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Township residents packed the Council chambers on October 12 for the chance to give the Levin Management Company their thoughts on the plan to turn the former Kmart building in Rutgers Plaza into a four-story apartment building.

Those thoughts were not positive.

Levin wants to replace the more than 100,000-square-foot building with a modern, four-story apartment building housing 200 units. The unit breakdown would be 69 one-bedroom, 123 two-bedroom and eight three-bedroom apartments, with 40 units set aside for low- and moderate-income families.

The building would feature amenities such as a swimming pool, fitness center and a courtyard. The first floor would be retail.

Levin originally applied to the Zoning Board of Adjustment for approval of the plan, but when it became apparent that the Township Council was against it, the application was withdrawn and Levin requested an “informal” meeting with the Planning Board to discuss a zoning change for the area.

But at the end of the nearly two-hour meeting, it wasn’t clear what would happen next.

The Planning Board cannot undertake a zoning change review on its own, that request has to come from the Township Council. But the Council has gone to the extraordinary step of authorizing township attorney Lou Rainone to appear before the Zoning Board when Levin’s application is heard to tell the Board that the Council considers the application an abrogation of the Council’s right to determine zoning in the township.

So the ball is in the Council’s court.

The residents sat through 80 minutes of Levin’s principals and hired experts telling the Planning Board that they tried but could not attract any retail business to take over the building that Kmart abandoned in July 2018.

“Since 2018, we just have not found any demand for this location … for any anchors or junior anchors,” Sidney Singer, vice president of Levin Management, told the Board.

“We are committed to retail at Rutgers Plaza, but we need another anchor to support that. We cannot continue to have a vacant 100,000 square foot obsolete building that’s not leasable,” he said. “Our proposed redevelopment is an appropriate transformation of an over-struggling retail center to a modernized mixed-use development.”

Roberta Hamer, a representative from Stop and Shop, Rutgers Plaza’s anchor store, told the Board that the planned apartment building “would bring a great variety of foot traffic to the shopping center and would bring life to what is now a very dead end of the property. It is becoming what we consider to be an eyesore.”

“Our entire industry has changed because of e-commerce and the Amazons of the world,” she said. “As our industry changes, we have to be a little bit more open to the idea of change and embrace the change.”

Hamer said the old Kmart building remaining vacant “could impact our business overall and change our mind about staying in the shopping center.”

Another Rutgers Plaza tenant, Peter Stavrianidis, owner of Venus Jewelers, said that the plaza “is one of those shopping centers that needs this enhancement desperately. The landlord of Rutgers Plaza has done everything possible to revitalize this retail space.”

“A lot of attempts have been made by the landlord to create an environment for a large store to come in,” he said. “If nothing takes place and everything remains the same, this shopping center will decline and will cease to exist.”

A commercial appraiser told the Board that if action is not taken now, the center may not survive.

“If the Board and the town do not get proactive about a proposal like this here today, in the next … 5 years or 10 years, you’re going to be hearing a proposal for the whole center,” Christopher Otteau, of the Otteau Group, said. “The idea that this is going to remain a retail and remain successful … it’s just not gonna happen.”

“The only way to save retail is to inject more households within a close walking distance,” he said.

The apartment building would be built and managed by Highland Park-based Kaplan Companies. The company’s president, Jason Kaplan, said he’s excited about the project.

“This excited us because of the mixed-use nature,” he said. “We just saw a great opportunity at a great location. We know that while retail isn’t in high demand, residential is in high demand.”

Kate Keller, a Hoboken-based planner, told the Board that worries about other developers maybe wanting to change their zones from General Business to residential so they, too could replace failing retail centers with residences are misplaced.

“Changing the use of this property (for the project) would not compromise the entirety of the GB zone,” she said. “There are a number of mechanisms that can be put in place … in no way would a change of the zoning here result in this type of development being allowed in every single GB property throughout the township.”

Even with all of those assurances, members of the public who spoke showed they were not convinced.

“What I see is a very complete myopic view of our community,” Mark Merris said. “Repurposing this property is essential to help rebuild this community.”

“What we have here … is an increase in population density,” he said. “I didn’t move here to be urbanized in a suburban environment.”

Arnold Schmidt said he thought Levin let the property go “into disrepair” so as to make it less attractive to potential tenants.

“Levin wants us to believe that they can’t find tenants for the Kmart site because retail is dying, but on the other hand, the Wall Street Journal and Levin’s own CFO are saying that retail is doing better now than in many years,” he said. “You can’t have it both ways. Do your job Levin, give us what we need; retail where we need it. We need sites where we can buy clothing, home goods and other items.”

Dena Luchs was not convinced by Keller’s assertion that other retail site owners wouldn’t try to get their zones changed, too.

“I am truly concerned that if this Board or the Council accedes to Levin’s request, you will open the flood gates to other developers hoping to build high density rental properties on top of strip malls,” she said. “We need high-quality shopping in Franklin. Surely Levin has enough contacts to bring more retail to Franklin.”

Edward CArway, a former member of the Zoning Board of Adjustment, noted that because the application would need a number of variances – including a use variance to allow residential in the General Business zone – it did not belong before the Planning Board.

“I call it an end run,” he said. “An application should go to the place where an application belongs.”

The Franklin Reporter live streamed the meeting: