By JOHN T. WARD
Thursday’s meeting of the Red Bank rent leveling board included a sharp disagreement over whether capital improvements to an apartment building’s pool enhanced the property’s value.
Steven Kaye, an executive at PRC Group, which owns Grandville Towers, insisted repeatedly that upgrades made seven years ago to the building’s pool added no value to the property, because “they already had a pool there.”
Board attorney Gene Anthony was clearly incredulous at Kaye’s assertion.
“The property also had a building at all times,” and PRC won approval for rent surcharges on capital improvements made to it in 2013, said Anthony.
“Ninety-nine percent of capital improvements on apartment complexes involve something that was there before,” he said
At issue in the Zoom-held hearing were demands for rent reductions by tenants at the 10-story rent-controlled building on Morford Place.
They claimed they’ve been denied use of the pool and gym throughout the COVID-19 pandemic, and should see a commensurate cut in their rent.
PRC, represented by attorney Chris Healy, contends that COVID-19 restrictions imposed by Governor Phil Murphy accounted for the pool shutdown through June, as well as the closure of the gym, which continues.
But since Trenton issued new guidance on pools July 1, the landlord has been unable to find and hire lifeguards and individuals to serve as pool “ambassadors,” Kaye said. The second job involves checking-in pool users as well as cleaning toilets, he said.
Staffing was “probably our biggest obstacle” to reopening the pool, Kaye said. “We’ve been advertising for a cleaning person for a long time. We just weren’t able to hire the staffing to satisfy the governor’s order.”
The building had two COVID-19 cases early in the pandemic, the borough’s first, and PRC spent $25,000 on a biohazard cleanup of the site as a result, Kaye said.
A hearing on the issue began at the board’s monthly session in July, based on rent-reduction demands filed with the board by 10 tenants. That number was cut in half by the end of Thursday’s meeting, the rest having dropped out.
Among those pursuing the claim was Yvonne MacDonald, a seven-year tenant who said she was a regular user of the pool and gym.
“I just feel we’re paying all these surcharges for all these amenities,” she told the board. “If we’re not using them, then we shouldn’t be surcharged for them.”
Hugh Magee, a real estate consultant from Rumson, testified for PRC that he conducted an analysis of apartment amenities throughout Red Bank. Among his findings: that Grandville Towers is the only one with a pool, and that on a square-foot basis, its rents are sharply lower than elsewhere, even without taking the pool and gym into account.
A typical tenant in the building pays $1.10 per square foot a month, he said. The next-lowest rent in town among the 12 complexes he reviewed was at the Colony House, on Bodman Place, where the average was $1.56 per square foot.
Magee said it is “disingenuous” of tenants to seek a rent rebate. The pool “has a limited value,” but that amenity “should not be held hostage on a rent reduction when already there is superior value” in the rent.
In addition, he said, PRC had not “thrown out” any tenants who lost their jobs in the pandemic and had trouble making the rent, he said.
Anthony, however, said the current stage of the hearing is about answering one question, under the rent ordinance: “was there a service reflected in the rent, and was that service reduced?”
If so, questions of what the service was worth, and whether a rent cut is appropriate, should follow, he said. The effect of the pandemic could be a “mitigating factor,” he said.
The hearing is expected to continue at the September 24 meeting.
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