area Proposal 6|Page
Retail Component

In addition to the multifamily residential aspect of the project, there will be 14,945 square feet of ground
floor retail split between building A and building B; 12,805 and 2,140 square feet respectively. We
anticipate the retail frontage will have large display windows with between 40% and 60% of the façade as
transparent glass frontage in accordance with the redevelopment plan. However, exact specifications and
details have not been completely vetted given the preliminary nature of the project and we will want to
maintain an aesthetic substantially similar to that seen at McFarlan’s (Block 29, lot 7).

Open Space; Common Green

Also included in the plan are three common areas: a .12 acre (about 5200 square feet) courtyard flanking
the southwest corner of building B and Park Avenue, a .55 acre (24,000 square feet) common green area
on the north side of the site and between the buildings and a .38 (16,000 square feet) acre “pocket park”
on the northeast corner of the site for a total open/green area of approximately 1.05 acres or nearly
46,000 square feet.

Textured Walkways; Pedestrian Focus

To encourage pedestrian access, there will be two textured7 walkways that connect the site by
forming a large T-shape – one running east- west, originating from Center street to the immediate North
of the Bank and the second running north-south from Park Avenue to the existing bike path, both feeding
directly into the aforementioned courtyard. Amenities in the courtyard potentially include fountain(s),
benches, smaller walking paths, sculptures, a small performance stage and outdoor seating for retail.

Potential materials include brick, stamped concrete, and other hardscaping customary for heavy use, but visually
Viking – Merchantville Downtown Redevelopment Area Proposal 7|Page
The east-west walkway is designed such that it will run through building A and terminate at the
courtyard. Permanent string lighting is anticipated to run perpendicular to the walkway and for the
majority of its length. No significant elevation change is anticipated for the walkway except perhaps at
the initial origin along Center Street.

Both textured walkways are expected to be about fifteen feet wide in most areas with the notable
exception being the mouth of the east-west walkway and the area immediately abutting the ground floor
retail in building A (meant for outdoor seating) which may funnel in from a width of nearly 30 feet to 20
feet to the final 15-foot width. The area of the walkway actually covered by any building is expected to be
around 45 continuous feet in any instance where coverage occurs with the ceiling roughly 15 feet above
the walkway.

Viking – Merchantville Downtown Redevelopment Area Proposal 8|Page

Throughout the Project, roof area amenities are considered. Retail spaces may enjoy access to
the second floor along Center Street, which for those retail spaces, is anticipated to remain uncovered
with the residential component set back. The residential set back off the retail on Center Street is
considered in order to prevent a vast wall of structure on Center and instead step back and remain
unimposing despite the three total floors. Roof area amenities are also considered (but not necessarily
shown in all drawings) for residential use.

PNC Bank Building

The PNC Bank building is set to remain, as previously stated, but for the demolition of the obvious
addition made on the South and East (rear) end of the building. Building A will surround and to some
extent overlap the Bank building without enveloping it; the bank is intended to be a center focal piece of
the project and not an ancillary building. Actual use of the Bank building remains negotiable as a public
amenity space, a retail space, private amenity space for the residential or a mix of two or more of those

Viking – Merchantville Downtown Redevelopment Area Proposal 9|Page

Rental Rates; Analysis

To determine rental rates for this proposal, an analysis of the surrounding market from Cherry Hill to
Haddonfield and Voorhees was performed. This analysis yielded an average rental rate per unit per month
of $1,464 for one-bedrooms and $1,915 for the two-bedroom units across the spectrum of new
construction, recently constructed, and existing Class A/B properties. For the retail, we used a current
market rate for triple net tenants in the larger area of $14.00 per square foot.

Areas for Concern; Project Risk

This project requires acquisition of Block 29, Lot 16 also known as One South Centre. This building
simply cannot be made cohesive with any potential development and an office use is not the highest and
best use for the redevelopment area. The Borough should acquire this site prior to the commencement
of the Project.

It is our understanding that part of the site may have experienced some sort of contamination
from use over the years. The Borough should secure funding for the remediation of any contamination,
to the extent possible, from state or federal grants or loans.

Additional consideration should be given to the needs of local brewery Eclipse Brewing which
remains a tenant of the site at the northeast end. We believe a brewery is a good use for the site and
would like to see Eclipse remain as a tenant in one of the designated retail spaces.

Care will be taken when demolishing the PNC Bank expansion but it should be acknowledged that
potential damage may occur to the older portion of the structure. All damage will be avoided to the extent
possible, but a scenario exists where the building may be rendered structurally unsound and need to be
replaced. The possibility also exists that the Bank structure may contain additional contaminants and may
need remediation. It is acknowledged a new roof is needed along with miscellaneous other improvements
and renovations but that same may be achieved with modern materials and practices.

Viking – Merchantville Downtown Redevelopment Area Proposal 10 | P a g e

It may be the case that significant infrastructure improvements are required including, but not
limited to, milling and repaving relevant sections of all three streets bounding the project; adding,
deleting, or enhancing current metered or nonmetered parking; improving or replacing current sidewalks;
expanding the roads to permit proper access and/or turning radii; and adding or changing curb cuts.

The Station will require an access easement through the property on which building A will sit and
we expect the Borough or Viking will require easements from the Station which may include easements
on which buildings may need expansion.

During site preparation and construction, current owners and tenants will have to tolerate noise,
dust, debris, and potential interruption of utilities services as the case may be, though all efforts would
be made to minimize same.

With all projects, market conditions may change so one of the largest risks is that borne by Viking
in that the Project may not be as successful as originally anticipated due to an incalculable number of
variables which may present or change between now and Project completion. Therefore, the Project
design – though to be avoided to every extent possible – may also change and may change significantly
as a result of market conditions, financial infeasibility, or input/resistance from residents.

Potential Zoning and Affordable Housing Relief Required

It is our understanding that, at this time, the Borough has no additional affordable housing
obligation and that the Project would owe no such obligation in construction or fees in lieu thereof. The
potential exists, however, that such an obligation or fees may arise. Such fees have not been included in
our calculation of Project Cost.

The prior redevelopment plan requires a mix of studio, one bedroom, and two-bedroom
apartments. We do not feel a market exists in the Borough for studio apartments and such a requirement
should be extinguished. Likewise, it should not be required every apartment have outdoor space.
Engineering, code, or design restrictions may dictate that is not always feasible.

Relief may be needed from the minimum building setback from Block 61 Lot 4 of five feet.
Currently, a corner of building B is within that setback area.

Relief may be needed from the parking requirement stated in the redevelopment plan. Current
calculations forecast 137 parking spaces available but the plan requires 143 spaces given the Project
proposed. We feel 137 spaces is adequate.

Project Financing

Anticipated Project Cost for this development is expected to range anywhere from $14,000,000
to $19,000,000 depending on engineering, site work, finishes, landscaping, tariff increases, sewer
connections, acquisition costs and any costs for remediation.

In nearly any scenario of project cost, we anticipate both Redevelopment Area Bonds8 and a Long-
Term Tax Exemption will be necessary in order for Viking to obtain commercially reasonable financing and
maintain the proper debt-service coverage ratio to remain in good standing with any lender. Further,
committal of the Borough’s recently received DOT grant as well as the Borough’s cooperation in obtaining

Viking understands the Borough will not consider any RAB funding which puts a burden on the Borough and/or
requires committal of the Borough’s credit or General Obligation.
Viking – Merchantville Downtown Redevelopment Area Proposal 11 | P a g e
any necessary Hazardous Discharge Site Remediation Funding and other state or federal grants will also
be required.

Ownership of the land is anticipated to remain with the Borough while Viking would be granted a
long-term leasehold interest for a nominal fee.9 In addition, the Project requires Viking be named
Redeveloper and redevelopment documents including a redevelopment agreement, financial
agreement,10 and possibly special assessment agreement would need to be executed before the Project
can commence in any meaningful way.

Liquor license(s) are anticipated to be required by one or more tenants of the retail components
of the site. In the event of a leasehold interest granted to Viking, if no licenses are available, an annual
concessionaire license may be required.

Project Schedule

From the execution of the redevelopment documents to completion of the project is estimated
to take three years. This timeline assumes six months for thorough due diligence, one year for approvals
(heavily dependent on whether DEP or DOT needs to be involved as Borough and County approvals should
not be an issue), plus another year and a half for site improvements and construction.

For reference, assuming the concept is acceptable as-is, we estimate it would take an additional
six to eight months to negotiate, draft, and effect the redevelopment documents.

We believe the concept and scenario we have proposed for this Project achieves the Borough’s
identified goals of 1) pedestrian orientation; 2) creating a destination that will attract people to the
Downton; 3) creating a sense of place with architectural character; 4) financial feasibility for a
Redeveloper; and 5) adequate parking for downtown. The Project is intended to reflect quality,
permanence, and physical integration with the Borough through design elements and quality

Financially, the project will bring direct tax revenue to the Borough11 through payments in lieu
of taxes made by Viking or its designee for the residential and retail portions plus any income indirectly
received from an increase in local property values. That’s not to forget the real benefit of a successful
and attractive new town center will be the jewel of the area, bringing in new residents who will frequent
both new and old businesses and in creating a new face for the Borough.

The term of the lease would be dictated by the term the Lender may require in order to provide reasonable
financing. The term is likely to be fifty years or more.
This contemplates Viking submitting a LTTE Application to the Borough prior thereto.
It may be the case that though an overall reduced tax amount may be requested through a PILOT/LTTE, the
Borough may receive more than they otherwise would have at normal rates given the change in the allocation of
tax payments (i.e. County and School’s portions are cut substantially – though the Borough can agree to give the
school revenue from the PILOT they receive).
Viking – Merchantville Downtown Redevelopment Area Proposal 12 | P a g e
Viking – Merchantville Downtown Redevelopment Area Proposal 13 | P a g e
Viking – Merchantville Downtown Redevelopment Area Proposal 14 | P a g e
Viking – Merchantville Downtown Redevelopment Area Proposal 15 | P a g e
Viking – Merchantville Downtown Redevelopment Area Proposal 16 | P a g e
Viking – Merchantville Downtown Redevelopment Area Proposal 17 | P a g e
Viking – Merchantville Downtown Redevelopment Area Proposal 18 | P a g e
Viking – Merchantville Downtown Redevelopment Area Proposal 19 | P a g e
Viking – Merchantville Downtown Redevelopment Area Proposal 20 | P a g e
Viking – Merchantville Downtown Redevelopment Area Proposal 21 | P a g e
Viking – Merchantville Downtown Redevelopment Area Proposal 22 | P a g e
Viking – Merchantville Downtown Redevelopment Area Proposal 23 | P a g e
Viking – Merchantville Downtown Redevelopment Area Proposal 24 | P a g e