Latest Sea Bright Mad Hatter rebuilding plan shot down; four builders eager to step in
The owner of the Mad Hatter in Sea Bright have been dealt a setback in its bid to redevelop the Superstorm Sandy-destroyed restaurant after the New Jersey Economic Development Authority rejected its plan and raised questions about the possible misuse of agency funds, according to court documents.
Sea Bright's mayor said the town will continue to review plans by four other developers that have submitted bids to take over the project, while it waits for the case to be resolved in court.
"We're on the same course as before," Sea Bright Mayor Brian Kelly said. "Our goal at least for the past year has been have the Mad Hatter folks finish rebuilding their building, or as we've done recently, get bids for somebody else to complete the project. That's really in simplistic terms where we are now."
The Mad Hatter is a landmark pizza place and bar in Sea Bright that was destroyed by Superstorm Sandy 11 years ago. Its recovery is viewed as one of the final pieces in the Jersey Shore's recovery from the storm.
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The restaurant has been owned by Kelly Management Group since 2006. After the storm, the company planned to demolish the building and replace it with a three-story 15,000-square-foot restaurant. It received a multimillion disaster loan from the New Jersey EDA in January 2016, according to court filings, and began to rebuild.
Kelly Management Group said in court papers that it ran out of money in late 2018, bringing construction to a halt. And the building has stood as a shell, waiting either for the owners to find new financing or for the borough to take it over and find a replacement.
It looked as though Kelly Management Group this summer found a new lender, SnowPoint Capital Management LLC, a Ridgewood-based company that specializes in short-term investments. But the deal required creditors — the EDA and Kelly Management's general contractor, Longview Construction Management — to sign off on it, according to court documents.
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In court papers, Paul V. Fernicola, Kelly Management's lawyer, told state Superior Court Judge Andrea I. Marshall that Longview agreed to the plan. But he said he received a letter from the EDA dated Oct. 17, saying the agency would not consider the request "due to a possible misuse of funds."
Fernicola said the agency found a discrepancy regarding how much Kelly Management paid Longview. One document, dated Nov. 18, 2019, said Longview was paid some $3.98 million. Another document, dated Dec. 11, 2020, said Longview had been paid about $2.47 million, according to a court filing.
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Fernicola withdrew his motion for the court's approval of Kelly Management's rehabilitation plan with the right to re-file in the future. And he asked for a conference, scheduled for Dec. 8, with the judge and the other parties to discuss the issues raised by the EDA's letter.
Fernicola didn't respond to requests for comment. Longview's attorney, Jonathan Bondy, didn't return a call seeking comment.
Brian Kelly, who isn't related to the Kelly Management owners, said of the latest development: "The town is reviewing the bids that came in from the recent RFP that was completed in August. And aside from that (the town is) just following legal processes."
Michael L. Diamond is a business reporter who has been writing about the New Jersey economy and health care industry for more than 20 years. He can be reached at mdiamond@gannettnj.com.
This article originally appeared on Asbury Park Press: Sea Bright Mad Hatter building plan shot down. Will new builder arise?
