Grandville Towers neighbors look on as resident Mary Cook, below, questions PRC vice president Tom Arnone, left. (Photo by Sarah Klepner. Click to enlarge)
By SARAH KLEPNER
The Red Bank Rent Leveling Board wrapped up testimony and public comment on a plan for upgrades and higher rents at Grandville Towers Thursday night, but held off on making a decision before next month.
Building manager PRC Group is seeking permission to impose rent surcharges to recover the costs of a proposed $3.6 million rehabilitation-and-upgrade project that has tenants fearing sharp increases.
Most of the board’s questions the special meeting Thursday night came from member Nicola Bowers, who had toured the building and wanted to know why existing facilities were being replaced.
“Why would you want to surcharge tenants for things that are there today?,” she asked. “You’re taking existing storage space to add apartments.”
“I saw a plaque on a door that said ‘community room’ with a dryer being stored inside,” she said. “I’m trying to understand why you don’t fix up existing facilities.”
Bowers also noted that she had not received the current floor plan for the first floor, as she had requested of PRC.
The meeting was attended by about 10 residents. One, Jane Manning, asked, “If five new apartments weren’t being constructed, would there be a need for $700,000 worth of outside structures?”
Board attorney Gene Anthony explained that the board is not charged with assessing the plan itself, only whether the work can be considered a capital improvement, one of two conditions under which a landlord can increase rent beyond the two-percent cap imposed through the borough’s rent control policy; the other is hardship.
The IRS defines capital improvements as work done which has a lifetime of five years or more, he said.
Resident Jim Kowaleska wanted to know if PRC has plans to convert the building to condominiums.
“The intent was to proceed with condo conversion when the plan was approved by the zoning board eight years ago,” said PRC attorney Peter Wersinger, but “it’s not the intention now.”
Anthony reminded the board and residents that “it doesn’t matter to this board why [PRC] drew up these plans initially, only that they were approved.”
“The surcharges are according to the lifetime of the improvements – in some cases spread out over 27 years, some 15, a few seven and very few five,” Wersinger said. “If someone is paying, in theory it should be exactly the cost attributable for their use of the facility for that time.”
At the conclusion of testimony and public comment, Anthony said the board will go through PRC’s proposal line by line to decide whether each item is a capital improvement.
For work that is approved, the board will retain oversight throughout the three stages of the project to ensure that the apportionment process – distributing the costs to residents according to the actual pricing and lifetime of the improvements – is correctly handled.
Because the project has not yet been put out to bid, PRC is using price estimates to approximate the rent surcharges that would be necessary, company representatives said.
The next scheduled meeting of the Rent Leveling Board is June 27 at 7:30 p.m.
