No more 'Dead Bank': Downtown Red Bank rescued itself, but can there be too much success?

RED BANK - In 1994, when Ingeborg Perndorfer, founder of The Language School on Broad Street, was looking to fix her building’s façade, which was “ruined” by a dated 1950s design, she was approached by a newly formed organization called the RiverCenter.

It was giving out grants to building owners to fix up their façades under the condition that its own architects draw up new plans to encourage a universal look for the downtown, looking to pull in shoppers who might have grown bored with shopping malls.

Perndorfer, an Austrian native who spent more time reading about Europe than Red Bank, said she didn’t know what the nonprofit was until she was approached. But she liked the plans and the stipend of about $6,000.

While the top of her building with its arched brick detailing was nice and historic, the bottom was marred by out-of-place tacked-on aluminum.

“They were supposed to be modern,” Perndorfer said, “(but) they were just ugly.”

The borough's downtown came to life after a collection of business owners, landlords and residents banded together to beautify and promote the downtown district. And it worked, improving property values for many, to the point that homes in town that 30 years sold for an average of what would be about $300,000 in today's inflation-adjusted dollars now sell for over $650,000.

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'Dead Bank' and potential

Red Bank in the 1800s was a commercial and manufacturing hub connecting ships from the Navesink River to trains running to New York. It became the center of commerce for the surrounding community. In 1928, the Red Bank Chamber of Commerce was born.

But commerce grew beyond the borough. With the opening of enclosed shopping centers in the 1970s and '80s including nearby Monmouth Mall, and white flight into the suburbs, Red Bank's once-vibrant downtown plunged into a downturn. The Red Bank Chamber of Commerce became the Eastern Monmouth Area Chamber of Commerce in 1995, covering a much larger area.

When the RiverCenter was first formed in 1991, there was a 35% vacancy rate in downtown stores, according to current RiverCenter Executive Director Bob Zuckerman. That led to the depreciation of property values in both the residential and commercial districts.

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Some stores were simply empty. Others were boarded up. The value of commercial property was so low that Perndorfer, who started her business in 1982, was able to buy the building where she had been renting rooms for her school in 1992. According to Monmouth County Property Records, the building was assessed at $470,000 in 1992. It is currently assessed at $1.9 million.

“We had a McDonald’s go out of business,” former Mayor Ed McKenna said. “When I ran for mayor, we were called 'Dead Bank.'”

The RiverCenter was founded to address the borough’s high vacancy rate.

To make the borough come alive, “You had to make it exciting,” said McKenna, who was elected to the Borough Council in 1986 and mayor in 1990.

Kerry Zukus, then in his late 20s, was used to shifting with the times. The Berklee College of Music graduate from Frackville, Pennsylvania, moved to Red Bank in 1984 as an optician and opened his store, Zukus One Stop Eye Care.

“I thought it was a cute town, certainly better than Frackville, which was totally falling apart,” he said. “But, still it’s the kind of place where you look and you just think potential, potential, potential.”

The potential came from its location. As the historic downtown core of its surrounding communities, it is a thoroughfare for residents of the wealthy nearby towns of Rumson, Little Silver, Fair Haven and Middletown, and it's also home to an NJ Transit train station for commuters heading north.

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“You've got a lot of people with money who are passing through Red Bank, and if you could get them to stop and park and get out and go in the stores, you can make a lot of money, but it wasn’t happening,” said Zukus, who was elected to the Borough Council in 1989. “There was just a lack of organization.”

One year, as a member of the Red Bank Area Chamber of Commerce, Zukus walked up and down the borough asking businesses to donate money for downtown Christmas lights. That year, the number of voluntary donations was so low, the borough couldn’t put up any Christmas lights.

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Special improvement district

In 1984, New Jersey passed a special improvement district law, specifically to address the lack of cohesion among businesses in downtown areas. Red Bank at the time was one of many municipalities that saw businesses flock to the suburbs.

Essentially, the district would be governed by a board of local business owners, landlords and residents who could levy an assessment on businesses in the defined district.

After the ordinance establishing the downtown special improvement district in Red Bank wound its way through bureaucracy in 1991, certain properties along Broad Street, Monmouth Street, White Street, West Front Street and a few side streets became part of the special improvement district.

“While it is someway similar to a tax,” Zuckerman said, “property taxes go to the municipality’s general fund and for all sorts of services: police, administration, elections, transportation, DPW and all sorts of things. In this case, the assessment dollars that the (commercial properties in the special improvement district) pays goes directly to us for the specific purpose of improving our downtown.”

The money raised would fund things like Christmas lights or façade renovations.

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“In the world of capitalism, everybody that owns a building thinks they know the right thing for their building,” said architect Michael Simpson, who pushed for the RiverCenter’s Visual Improvement Committee. “A unified notion of good aesthetic, enhances everybody’s business and enhances everybody’s real estate. … It’s like words. It’s like literature. Putting your right words together makes a really, really great book. Putting the right buildings together makes for a really, really great story of the downtown.”

Zukus credits the continued existence of the RiverCenter with putting politics aside and getting people, including residents and borough officials, involved. The current 30-member board was born from this insistence on community involvement, he said.

“This isn’t going to be some dictatorship; we’re all in this,” Zukus said.

John Bowers, whose family owns Shrewsbury Manor and City Center Plaza, said that at the time, “The mood was about 70% positive, 30% negative about the RiverCenter, but we made it so it leaned more positive.”

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Downtown needs

When Simpson was working in Philadelphia in the 1980s, he and his now-business partner Edward O’Neill would talk about small urban towns.

“It’s like an all-American town kind of a notion,” he said. “That you can have businesses packed together and you can have businesses and people raising their kids and going to school.”

But these small towns were falling into disrepair.

“If you’re going to the south, you go to some places where businesses have left,” he said. “Those places become great barren zones, great drags on the economy and the lifestyle of people around them because they’re just vacant places.”

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Red Bank, the subject of O’Neill’s master’s thesis at the University of Pennsylvania, was likely to follow, Simpson said.

After the borough approved its special improvement district, the RiverCenter’s first goal was to beautify the downtown, focusing on its 19th-century small town aesthetic. It added brick sidewalks and changed the street lamps.

David Prown, who came to Red Bank in 1989 to take over his family-owned store Prown’s Has Everything, said he credits the revitalization to the RiverCenter’s participation in trade shows.

Instead of marketing individual properties or individual stores, the nonprofit marketed the downtown as a whole. “It just started bringing in bigger and bigger and bigger players,” Prown said.

Starbucks and other chain stores came to downtown.

By the mid-1990s, things had started to improve. The vacancy rate fell.

Some of the priorities like parking — both adding more spaces and directing people to less visible spaces — require approval by the borough government and continue to be an issue today.

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Changes and commitments

Businesses cycle in waves of expansions and contractions. Perndorfer credits the RiverCenter’s continued existence to the many volunteers.

“Every year it’s millions of dollars of volunteer time,” she said. “It’s building owners. It’s architects. It’s store owners. It’s restauranteurs.”

The 2024 RiverCenter budget totaled $579,970. Of that budget, $83,535 was earmarked for horticulture and "Outdoor Business Expansion & Broadwalk & Landscaping," $20,000 was earmarked for marketing and promotions and $8,000 was earmarked for business recruitment.

But the economic upturn was not without its costs. Some businesses found themselves forced out of town, as the economy changed and real estate prices rose.

Prown’s Has Everything, which had been in Red Bank since 1925, moved to Middletown in 2015, now known as Prown’s Home Improvements.

Customers were buying things on the internet and his vendors stopped selling to them, Prown said. His business model became outdated.

Red Bank “just didn’t fit for someone like Prowns Has Everything, but for a lot of other people it was a home run. And good for them,” he said, adding, “No animosity (to them) at all. None at all.”

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Today the downtown commercial vacancy rate is 4.5%, according to Zuckerman, a number that doesn’t include vacant stores with tenants that have not moved in yet.

According to Jay Herman, whose company Downtown Investors owns the red brick Merrill Lynch building, a good downtown has to have five “use groups” that feed on each other — retail, office, restaurants, entertainment and residential. Offices and apartment buildings bring people downtown who can spend money at restaurants, retail and entertainment.

While demand for office space decreased as a result of the pandemic, Herman said people are moving out of New York for Red Bank.

For example, the former Visiting Nurses Association building is being torn down to build 212 apartments .

“Many people have said this before me,” he said. “As one (use group) ebbs, the other flows, and that’s another reason having a strong market for all five makes it work.”

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The surrounding residential neighborhood in Red Bank is in a seller’s market, meaning there are more people looking to buy homes than are available. The average rent of new apartment buildings approved in the last decade charge over $3,000 per month.

According to an analysis of Zillow sales data, the average single-family home between 1990-1994 sold for $137,119, which is $304,780 today when adjusted for inflation. Homes that appear to have sold at foreclosure were excluded from the data.

Sales prices peaked between 2004-2008, with an average home selling for $436,680, or $682,078 when adjusted for inflation. After the 2008 financial crisis, the average home sold for $385,927, or $505,880 when adjusted for inflation.

Since the 2020 pandemic, sales of single-family homes have averaged $652,195. On average, townhouses and condos have seen a similar trend. Post-pandemic, the average townhouse and condo has sold for $449,170.

On the west side, single-family homes have sold for an average of $454,000 post pandemic. And single-family homes on the east side have sold for an average of $769,326.

For residents looking to sell, the market is great. However, especially for residents who bought during economic downturns, higher home assessments have raised their taxes.

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Resident Mary-Ellen Mess said she worries that the borough is gentrifying.

"Our African American community and our Latino community are really being pushed out," she said.

“There’s just a real lack of affordable housing for everybody,” said Simpson, who plans on retiring from his firm after Labor Day. “So, you get a stratification that is not great.”

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A previous Borough Council in 2022 opposed some actions by the RiverCenter, and wanted to limit the run of Broadwalk , which closes a portion of Broad Street down for outdoor dinning. That council had also worked to restrict short-term rentals to prevent investors from buying up single-family homes .

That council has seen been replaced by a new majority that recently approved Broadwalk to run annually and eased some of the short-term rental restrictions .

Zuckerman, who was appointed as executive director in 2022, announced that he will step down from his role at the end of the year. In his two years, the RiverCenter celebrated Oktoberfest to the borough, welcomed the return of the of the New Jersey Symphony to Marine Park to perform free Fourth of July concerts and published a weekly newsletter promoting the downtown.

The RiverCenter’s next project is on the corner of Monmouth Street, where it intersects with Broad Street. Instead of the ugly cones to prevent people from parking illegally in that area, the nonprofit plans on constructing a small park with a $30,000 grant from the state and $70,000 from its own budget.

Olivia Liu is a reporter covering transportation, Red Bank and western Monmouth County. She can be reached at oliu@gannett.com.

This article originally appeared on Asbury Park Press: No more 'Dead Bank': Downtown Red Bank rescued itself, but can there be too much success?