By Sunayana Prabhu
Could Two River-area municipalities grow a little bit richer, financially or culturally? A bill intended to revitalize coastal towns in Monmouth and Ocean counties just passed the state Senate, possibly making properties more attractive to investors.
The bill, introduced in June 2023 and sponsored by state Sen. Vin Gopal (D-11), extends leasing limits on municipal-owned properties to 25 years for inland parcels; the existing limit of 10 years remains for water-front parcels.
But does this translate into significant economic growth for municipalities within the Two River area? “It could,” said Middletown Township administrator Tony Mercantante. “It’s not automatically going to do that, but it gives the municipalities more flexibility, should they want to lease any of their municipal properties to a broader range of tenants.”
Under current law, the governing body of every municipality bordering on the Atlantic Ocean is authorized to lease or rent any property or building it owns but isn’t currently using for up to 10 years. That can include public parks or recreation grounds. This bill amends that law, extending the 10-year lease limit to 25 years for all inland municipal properties. Properties along the water – the ocean, tidal waters, bays, creeks or rivers – will continue with their existing 10-year lease period.
According to Mercantante, the 10-year leasing period was originally put in place to ensure one entity couldn’t control the property for a long period of time.
“The idea was that waterfront properties, because of their value, shouldn’t be dominated by leases for too long. At least every 10 years they get to either renew a lease or move on and lease to someone else.”
However, he explained, for towns with more inland properties, the 10-year limitation made it “difficult to find a tenant because they (tenants) want more longevity.”
Most of Middletown’s municipal properties are either used for government purposes or for parks and so the township may not initially benefit from the law. But with plans such as the Route 36 redevelopment on the horizon, there could be some advantages. Two properties that are commuter parking lots located along the Route 36 corridor are currently owned by the township and, if the township “wanted to lease one of those for some other use, it would benefit us,” Mercantante said. “We would have more ability to lease it for a longer term.”
Part of a bipartisan effort to revitalize shore communities, this legislation plans to “reduce the burden on local taxpayers while giving a vacant building a second chance at success,” state Sen. Sean Kean (R-30), also a sponsor of the bill, said in a release last month. “This is a significant step forward for our shore towns that are sitting on great pieces of property that unfortunately remain vacant despite their best efforts.”
The legislation could help municipalities attract tenants like restaurateurs, who generally spend a substantial amount of money to renovate properties before opening. “A 10-year lease term is just not reasonable for the amount of money invested into these properties,” said Assembly member Edward Thomson (R-30) in the release.
Whether municipalities are geographically larger like Middletown or smaller like Little Silver, a change in some seemingly routine municipal policies like these could have a deeper impact on a community, even if it is not necessarily financially significant. For instance, a small tract of farmland on Harrison Avenue owned by the borough of Little Silver is currently leased to Sickles for organic farming, next to the borough’s community gardens.
“It’s not really attractive. You’re not renting beach shares or selling smoothies or french fries,” said Kevin Burke, borough administrator of Little Silver. The borough earns an annual rent of approximately $15,000 per year from the lease which is set to expire in January 2026, but if the new limit of 25 years is exercised, the lease could run through 2035, Burke explained.
The article originally appeared in the January 18 – January 24, 2024 print edition of The Two River Times.
