2003-08-08 / Business
Laying the cornerstone of Red Bank’s redevelopment
By gloria stravelli
Merrill Lynch marked a milestone 25 years in Red Bank recently, celebrating a quarter century during which the firm’s decision to remain in Red Bank made it a cornerstone of the downtown revitalization.
"Their presence was a major trigger to the revitalization of the downtown. It was a statement of confidence — the fact that they were willing to take that kind of a risk," said Red Bank Mayor Edward J. McKenna Jr.
"To me that was a major statement about our ability to turn the town around and was something I had the ability to point to in dealing with other businesses," McKenna said. "It was an excellent result all around."
Currently one of the top offices in the Merrill Lynch system, it was the first national brokerage firm office in the town when it opened at 1 Harding Road in 1978. It began as a satellite of the firm’s Newark office but grew quickly, as a result of the area’s demographics, and became the southern regional office for Monmouth with affiliated offices in Spring Lake, Freehold and Toms River.
By the time Larry Roberts took over as regional vice president and manager of the office in 1989, it had moved to 3 Harding Road and was ranked 84th in the Merrill Lynch system.
When Roberts retired in January 2000, the office ranked in the top 20 and had moved to high-profile quarters at 77 Broad St. in 1992.
But by the late 1980s, downtown Red Bank was hurting as a result of a stubborn nationwide recession. The district had a vacancy rate hovering around 35 percent.
"All the other brokerage firms had left Red Bank," Roberts said. "At that time Red Bank had deteriorated. It was not a very attractive town."
Even the McDonald’s fast-food restaurant had moved out of its storefront in the downtown. The decline was so pervasive, Roberts said, he was close to following other brokerages out of town and voiced his frustration to Red Bank officials.
"I was infuriated that nobody seemed to care. I called the mayor and said, ‘I can’t believe that you don’t want to keep businesses. You lost everybody else in the security industry. We don’t want to move, but we can’t get help.
"It was a very crucial time for the borough. We had been in such a free fall, as far as the loss of downtown presence and important businesses closing or leaving town," said McKenna, who was about to take office when he heard from Roberts.
"I reached out to Larry [Roberts] and suggested we thought we could turn things around and shared with him our vision of a special improvement district," McKenna said. "It took some doing, but I said, on behalf of the town, I think we can try to resolve this."
McKenna sent Roberts a copy of the proposal for the creation of a special improvement district.
"It was just incredible. It showed me Red Bank was very aware of its resources, not just the river, but the surrounding demographics and what it could mean to Red Bank," said Roberts.
Roberts said he was willing to buy into the plan, but had several provisos: he wanted a high visibility location, close to 20,000 square feet of space, and dedicated parking for employees and clients.
He told McKenna, "If you can find a way, I’ll make that commitment and stay and get involved in your economic development effort.
"It was a good-sized risk at the time, but I thought it would work," Roberts said. "It was a solid business decision to stay here if we could make it work."
In short order, McKenna arranged a meeting with downtown property owner Jay Herman.
Among the vacant downtown buildings was the former Lerner Shops at the corner of Linden Place and Broad Street that prior to 1950 had housed the Strand Theater. The property had been acquired in the early 1980s by an investment group whose principals included Herman.
"They were on Harding Road with no exposure on Broad Street and I was making plans to develop the Lerner building and got wind of the fact that Merrill Lynch was looking for new space," said Herman.
In negotiations with Roberts, Herman was able to convince him that the building and an adjacent property that housed the Wilfred Beauty Academy and McDonald’s could be redeveloped to fit the brokerage firm’s needs, including on-site parking.
The two downtown properties were developed as Towne Center of Red Bank during the period 1989-92. Located at the commercial center of Broad Street, the design provided more than 30,000 square feet of Class A space devoted to mixed uses, plus off-street parking in an underground garage and adjacent lots.
According to Herman, principal in Downtown Investors, the design for the Merrill Lynch building merged the two separate buildings, one of which was a one-story structure and the other a two-story edifice.
To provide access to the underground garage, a two-story red brick building located behind Lerner Shops that once housed a barber and costume shop was demolished.
When Roberts said the firm needed more space than the building could provide, the group purchased the adjacent Wilfred Beauty Academy building on Broad Street.
"I was looking to market 8,000 square feet of building, and at first they didn’t want to talk to me," Herman said. "I said tell me what you need and I’ll go out and get it. They wanted 12,400 square feet. By the time they moved in, they took 16,000 square feet because their office was growing while we were negotiating the deal."
Herman said he had no trouble acquiring the additional property.
"In those days everyone in Red Bank was willing to sell," he said. "The town was a ghost town in 1989. When we were negotiating, this almost half of Broad Street was empty. Easily 35-40 percent of first floors were vacant, and close to 100 percent of upper stories were vacant."
Towne Center of Red Bank, which was conceived and constructed during the period from 1989-92, proved to be the first step in the renaissance of the downtown.
The design, by Ned Gaunt of Kaplan Gaunt DeSantis, merged the two buildings, and two separate basements were joined to provide underground parking.
"I think that building sparked the renewal and renaissance of Red Bank," Herman said. "When I bought the Lerner property I didn’t buy it because I liked what it was. I bought it because I thought there was potential in the town."
The timing of the special improvement district and the formation of Red Bank RiverCenter to manage the downtown helped bolster Herman’s case.
"We had to do a lot of convincing, and the negotiations took a long time," he said. "The formation of RiverCenter was happening at the same time and we used that [in] convincing Merrill Lynch that good things were coming."
The rest, Roberts said, is history.
"It was a real home run for us and for Red Bank. We continued to grow and became a real anchor for the redevelopment of the downtown. It really is what started it."