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A pour substitute to speed Sandy rebuilds

Expert: State-issued liquor licenses may encourage development in hard-hit towns

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Robert Cooper planned to build in Belmar before Sandy struck, but still says the concessional liquor license is 'as important as any part of the deal.'
Robert Cooper planned to build in Belmar before Sandy struck, but still says the concessional liquor license is 'as important as any part of the deal.' - (AARON HOUSTON)

The rebuilding of Belmar's boardwalk has grabbed headlines in recent months, with an ambitious plan to reopen the structure well before Memorial Day weekend. But on the other side of town, an effort to redevelop the borough's marina is slated to forge ahead, and it could be one model through which post-Hurricane Sandy development gets done in hard-hit towns.

The rebuilding of Belmar's boardwalk has generated plenty of headlines, with a stronger structure that should be open well before the tourists arrive Memorial Day weekend. But it's the redevelopment of Belmar's marina at the other end of the borough that may foretell how post-Hurricane Sandy development gets done in hard-hit towns.

Local officials and Chefs International Inc., the Point Pleasant Beach-based restaurant group, are working to finalize a roughly $8 million redevelopment plan for the marina, which would add an 18,000-square-foot dining and commercial building and miniature golf course to an outdoor bar that opened there last summer.

Notably, the redevelopment is the product of a public-private partnership, though it predates Sandy's arrival by several months. A proposal calls for Chefs International to lease the borough-owned land for at least 30 years, starting at about $240,000 annually, and the business will seek a special state-issued liquor license, called a special concessionaire permit, to operate its bar and restaurants.

While municipal liquor licenses are limited by population and historically expensive, the state can issue nontransferrable concessionaire permits to a vendor who has a contract to sell alcohol at publicly owned sites. Robert Cooper, president and CEO of Chefs International, said that permit is "as important as any part of the deal."

"It's an area that's in need of redevelopment, and being able to take advantage of a state concessionaire's permit has been really exciting for us," he said.

Chefs International already is using a concessionaire permit at the outdoor, portable patio bar, 9th Ave Pier, it opened at the marina in July.

A spokesman for the Division of Alcoholic Beverage Control said the agency has been in preliminary discussions with Chefs International about applying for an extension of its permit.

It's a strategy the state has sought to use for other projects, too, including the former Xanadu project in East Rutherford, which has stalled but may be resurrected by a new developer. The state in 2008 issued a concessionaire's permit for one of Xanadu's would-be restaurants, drawing a legal challenge from other local establishments that ultimately failed.

The outcome of that case "brought clarity to the legal situation" of such permits, and they are "potentially a great economic development tool," said William Harla, an attorney who represented Xanadu's developer at the time. They've been underutilized, he said, noting that the economic downturn and a lack of awareness may contribute to that.

"Perhaps there just hasn't been enough to tip the scale, but as the economy is getting better, I think these special concessionaire permits really do present a good incentive to perhaps get a project off the ground," said Harla, a partner in in DeCotiis, FitzPatrick & Cole's Teaneck office. "It can make the difference in a lot of projects."

He also said "there's no question" concessionaire permits can help Shore towns post-Sandy, but conceded such arrangements can stir opposition from bars and restaurants that pay steep prices for municipally issued licenses, as seen in the Xanadu suit.

"Any town is going to want to take some of those things into consideration," Harla said. "I'm sure they'll want to balance those concerns among their local licensees, but that's part of the local process."

Cooper said he expects the project to be considered by the borough council next week, and aims to break ground in September. The project, which would then open by Memorial Day 2014, calls for replacing the current marina building with a structure that has two year-round restaurants, a small retail space and offices for the borough's marina business. It would also become the largest of Chef International's 10 properties.

"Being able to put the pier business out there, and then this project, it really is going to attract a lot of people to that particular part of town," Cooper said. "The beach has always been the big draw, and it always will be the big draw, but now there's just another reason to come and stay in Belmar."

The partnership between Belmar and Cooper's company predates Sandy by several months, when talks with another prospective developer had fallen through. Chefs International, which owns Shore restaurants like Jack Baker's Wharfside and Lobster Shanty, stepped in last spring and moved quickly to open the marina's outdoor bar.

Both Cooper and Mayor Matthew Doherty said Sandy did nothing to derail the plans, despite causing a host of other problems for both sides. The storm left Belmar's mile-long boardwalk in ruins and flooded a large section of town; meanwhile, Chefs International lost food and equipment and suffered damage in Point Pleasant Beach, where it operates four restaurants. The worst damage occurred at the Lobster Shanty, Cooper said, which had three feet of water throughout the building.

But Cooper said the damage "hasn't slowed us down from getting ready for the season," and the company also plans to reassemble and reopen the 9th Ave Pier bar by next month. He said the bar components could be moved in advance of another major storm, and the new building would be built according to any new height requirements.

The project's first phase already is a critical source of non-property tax revenue, Doherty said. It also complements the borough's efforts to restore the boardwalk — a feature that has been a piece of the community since 1875 — and resurrect the local economy in time for the summer season.

"We're not going to let anything slow us down," Doherty said. "Getting the boardwalk completed by Memorial Day — that's vitally important for both the character of the town … and also for the small businesses that survive based on the tourists here in the summer."

E-mail to: joshb@njbiz.com
On Twitter: @joshburdnj

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Joshua Burd

Joshua Burd

Josh Burd covers real estate, economic development and sports and entertainment. Before joining NJBIZ in 2011, he spent four years as a metro reporter in Central Jersey. His email is joshb@njbiz.com and he is @JoshBurdNJ on Twitter.

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