Plans to build a 135-room hotel and conference center near Atlantic City International Airport have fizzled — at least temporarily.
The South Jersey Transportation Authority has canceled its contract with Argus Real Estate Development LLC, a Ventnor-based firm awarded the work in 2009 following a proposal process and more than two years of negotiations.
The authority cited performance concerns, including the firm’s failure to obtain building permits within the three-year window in its contract, according to documents obtained by The Press of Atlantic City through an Open Public Records Act request.
Argus’ concept called for hotel rooms, extended-stay suites, 6,000 square feet of conference space, 22,000 square feet of retail space and a restaurant on a 13.5-acre site bordered by Tilton and Delilah roads in Egg Harbor Township.
“You are hereby notified that the authority immediately terminates the agreement in its entirety,” the SJTA’s attorneys state in an Aug. 9 letter to Argus Real Estate Development. “The authority also notifies Argus that it hereby reserves all of its rights to seek all available remedies relative to Argus’ neglect, failure to perform, and observe the terms, conditions or covenants of the agreement between the parties.”
The project would have been a first for Argus, a new firm that acquired its business certificate in 2007, two months before the hotel proposal was submitted to the SJTA. The local firm headed by five new partners beat out Michigan-based Acquest Development Inc., a firm specializing in hotel and conference center development and the developer of the Trenton Marriott at Lafayette Yard, for the the work. Acquest proposed building a 148-room Hilton Garden Inn and Conference Center at the Egg Harbor Township site.
Documents show the SJTA began sending letters to the firm noting concern over “the apparent lack of progress” in March. Formal responses from Argus were never received and the contract was canceled, according to the letters. The terms of the contract gave Argus’ firm until this month to obtain the permits, but the SJTA began sending the letters after two years and three months passed without progress.
Argus’ firm was expected to finance construction of the project originally slated to begin last year.
When asked about the contract cancellation, managing partner Lester Argus, who also owns the property management firm Argus Real Estate, said the project was simply in a holding pattern. He said the permits and financing were never obtained due to problems with traffic flow at the reconfigured Airport Circle and the SJTA’s plans for a direct connector road from the Atlantic City Expressway to the airport that would bypass the hotel and complicate access to the property.
“There’s no one that would build a hotel on that piece of property,” Argus said. “SJTA couldn’t do anything with that property, and neither could we.”
Argus Real Estate Development is run by five partners: Argus, certified public accountant Terrence Mooney, of Absecon, ophthamologist Brett Foxman, of Margate, attorney John Scott Abbott, of Margate, and dentist Alan Levine, of Chadds Ford, Pa., according to the firm’s hotel proposal. The firm does not have any other current projects, Argus said.
Kevin Rehmann, a spokesman for the SJTA, said he couldn’t address specific questions about why Argus was selected but said the firm was deemed the most responsible respondent at the time. The SJTA plans to start a new request for proposal process for a hotel in the future, but whether that proposal will be for the same site or a new one is yet to be seen.
“Whatever site we want the development on would have to be stated in the RFP,” Rehmann said. “The hotel is obviously something we need.”
The hotel plans were designed at a time when the nearby casino industry was flourishing and the airport saw an opportunity for growth. Aside from plans to garner additional carriers for the airport, which is currently served by a single carrier, Spirit Airlines, the planned NextGen Aviation Research and Technology Park appeared to be imminent.
The announcement of plans to build the hotel followed the announcement of the planned seven-building technology park located on the Federal Aviation Administration’s campus. By December 2010, a separate proposal for what was called the NextGen Aviation Center for Excellence at the Atlantic City Race Course in Hamilton Township was announced, also with a hotel and office space, but that plan was never developed.
Argus, however, said his firm’s plans were never dependent on business from the park, which has yet to break ground more than six years after it was announced.
One federal official said there’s a need for the SJTA’s hotel and conference center regardless of the timeline for developing the NextGen park.
Wilson Felder, the recently retired director of the FAA’s William J. Hughes Technical Center, named the project as one of the top priorities he’d like to see accomplished in an interview with The Press reflecting on his time at the center. Despite the fact that the contract for the project was awarded three years ago, Felder said the project remains in the early discussion stages with much community interest.
“It’s increasingly difficult for the FAA to hold conferences in gambling venues in Atlantic City. We’re constrained in what we can do,” Felder said. “What I’ve said is that it’s not our fault that we’re located here and those are our options. Getting a nearby conference facility in place would allow us to more easily do those things.”
The FAA owns the land used for Atlantic City International Airport and leases the space to the SJTA. The administration also owns the parcel where the hotel and conference center would have been located. The site already has clearance for a hotel from the New Jersey Pinelands Commission.
Contact Jennifer Bogdan:
Follow @ACPressJennifer on Twitter