News that three players in Red Bank’s Union Street Village have been indicted for fraud leaves Red Bank facing a key question:
Will the project, which has already sat idle for almost two years, become a long-term white elephant now that the real estate market is plunging?
A Monmouth County Grand Jury last week indicted a Middletown building contractor, his fiancé and an Edison woman on charges of theft by deception and forgery in connection with what authorities say was a diversion of more than $2 million from the partnership that owned the site, at the corner of Union Street and Wharf Avenue.
The victims: Patricia and Neil Malloy, the longtime owners of the Olde Union House restaurant, which the condo project replaced.
According to the indictment, 53-year-old general contractor Timothy Hurst, a frequent patron of the Olde Union House, proposed the project to the Malloys and came to control its finances after Amboy National Bank of Old Bridge loaned $6.8 million toward its completion. The loan was secured by the property and the restaurant’s liquor license.
But questions arose about 14 months ago after Hurst told the Malloys the project had experienced cost overruns. An investigation led to evidence that Hurst and his 50-year-old girlfriend, Laurie Quinn, were building a house on Pine Street in Middletown with funds that had been diverted from the project.
From a press release issued by Monmouth County Prosecutor Luis Valentin on Friday:
According to the Asbury Park Press, lawyers for each of the accused said they were innocent of the charges.
“Unfortunately, the corporation in question, like so many corporations in this day and age, went bad and any disputes involving funds are civil in nature and absolutely, unequivocally not criminal,” said Hurst’s attorney, Mitchell J. Ansell, Oceanport.
Quinn’s attorney, Michael D’Alessio of Roseland, said his client built a new house but had no knowledge whether any of the money to do so came from the Village Street partnership.
“Any check she received from Hurst, from him personally or the LLC, was his contribution to joint expenses of living together,” said D’Alessio, who also denied his client had access to a company credit card.
Rowe, who was released on her own recognizance after surrendering to the prosecutor’s officer Thursday, was merely doing her job when she signed what are now alleged to be forged checks, said her lawyer, Steven D. Cahn of Edison.
Hurst was freed on $100,000 bond; Quinn was released on a $25,000 bond, according to the Press.
redbankgreen was unable to locate the Malloys for comment.
The project has been in a state of near-completion for about two years. At one time, a sign outside claimed that two of the 8 units had been sold, but Monmouth County property records show no unit sales.
With views of Marine Park and the Navesink River, the project’s location is considered desirable for buyers willing to tolerate some urban challenges. Two bars are nearby, and the emergency room of Riverview Medical Center is across the street.
But the units carried pricetags that rivaled or even surpassed properties with actual waterfront access, private garages and entrances and other amenities.
One unit, for example, with two bedrooms and two-and-a-half baths, was originally priced at $2.15 million. A similar-sized unit with an 800-square-river-view deck could have been bought at the same time at the nearby Corinthian Cove, a gated community, for $1.3 million.
The asking price on the Union Street unit was later reduced to $1.3 million. But as rumors of a bankrutpcy swirled in recent months, brokers become reluctant to show the property. The project was sold to G.S. Realty, a unit of Amboy National, for $1 last July.
A check of bankruptcy court records shows no such filing for the project.
The 26,000-square-foot retail and residential development was approved in early 2005 by the borough planning board over the strenuous objections of preservationists. They said the restaurant was a link to the earliest commercial district in Red Bank, having been home to a hotel and tavern dating back to the early 19th century.
But an architectural historian for the developer claimed that those historic ties had been severed by a 1960s fire that destroyed the structure anything.
Here are the indictment and the prosecutor’s press release: