Pushing Riverfront Redevelopment in South Jersey

Commerce Square Vistas LLC, a partnership between two local real estate development firms, plans to start construction next year on four Class A office buildings totaling 252,000 square feet of space on 20 underutilized acres of an existing business park known as Commerce Square. The 70-acre waterfront commercial property, which was once the site of the Burlington Army Ammunition Plant, is home to four existing buildings that were constructed during the 1980s.

The buildings include a cheesecake production facility for Mother’s Kitchen; an office and flex building occupied by Canon Business Services, a multitenanted, mixed-use property and the Burlington County YMCA Riverfront Complex. NJ Transit also operates a rail station on the site for its River Line commuter train line, which runs along the Delaware River between the cities of Trenton and Camden.

The accessibility of Commerce Square, which is also by the Route 130 corridor and the Burlington-Bristol Bridge into Pennsylvania, should be a strong incentive for employers and employees to consider the proposed business complex, says Jay O’Donnell, who is spearheading the project. O’Donnell, who heads The O’Donnell Group, a Moorestown-based commercial realty services firm, and Michael Cohan, owner of New Vistas Corp., a Ventnor-based real estate services firm, are the sole principals of Commerce Square Vistas LLC.

“It’s an ideal location for a corporate office user to consider,” says O’Donnell. “It gives something different than the traditional suburban office park that we see in other areas of southern New Jersey, especially in the Mount Laurel and Moorestown area.” An urban business park, he explains, offers employees the flexibility to commute to work via public transit, on foot or by car. By contrast, workers are usually required to drive to suburban office parks, he says.

The project, which is expected to create between 700 and 1,000 jobs, would bolster redevelopment efforts in Burlington City and other towns along the Delaware River, according to O’Donnell. “Most of the projects that one reads about in the river towns of Burlington [County] right now have to do with housing,” he says. Commerce Square, by providing new jobs to area residents, would enable more people to buy the new homes, making the residential projects more viable, he explains.

Burlington City, which was founded in 1677 and has a population of 9,736, is part of a revitalization effort called the River Route, which Burlington County established in 1995 to assist 12 municipalities along the Delaware River and Route 130. Through the River Route plan, companies that invest in the towns are eligible for zero-interest loans and other financing available through the county’s Route 130 Revolving Loan Fund. The towns, which run from Palmyra up to Florence, are all centuries-old and were originally built up around heavy manufacturing, particularly steel and metal production.

“We’ve found disinvestment in a number of these older communities,” says Mark Remsa, director of the Burlington County Department of Economic Development and Regional Planning in Mount Holly. “These are older municipalities that experienced some of the earliest residential and economic development.” The towns, he adds, also experienced some of the earliest declines as the state began to shift from a manufacturing-based economy to a service-based economy in the 1960s.

The establishment of the River Line has helped to turn around some of these communities, notes Richard Harris, director of the Senator Walter Rand Institute for Public Affairs at Rutgers University in Camden. “There is new development at all the transit stops on the River Line,” he says. Towns “have done a good job of marketing places along the River Line as bedroom communities for folks who want to work in Trenton and want access to inexpensive transit.”

Commerce Square’s rail connection will be a major talking point for the proposed business complex, says Remsa. “We want to capitalize on that and leverage that as a way to get people to and from their jobs,” he says. “It may be a good marketing piece for the property.”

O’Donnell and Cohan, who both held a number of economic-development jobs before venturing into real estate, first became involved with Commerce Square through Cherry Hill-based Flying Fish Brewing Co., a New Vistas client that was looking for a site to build a new headquarters and production facility. The site search brought O’Donnell and Cohan to Burlington City and Commerce Square. Eventually, the two teamed up to form Commerce Square Vistas and last July signed a redevelopment agreement with the city, which owns the property.

The project is likely to be built in phases and would be completed over a four- to five-year period, according to O’Donnell. Each of the four buildings would have a land lease for 50 years, with two 25-year options to extend the lease, he says.

One obstacle, however, has been getting clearance from the state Department of Environmental Protection (DEP) to build on the 20-acre underutilized portion of Commerce Square. Because of environmental issues associated with the site’s previous use for ammunition production, the agency has required further site investigation of the 20 acres. The city, which was recently awarded a $162,800 DEP grant, will be conducting investigations over the next four to six months, according to O’Donnell.

The site’s environmental issues have left the project’s development schedule up in the air, which has led Flying Fish to break its original commitment to move to Commerce Square. But the brewing company, which has remained in its previous location, still maintains an interest in the site, says O’Donnell.

“We will certainly continue promoting the project and talking to various brokers and business groups about the business complex we’re proposing,” he says, estimating the four proposed buildings will cost $150 a square foot, or roughly $38 million, to construct.

In addition to possible environmental remediation, the developer will likely have to obtain waterfront development permits from the DEP since the 20 acres to be developed are on the tidal portion of the Delaware River, says Burlington County’s Remsa. The current state of the economy is another concern, he adds.

“Today’s economic climate would have higher risks for anyone who’s building a spec office building,” he says. A developer would likely put up one building and wait for it to fill up with tenants before proceeding with the next building, he says.