'Floor-to-ceiling' transformations underway at Shore apartment complex

SOMERS POINT, N.J. - When he talks about Bayview Court Apartment Homes, Jack Leonard's enthusiasm is boundless.

The level of enthusiasm increases exponentially, however, when the veteran Haddonfield-based developer is showing you some of what is happening at the 202-unit, 5.7-acre complex just a handful of blocks from Shore Medical Center.

"Look at the new balconies," Leonard said on a sunny morning in late October, as he pointed to framing climbing up one of the three-story buildings.

Turning to a structure behind him with rickety-looking wrought-iron balconies dating from the late 1960s, he added, "And that's what it is replacing."

Bayview Court, until recently known as the Gates but originally Atlantis Apartments, has been undergoing a top-to-bottom renovation since May, when all the necessary permits were finally in place, Leonard said.

The rehab is expected to be completed in five years, as apartments become vacant and available for "floor-to-ceiling" transformation, he said.

Leonard's Streamwood Co. bought the distressed property for $11.4 million in November 2014, according to Marcus & Millichap. The real estate investment services firm represented the seller, W.W.W. Associates of New York, which, records show, had purchased the five-building complex in 1985.

Two months before the sale, the Somers Point Planning Board had commissioned a study of the complex by Bach Associates of Haddon Heights at the request of the City Council, to determine whether the troubled complex met criteria for an area in need of "noncondemnation development."

That designation allows Somers Point to offer financial incentives for renovating the complex, including a 15-year payment-in-lieu-of-taxes agreement.

Under the agreement, the city will pay Streamwood, which was designated an urban-renewal entity by the state, $105,333 a year to help complete renovations.

Instead of paying taxes on the property, Streamwood will pay a set fee of $246,845 for the next 15 years.

The 2014 study showed that police responded to an average of 395 calls about crime and drugs a year between 2009 and 2014 at the Gates, which was 90 percent occupied, Leonard said, but "65 percent economically occupied" - meaning that 35 percent didn't pay rent.

"We do [Class] C and B apartments. Our goal here is to bring this to a B from an F," he said.

Streamwood owns apartments and shopping centers in Pennsylvania and South Jersey markets, and "we considered the pricing of this property attractive," said Leonard.

"It was an offering we knew and could fix up," he said, adding that Somers Point reached out to his company because of its track record in the area.

One of those examples cited was the 174-unit Madison Court Apartments in Williamstown, Gloucester County, acquired in 2003.

"That was not a major down-to-the-studs-and-bricks renovation because the rental market didn't warrant it," Leonard said.

Bayview Court, however, is targeting people who want to retire near the Shore but don't want the hassle of owning a house - or those with homes in Florida, for example, who also want apartments here.

"There aren't a lot of those rentals available in this area," he said.

Renovated units range from $1,015 a month for a one-bedroom to $1,150 for a two-bedroom, 1 1/2-bath unit, with gas for cooking and heat and hot water included until 2018.

Although he has been acquiring and redeveloping properties since the 1980s and has been at it full time with Streamwood Co. since 2000, Leonard's name remains on the sign of the real estate firm where his career began: Lenny, Vermaat & Leonard in Haddonfield.

"Our goal is to offer a better yet affordable product," he said, as he guided a tour of a crumbling "before" unit and a completed "after" example decorated by his wife.

aheavens@phillynews.com

215-854-2472@alheavens