Jones Lang LaSalle


UPDATE: Two-Phase, $57M Redevelopment Moves Forward
By Eric Peterson
Last updated: March 3, 2006 04:03pm
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RAHWAY, NJ-This city has approved the site plan of an affiliate of Dornoch Holdings for the first phase of a downtown redevelopment, and has formally designed another Dornoch affiliate as the redeveloper of phase two. The total cost of both phases is projected to be $56.5 million.
City officials awarded Dornoch Rahway I LLC the rights to the first phase in May 2005, and as reported by GlobeSt.com, the $11.5-million phase will consist of a four-story, mixed-use building with 36 two-bedroom market-rate housing units atop approximately 7,900 sf of ground-floor retail space at 1551 Main St. Dornoch has now received city and Union County permits, and awaits only final approval from the State before construction starts, expected this spring.

“By redeveloping our downtown area, we will improve the quality of life for all of our residents,” says Rahway Mayor James J. Kennedy. “Dornoch joins me in a vision for our city.”
And Dornoch Rahway II is now formally the designated redeveloper of a group of properties spanning an entire city block along Main Street. Preliminary plans call for a 184,000-sf, six-story mixed-use building with 150 market-rate housing units, a three-story parking garage, 20,400 sf of ground-floor retail, an exercise facility and conference space, carrying a price tag of $45 million, according to Glen Fishman, co-founder of the Lakewood, NJ-based Dornoch. Formal plans are expected to be presented for approval “shortly,” Fishman says.

The second phase development site includes a dozen existing buildings, which would be demolished. Dornoch has already acquired three of them, according to Fishman, and has reached agreements with the remaining owners, apparently avoiding condemnation proceedings for any of the properties.

The projects had their genesis in 2001 when city officials formed the Rahway Redevelopment Agency. In 2002, the State of New Jersey designated the areas around the city’s commuter rail station as a Transit Village, providing them with development incentives. Both of Dornoch’s phases are within walking distance of the train station, which itself was restored in 1999 at a cost of $16 million. City officials estimate that the ongoing redevelopment will generate upwards of $30 million in additional private investment in the surrounding area, as well as more than $1 million in new annual tax revenues.