Oceanport braces for state's high-stakes gamble to allow condos & hotel at Monmouth Park
OCEANPORT – The stage is set for a showdown this week between a town already bracing for change with the Fort Monmouth/Netflix redevelopment plan moving forward, and a thoroughbred racing industry seeking long-term survival through a massive development deal on the 255 acres that includes Monmouth Park.
A Monmouth Park official says a plan to build 350 units of 55-and-up rental housing and a 200-room hotel with a recreation area featuring pickle ball courts will be presented publicly for the first time Thursday at the Oceanport Borough Council meeting.
The New Jersey Thoroughbred Horsemen’s Association, which leases the track from the New Jersey Sports and Exposition Authority, wants to partner with New York City developer Morris Bailey, owner of Resorts Casino in Atlantic City, on the project, according to Dennis Drazin, chairman and CEO of Darby Development, which operates the track for the NJTHA.
Bailey had been involved in a previous development proposal that never moved forward.
“Morris is still gung ho to proceed and the Sports Authority is fully supportive,” Drazin said.
Also this week, Monnmouth Park is hosting its showcase race, the $1 million Haskell Stakes, with track officials hopeful that Kentucky Derby winner Mage will be in the field. The race on Saturday will be broadcast by NBC.
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Oceanport officials have little say in development or operations at Monmouth Park since it’s on state-owned land but Mayor Jay Coffey said he expects quite a few people to be at the Thursday council meeting, and that it likely won’t be the only public presentation.
Coffey said both the town planner and attorney reviewed the plan on Friday and will make comments at Thursday’s meeting.
“The current proposal is a rather comprehensive one and, as such, merits extensive review and consideration by the Borough Council, the Planning Board and the general public as to whether or not it is consistent with our Master Plan and the character and nature of existing development within the Borough of Oceanport. We are looking forward to Thursday’s initial presentation,” Coffey said.
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And while the expectation is that the project will provide a long-term revenue stream for the NJTHA, the group owed Darby Development nearly $60 million at the end of 2021 according to tax records reviewed by the Asbury Park Press. That money has been accruing since the horsemen began leasing the track in 2012 when the state privatized its racetracks, and Drazin formed Darby to operate the track for the horsement and develop the property.
“We have to take a look at what is owed by the NJTHA and make a determination about how that is going to be handled,” Drazin said.
“My objective is to be to get purse money out of the cashflow from the Morris deal to either increase purses or add racing days - figure out something that is good for Monmouth. The money owed to Darby is secondary.”
What is clear is that there’s a lot at stake as the project tries to move forward.
Big bucks in play
The Monmouth Park development could add to an already important revenue stream for Oceanport if the property value of the track rises due the project. The state does not pay taxes to the borough, but it makes an annual payment, the amount of which is derived much the same way, by taking the value of the track property and multiplying it against the borough’s tax rate. Coffey said this year that worked out to roughly $1.6 million.
And that would be in addition to the potential financial benefits from the fort development - Netflix, expected to invest around $850 million, is under contract to purchase the roughly 300-acre Mega Parcel at Fort Monmouth, in Oceanport and Eatontown, for $55 million, with plans to build 12 sound studios plus auxiliary buildings to support movie production work.
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Netflix is currently doing its due diligence on the property, and it could take another two years before Netflix even closes on the property. However, its presence has already begun to impact area real estate values and Netflix has been reaching out to the local chambers of commerce. It’s expected that Netflix will become an economic driver for the region and create demand for other businesses all the way down to the local pizza shops.
While a hotel would seem to fit potential lodging needs Netflix could create for the area, a Netflix spokesperson on the studio project did not provide comment when asked about any conversations the streaming giant may have had with the track.
Michael Abboud, a principal of Fort Monmouth Business Center, LLC, is turning the fort’s historic Allison Hall building on Parker’s Creek into a boutique hotel. Abboud’s project was approved before Netflix was even on the radar. He told the Asbury Park Press last month that while Netflix will help occupancy rates for the hotels and restaurants in the market their analysis of the market identified the demand for additional hotels to stabilize prices and room availability prior to the Netflix announcement.
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Coffey said the New Jersey Sports & Exhibition Authority provided the borough with the proposed site plan for the mixed-use project on portions of the Monmouth Park property on June 27, with Thursday looming as the first public look at the plans.
And when all the details are finally placed under a bright light and examined, the real battle is expected to begin.
Who benefits?
It’s not the first attempt to develop Monmouth Park. In the original $100 million redevelopment plan floated by Darby in 2012, ideas like an indoor waterpark, retail space, restaurants and a movie theater were on the drawing board.
There was a hope that a casino eventually come to the property, but those dreams were dashed by a 2016 referendum barring any casino within 72 miles of Atlantic City, with Oceanport 67 miles away. There were even discussions about a 7,500-seat concert venue at one point.
It was all in an effort to compete with racetracks in neighboring states that receive state subsidies from associated casino operations.
But will the deal add purse money and racing days?
In 2022, Monmouth Park raced 60 days, distributing around $32 million in purse money. This year, however, there will be just 51 days of racing.
Much of the NJTHA’s debt to Darby, which totaled $59.17 million at the end of 2021, traces to Darby receiving an incentive fee equal to 80 percent of the NJTHA’s net operating profits from account wagering and off-track wagering facilities in Woodbridge and Hillsborough, as stipulated in the 2012 operating agreement. The agreement stating no monies could be taken by Darby until the $9 million in loans the NJSEA made to the NJTHA, which Darby guaranteed, were paid off, which happens in early 2024.
Drazin, a former chairman of the state Racing Commission, is a Drazin & Warshaw law firm partner along with his brothers, Ronald and Brian, who are listed as managing members in Darby Development.
Monmouth Park has received a $10 million annual purse subsidy from Trenton lawmakers since 2019. The addition of a sports book in 2018 has provided the track with around $6 to $7 million in annual revenue, while wagering on the track’s races brings in about $15 million, according to Drazin.
“There could be a Phase 2 and 3 but that is undecided at this point,” Drazin said. “There could be a second hotel that would also support the workers (from Fort Monmouth redevelopment)."
If you go
The Oceanport mayor and council will have a workshop meeting Thursday at 7 p.m., followed by a regular meeting, at the Sommers Municipal Building, 910 Oceanport Way, 07757.
This article originally appeared on Asbury Park Press: Jersey Shore 2023 new senior homes, hotel for Monmouth Park, Oceanport?
