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Appraiser: Regulator station will have no adverse effect on property values

 A real estate appraiser has testified that a proposed New Jersey Natural Gas (NJNG) regulator station would not have have a negative impact on residential or commercial property values if it is constructed in Holmdel.

Jeffrey Otteau, of the Otteau Valuation Group Inc., appeared before the Holmdel Zoning Board of Adjustment on Oct. 10.

Otteau testified on behalf of NJNG, which is seeking variances and municipal permission to construct a regulator station at 970 Holmdel Road to reduce the pressure in an existing transmission system.

NJNG operates a temporary regulator station on the Vonage property, 23 Main St., where an underground system has been installed to continue to meet the needs of gas customers in the area. The system cannot continue to operate at 23 Main St. because it is not sustainable in the long run, according to previous testimony.

During his testimony, Otteau said he conducted a study to determine if the construction of a regulator station at 970 Holmdel Road would have an adverse effect on property values near the site.

He said he analyzed similar facilities in northern New Jersey and in Monmouth County and a unit’s relation to nearby properties. Otteau said he concluded there was no negative impact on property values in those areas.

Otteau said commercial and residential properties are more than 2,000 feet from the proposed regulator site in Holmdel. He said two homes are closer, at 350 feet and 450 feet from the proposed site. The property values of these homes will not be affected, he said.

“I took into consideration the context of neighborhood land use,” Otteau said, speaking of the closest residential developments to the proposed site. “There are a wide diversity of land uses that exist in this neighborhood … We have commercial properties, a solar energy farm, office buildings and a cell tower all located in close proximity to homes.

“The significance of this mixture of permitted uses and existing uses is when looking at the neighborhood from a residential perspective, adverse influences already exist in this neighborhood which have a bearing on property values,” Otteau said.

Otteau said there would be zero percent impact on the value of residential and commercial properties in the municipality if the regulation station were to be constructed and operated.

“This investigation has indicated there is no effect on either (commercial or residential) as the market sees it … Whether you like it or not, when it comes time to sell (a house), the next buyer or the next user won’t take (the regulator station) into account,” Otteau said.

“I have a scenario for you. I’m looking to buy a house. My budget is $1 million,” zoning board Vice Chairman Demetri Orfanitopoulos said. “I say, ‘Show me some homes.’ The real estate agent says, ‘I have a home. It’s across from a gas regulatory system. I have another home almost a mile away. They are both $1 million. I know you have kids. Which house would you like to see?’ What do you think my answer would be?”

Otteau responded, saying, “With respect, whatever the answer would be is completely irrelevant. The question is not how you would view this. The question is how the market would view this. If you’re feeling is, ‘I’d rather not,’ my analysis says someone else will … The premise you are doubting is my testimony that this premise is valid, accurate and true.”

Orfanitopoulous said he did not agree with the testimonty Otteau gave. 

Richard Reading of Richard Reading & Associates, an economic analyst and consultant, provided the conclusions of his fiscal impact analysis regarding the construction of the proposed regulator station.

He said the property at 970 Holmdel Road will increase in value if the regulator station is constructed there and he said the higher property value will result in additional tax revenue to Holmdel.

“The regulator station will represent a very substantial investment by NJNG,” Reading said. “Overall, the added revenues and allocated costs vastly exceed the service costs.”

During public comment, attorney Anthony Sposaro said he represents the owner of the Fox Hollow Vineyards, which is located across the street from the site of the proposed regulator station.

Sposaro asked, “Why hasn’t consideration been given to a heater (for the regulator station) that has a different size or configuration” than the heater that has been proposed?

Attorney Nancy Skidmore, who reprsents NJNG, objected to the question and said the company’s position about the heater is already on the record.

Residents asked questions about various aspects of the regulator station and the NJNG representatives answered their questions. Some residents said that from a real estate point of view, they did not believe the proposed location of the regulator station is appropriate.

The hearing is scheduled to continue at a special meeting of the zoning board on Oct. 25 at the Holmdel municipal building.

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