FOR DOWNTOWN SELLER, TOO-EASY MONEY

25broadSold, for more than the seller ever dreamed: 25 Broad Street.

Stuart Paer’s request to the Red Bank Planning Board on Monday night went through like lightning.

He was asking for a change of use for the second-floor space in a building he owns at 25 Broad Street. Long utilized as an office, it at one time served as an art gallery owned by Lloyd Garrison, and is now used as an office again. The board granted the request. The whole thing took about five minutes.

And just like that, Paer cleared the last hurdle that will enable him to sell the building, and another one he owns at 19 West Front Street, to a Brooklyn-based buyer for $3.2 milion.

What does it mean for downtown? We’re not sure. But when a seller boasts, before a closing, that he’s getting more for a building than it’s worth, it just might be a sign of an overheating market.

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HOVNANIAN: NOT YET THAT SUNK

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Today’s Star-Ledger takes a look at the “dismal” year that Red Bank-based Hovnanian Enterprises has had. And the coming year doesn’t look at lot brighter.

But to make that point, the page-one story kicks off with an an anecdote that appears to confuse, or perhaps conflate, members of the Hovnanian family:

The Hovnanians have been building homes in New Jersey for almost a half-century, but the measure of their success was never more indelibly stamped than in a 1992 mishap, when the family’s 123-foot yacht sank off Cape May.

Outfitted with teak paneling, gold-plated fixtures and other luxuries, the $10 million sport-fishing boat seemed more worthy of an oil sheik than crafters of humble condos.

In the years since, Hovnanian Enterprises has grown into the nation’s sixth-largest homebuilder, snapping up smaller businesses and expanding into a total of 19 states. Riding the great housing boom of the past decade, the company built developments as fast as it could, with homebuyers queuing up overnight to sign sales contracts like groupies camping out for Hannah Montana tickets.

The credit crunch and a glut of unsold homes has put an end to those glory days, however. And this time, it’s the Red Bank company itself that’s taking on water.

But the yacht belonged to Hirair Hovnanian, a brother of the man who founded and controlled Hovnanian Enterprises.

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HOVNANIAN: LOSS QUADRUPLED IN 4Q

Hov_hq_81206File photo of Hovnanian’s Red Bank HQ, as seen from the foot of Maple Avenue.

Amid a widespread credit shutdown, Hovnanian Enterprises said its fourth-quarter net loss quadrupled over year-ago results.

The Red Bank-based homebuilding company yesterday reported a net loss of $469 million in the quarter, compared to $118 million in the fourth quarter of 2006. Contract cancellations rose to 40 percent, from 35 percent in the third quarter. Revenue for the year was down more than 22 percent, to $4.58 billion, from $5.9 billion in fiscal 2006.

As a result, the company said it won’t pay a dividend this year on a class of preferred shares.

Still, the company saw a glimmer of better days to come after the fiscal quarter ended.

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NY POST: GOOCH ON RUDY AND RICHES

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Today’s New York Post features a Q&A with Rumsonian Mickey Gooch, who among other things is a Wall Street billionaire, head New Jersey fundraiser for GOP presidential hopeful Rudy Giuliani and co-owner, with his wife Diane, of the Red Bank-based Two River Times.

In the interview, Gooch explains why so many Wall Street firms — but not his — have gotten hammered in the credit meltdown, how his boy Rudy’s doing in New Jersey, and whether he finds it “satisfying” to be a paper billionaire.

From the story:

Q: New Jersey has raised a lot of money for Rudy?

A: Rudy has raised more money in the state of New Jersey than any other candidate including the Democrats, and the only other state where he has achieved that is Texas.

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MIDDLETOWN BALKS ON REVAL

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An ebb tide of property values and glut of ‘for sale’ signs has Middletown officials thinking this might not be he best time for a revaluation, today’s Asbury Park Press reports.

Township officials have hired a taxation law expert to tell them if they have a case for asking the Monmouth County Board of Taxation for a reprieve on doing a reval that uses Oct. 1 as the reference date.

From the story:

“Our concern is that if the values are so off, the number of (tax) appeals will be very high,” Middletown Deputy Mayor Pamela Brightbill said.

Citing an “ever-increasing number of “for sale’ signs,” news that properties are not selling and a rising number of foreclosures, Brightbill said there has been growing concern that the updated property values will be inflated if the market continues downward.

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MERCHANTS: TIFFANY WILL HELP, NOT HURT

Img_8228A customer tries on a bracelet at an opening-night reception at Tiffany & Co.’s Broad Street store earlier this month.

The Asbury Park Press today pops in on store owners in downtown Red Bank to gauge their feelings about the recent arrival of Tiffany & Co., and finds the welcome mat is out.

In fact, writes business reporter David Willis, “other businesses in town have showered the store with flowers and gifts.”

“They have been dropping in to see the store,” said store manager Vicky Shortland. “Just very welcoming.”

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TIFFANY SET TO TWINKLE ON BROAD STREET

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Love it or loathe it, Tiffany & Co. arrives in Red Bank tomorrow with the opening of a 6,000-square-foot emporium of luxury that caps the downtown’s 17-year sprint from economic backwater to one of the most admired in all of New Jersey.

Select guests will be treated to tours of the new store today. The big brushed-metal doors open to the public tomorrow.

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HOV CONTRACTS FALL OFF ANOTHER CLIFF

Hov_hq_81206Hovnanian’s Red Bank HQ, as seen from the foot of Maple Avenue in sunnier days.

Red Bank-based Hovnanian Enterprises, one of America’s largest publicly traded homebuilders, got walloped again in its latest fiscal quarter.

Continuing a slide that company official haven’t been able to foresee the end of, Hovnanian reported that sales results “significantly deteriorated” in October from recent months, with new orders down and contract cancellations up steeply.

As reported by Reuters:

Hovnanian said preliminary results for the fiscal fourth-quarter ended October 31, showed that excluding unconsolidated joint ventures, net contracts fell 10 percent to 2,781 homes, while sales slid 19 percent to 3,969 homes.

Would-be buyers canceled contracts at a rate of 40 percent, as many found themselves unable to qualify for mortgages. The cancellation rate rose from 35 percent in the prior quarter as well as the year-earlier quarter.

In early September, the company reported stronger-than-expected sales activity as a result of steep markdowns and heavy promotions that in some cases cut hundreds of thousands of dollars from asking prices for new homes.

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PRESS: FOXTONS RUNS OUT OF GAS

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Its signs, and tiny cars, may have seemed ubiquitous. And the basic idea — transacting home sales at commission rates lower than those typically offered by real estate brokers — seemed like a winner.

But local upstart Foxtons is sputtering to a close, today’s Asbury Park Press reports.

The West Long Branch firm announced last night that it was done in by the sharp slowdown in the residential market and will lay off 350 of it’s 380 employees, the Press reports.

A bankruptcy filing remains a possibility, a company official told the newspaper.

From the story:

“The plain fact is that we have been battling against a real estate market that recently has turned into a sharp decline, and the company no longer has the liquidity to operate as a going concern,” said John D. Blomquist, Foxtons’ senior vice president and general counsel.

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HOV: WEEKEND PRICE CUTS MOVED UNITS

Slashing sticker prices and throwing in extra amenities, Hovnanian Enterprises reports that its weekend sales push on new housing units nationwide exceeded expectations.

Wall Street cheered the report, boosting the battered homebuilder’s stock price yesterday.

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From a report on Bloomberg.com:

The company had gross sales of 2,100 homes. More than 1,700 potential buyers signed contracts and 400 gave deposits, Red Bank, New Jersey-based Hovnanian said today in a statement. The sale began on Sept. 14 and ended yesterday. It has boosted the company’s shares almost 13 percent in the past two trading days.

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HOV PRICE-SLASHING ‘UNPRECEDENTED’

Today’s Star-Ledger reports that Red Bank-based homebuilding giant Hovnanian Enterprises is cutting prices and offering incentives worth up to $240,000 on unsold new homes, discounts that industry experts call unprecedented.

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From the story, by business reporter Joe Perone:

Just a few years ago, Hovnanian Enterprises held lotteries to sell new homes because demand for housing was white-picket-fence hot.

Now, with the residential real estate slump deepening by the month, the largest New Jersey-based homebuilder is holding a fire sale at developments across the country. Prices this weekend will be slashed by up to six figures — $100,000, $149,000, in some cases $240,000.

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ON DECK: A TRADER JOE’S AND A GARAGE?

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It is perhaps the single most contentious issue in Red Bank: whether the downtown needs a parking garage.

Merchants, in general, say yes. They complain that a shortage of street and lot parking is choking their businesses and undermining broader efforts to capitalize on the town’s sterling reputation as a cultural and shopping destination.

Building a garage that significantly increases the number of parking slots in the central business district is the best thing Red Bank could do to preserve its stature among New Jersey downtowns and stave off threats from Pier Village in Long Branch and other emerging marketplaces, proponents say.

But many residents say no way to a parking deck — not if they have to pay for it with higher property taxes.

Efforts by the Democrat-controlled council to convert the borough-owned White Street lot to a parking deck attracted large, angry crowds in 2001 and 2005. The latter attempt called for a 570-car, $11.8 million structure. Both times, the idea was shelved.

The solution, many agree, is some form of public-private deal in which a developer carries the financial risk and the town gets both revenue and more slots.

Finally, a plan along those lines may be in the works. And it involves a high-profile retailer that has done this sort of thing before elsewhere.

redbankgreen has learned that representatives of Trader Joe’s, a wildly popular chain of specialty food stores with affordable prices, met with borough officials two weeks ago to explore the possibility of building a store with a parking deck above it on the White Street lot.

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IT JUST KEEPS GETTING WORSE FOR HOV

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Already struggling against a tide of falling real estate values, Red Bank-based homebuilding giant Hovnanian Enterprises is now, like others in its industry, fighting a rip current brought on by the collapse of the subprime mortgage market.

The company reported a sharp drop in revenue and a larger-than-expected net loss yesterday.

According to TheStreet.com, Hovnanian:

reported a loss of $80.5 million, or $1.27 a share, for the quarter ended July 31. That compared with earnings of $74.4 million, or $1.15 a share, a year earlier.

Analysts expected a loss of 99 cents a share for the recent quarter, according to Thomson Financial.

Revenue fell 27% to $1.1 billion, matching analyst estimates. New contracts dropped 24%, excluding those from joint ventures.

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TAX BILLS OPEN BILE DUCTS

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Tax bills reflecting the yet-to-be finalized 2007 municipal rate are landing in Red Bank mailboxes, and the annual rite of collective frustration they bring was amplified at last night’s council session by the impact of this year’s property revaluations.

Things got contentious at times during what turned out to be a butt-busting, three-hour-and-forty-minute meeting. Council members and taxpayers teed up “the system,” developers and one another at various points for their purported roles in making a bad situation worse.

“This is the gentrification of the West Side, and I am livid,” said freshman Councilwoman Grace Cangemi, who lives on Rector Place.

“Things are out of control,” she continued to redbankgreen after the meeting. “We have developers who own properties on the West Side who run them into the ground, and then build high-density housing on the site.” The effect, she said, is to push valuations of nearby properties through the roof.

“What do you do when you’re a senior citizen who gets hit with a $2,000 increase in taxes and you get a three-percent increase in your Social Security” cost-of-living adjustment, she asked.

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COMMUNITY CENTER BACKERS BRING IT

Linda_clarkLinda Clark makes the case for a town center.

The idea of creating a community center at a Red Bank-owned building on the West Side is one that “needs plenty more discussion,” children’s activist David Prown told a crowded Borough Council meeting last night.

Then he proceeded to introduce more than a dozen speakers — including social services providers, volunteers and average Joe residents — who made the case for creating such a center, whether or not it is based in the soon-to-be vacated building at the corner of Drs. Parker Boulevard and Bridge Avenue.

Some invoked the specter of the recent triple homicide in Newark as a warning of what can happen when kids don’t have the kinds of services that a community center can provide.

A woman who volunteers with the Pop Warner football program lamented an absence of activities to engage boys after the season ends. Several speakers said they favored moving the the Parks & Rec Department to the site from its current offices in a trailer on Chestnut Street to boost program visibility and participation, while others envisioned it as a a clearinghouse of sorts for referrals for everything from healthcare to jobseeking.

What was unmistakable in it all was a sense of a void.

“There’s never that one central location where we can all grow,” Linda Clark, of River Street, told the council. “Even if this is not the one, I think we have a lot of people behind you guys to find that one location.”

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‘ABSURD’ MINIMUM DRAWS NO BIDS

AuctionpicThe big money stayed home.

Once again, Red Bank’s efforts to auction off a borough-owned building at the corner of Drs. Parker Boulevard and Bridge Avenue have failed.

At a scheduled auction this afternoon, nobody bid. The same thing happened in April, the last time the borough tried to auction the structure, soon to be the ex-home of the Count Basie Learning Center.

The problem? The minimum $800,000 bid set by the borough council.

“I’d be interested in bidding, but not at $800,000,” said architect Michael Simpson. “Eight-hundred-thousand is an absurd number.”

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KARA HOMES OWNER TARGETS ‘HENCHMEN’

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Zuhdi Karagjozi, the Rumson man who founded Kara Homes, claims in court papers that the bankrupt homebuilder’s chief restructuring officer and “his henchmen” are poised to cheat him, according to a story on the Asbury Park Press website.

From the story:

Karagjozi in court papers filed Wednesday said Perry Mandarino, Kara’s chief restructuring officer, rejected investors Karagjozi lined up in the past two weeks that would have offered a higher dividend to unsecured creditors.

Instead, Mandarino stuck with two investors — Glen Fishman and Plainfield Specialty Holdings II Inc. — who plan to work closely with Mandarino’s company, Traxi LLC., Karagjozi said.

“The only way the unsecured creditors and I can be cheated out of what is rightfully ours is if this Court allows Mandarino and his henchmen to ram through the proposed plan without giving me and the members of the committee of unsecured creditors who voted against Mandarino’s plan a reasonable period of time to bring in an alternative proposal,” the court documents say.

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MARRY US, RED BANK!

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Tom Labetti and Eileen (nee Weller) Labetti of Elm Place got married recently at St. James Church on Broad Street.

The red-haired bride beamed magnificently, the wedding party looked youthful and happy, and the newlyweds headed off for their reception in a classic red Corvette.

A perfectly nice affair, to be sure, but not exactly the kind of thing that usually merits media attention beyond the wedddings & engagement page in a local paper.

Except that redbankgreen is hyperlocal media, and the Labettis are a hyperlocal pair — in one significant sense, at least. They wanted their wedding to reflect not only their tastes, but their values. Which in this case meant that they were determined to keep as much of the money they’d be spending on their wedding in Red Bank.

They didn’t want it spread among the malls, Manhattan’s diamond district and some unbelievable-discount-on-Vera Wang-outlet in Brooklyn. They preferred that it land in the cash registers of the stores not far from their house. Thousands of dollars.

Now that’s what we call a civil union.

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DIG DEEP IF YOU’RE BUYING IN MONMOUTH

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The median price of all new single-family homes built in Monmouth County last year was $810,000, more than 3.5 times the national median of $230,000, according to a new report from the county Planning Board.

Typical size: 3,875 square feet, on three-quarters of an acre of land.

Cheapest available from a developer: $400,000, at Laurel Estates in Hazlet.

And if that’s your price point, you’d better move fast. The county divides all new homes into five price clusters, from low to high, and prices in the lowest range jumped a whopping 25 percent from 2005, while all of the other categories posted single-digit increases.

Since 2000, prices for the cheapest homes have soared by 212 percent, twice as fast as in the top price tier. We’re not talking shoeboxes, though. Even in the lowest price category, homes sizes ranged from 2,401 to 4,400 square feet.

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LITTLE SILVER SPELLER TO REST A SPELL

Fourteen-year-old Little Silver resident Robert Hale, who made it to the fourth round of the 2007 Scripps National Spelling Bee before tripping up yesterday, is a bit relieved to now have that dictionary off his back, today’s Asbury Park Press reports.

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“I’m looking forward to not have a burden on my shoulders,” the Markham Place School eighth-grader told the paper, which sponsored his appearance. “I’m glad it’s over. It’s been stressful these past couple of months.”

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LAST-MINUTE BRICK THROWN INTO PLAN

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By LINDA G. RASTELLI
When you’re redoing a downtown, as rookie Fair Haven Mayor Mike Halfacre is discovering, you can’t please everyone.

Exhibit A: the borough’s streetscape plan, which calls for the sidewalks from Memorial Park to Oak Place to be redone in white concrete stamped with a herringbone pattern, and for the installation of faux Victorian light fixtures. River Road in the vicinity of Fair Haven Road will be repaved.

Everyone agrees the sidewalks need replacing “They’re in terrible condition,” says Halfacre, “like downtown Beirut in some places.”

But now, at the eleventh hour, some business owners are pushing for brick instead of concrete. On Monday night, hours after construction on the job is scheduled to start, they plan to ask the Borough Council to allow them to opt out of the concrete solution, at their own expense.

It could be a tough sell. If construction is delayed by plan changes, finishing the work for Memorial Day weekend as other merchants insist may not be possible. Retailers are still smarting over the 2005 reconstruction of the bridge over Fourth Creek, just a few hundred feet west of the intersection, which all but shut off downtown traffic for months.

“The business owners are very sensitive about traffic flow,” says Halfacre. “They’re afraid [if construction impedes access again] their customers won’t come back this time.”

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CAN STATE TREASURER PACK OUR HOUSE?

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New Jersey Treasurer Bradley Abelow is scheduled to lead a forum at Red Bank Borough Hall Wednesday night in which he’ll discuss the impact of the proposed $33.3 billion state budget for fiscal ’08 on municipalities.

In announcing the event a week ago at a council meeting, Mayor Pasquale Menna characterized the session as a “town forum.” He said the office of Acting Gov. Dick Codey had asked that Red Bank host the event.

Little old Red Bank? Councilman John Curley wondered if the council chambers, which seats 60, would be large enough to accomodate members of the public interested in attending.

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HOVNANIAN: WE’VE SEEN WORSE

Both the Asbury Park Press and the Record of Hackensack have interviews today with Ara Hovnanian, scion and CEO of Hovnanian Enterprises, the Fortune 500 homebuilder headquartered in Red Bank.

On the table in each is the state of the real estate market and the outlook for a turnaround at HOV, which has posted two consecutive quarters of losses and forecasts a third.

From the Press interview, conducted by business writer David P. Willis:

“We’ve seen and weathered and experienced many housing market slowdowns and this is yet one more notch in our quiver of experiences,” [Hovnanian] said. “And it is not uncommon and not to be unexpected to have periods where our profitability not only is less, but in some cases like the last two quarters, where we have the losses.”

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HOVNANIAN ABANDONS MONEY PIT

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Red Bank-based K. Hovnanian Homes has pulled the plug on a controversial plan to build up to 4,500 homes in Ocean County’s Berkeley Township after an adverse court ruling.

“We are not going to pursue this,” company spokesman Douglas Fenichel told the Asbury Park Press.

“I don’t have to tell you the market has changed,” Fenichel said. “It was as much a market decision as anything.”

The decision comes two months after a state Superior Court in Ocean county rejected Hovnanian’s claim in a lawsuit that Berkeley wasn’t providing its fair share of affordable housing. The company wanted to force the town to rezone more than 800 acres at the New Jersey Pulverizing gravel pits to allow for development.

“It’s a tremendous boost to the township’s efforts to control sprawl,” Berkeley Mayor Jason J. Varano said of the company’s decision, according to the Press.

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BAUER HEADED INTO PORT

Virginia S. ‘Ginny’ Bauer, New Jersey’s Secretary of Commerce and the widow of a man killed in the Sept. 11, 2001 attacks on the World Trade Center, is Gov. Jon Corzine’s choice to fill a seat on the board of the powerful Port Authority of New York and New Jersey, the Star-Ledger is reporting.

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The Red Bank resident, then living in Rumson, vaulted into the public eye by helping secure tax benefits for the families of attack victims in the weeks immediately following the attacks. Nearly two years later, she was picked by then-Gov. Jim McGreevey to head the state lottery. A year ago, she moved to the commerce department at Corzine’s request.

Since the attacks, the Ledger says,

she has become a leading advocate for families of 9/11 victims and has been actively involved in the redevelopment plan for the site, which the Port Authority owns.

Bauer would be the first 9/11 widow from New Jersey to serve on the Port Authority’s board.

Corzine called her the “perfect choice” to fill one of the state’s six seats on the 12-member board that oversees operations of the financially self-sufficient public agency.

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