MC Residences rendering.

Montclair officials are reviewing a proposal to approve short-term rental units in a building currently under construction, originally approved as rental apartments.

The Township Council introduced, by a vote of 4-2, an ordinance at their July 18 meeting to amend the Montclair Center Gateway Redevelopment Plan to permit short-term rental units. Mayor Sean Spiller, Deputy Mayor William Hurlock, and Councilors Robin Schlager and Peter Yacobellis voted to introduce the proposal; Councilors David Cummings and Lori Price Abrams voted no; Councilor Robert Russo abstained.   

The proposed ordinance was sent to the township Planning Board for review. After that quasi-judicial board weighs in with recommendations, the legislation will be returned to the Township Council for a public hearing and a final vote, still to be scheduled.

The issue of changing an approved rental property into what is essentially an extended-stay hotel has ramifications within the township’s housing stock.

The revised redevelopment plan defines short-term rental as “multi-family dwelling units that may be offered for rental to the public with or without meals for a term of less than 28 days.”

Proponents say the proposed change would bring much-needed executive-level short-term rental housing to the township and bring added revenue from another hotel that would pay additional taxes. But affordable-housing advocates say there aren’t enough rentals for everyone who needs one and this would take away desperately needed permanent housing options.

The plan originally adopted for this parcel was approved to include four affordable-housing units within the MC Residences, a 40-unit market-rate rental building. These affordable units are required to remain whatever changes might be made to the category of housing of the structure. The property is at the site of the former DCH car dealership at the intersection of Bloomfield Avenue and Orange Road.

Councilor-at-Large Peter Yacobellis thinks it is a good idea. “This, like any other housing policy, is complex and nuanced,” he said. “I really believe in looking at each circumstance individually while we think about macro housing policy for Montclair.”

In addition to new housing units at the MC Residences, there are additional units at 65 Church Street, and the Lackawanna Plaza project that is still in the planning phase, Yacobellis said. “When those are already online, it’s a good time to pause, revisit our master plan, engage the community in a discussion and honest conversation over everyone’s vision of town and what we want to be and how we want to grow.”

In addition, the change in occupancy category would mean that the building would be taxed as a hotel, bringing revenue to the township, he said. The property would be subject to a 3 percent hotel occupancy tax.

A Switch to Short Term

Others on the council think the ordinance should come before allowing a project at a specific parcel, and approving this proposed change could be a slippery slope to allowing more short-term rental units without regulation.

“It really shows a lack of respect to what development is supposed to be about,” said Fourth Ward Councilor David Cummings. “I do not believe this development would have been approved if he [the developer] had said in the beginning he wanted to do all these short-term rental units.”

Cummings recommended creating laws regulating Airbnbs and other short-term housing options throughout Montclair before township officials discuss changing this specific property.

Having permanent residents in a temporary building means that those people wouldn’t know their neighbors, an important part of creating community, Cummings said. While the project does include four affordable units, those residents are going to be living with hotel guests, he said.

“The bottom line is, you are not providing housing in Montclair, and you are not giving those who qualify for affordable housing what I would consider a normal housing experience,” Cummings said. “It does not provide what I consider to be a home experience.”

Brian Stolar (center), president and CEO of The Pinnacle Companies, was joined at an October 2022 groundbreaking ceremony for MC Residences by Mayor Sean Spiller, Deputy Mayor Bill Hurlock and Second Ward Councilor Robin Schlager.

Brian Stolar, CEO of The Pinnacle Companies, which with its joint venture partners is developing this parcel, said the proposed change would bring a boutique-level of extended-stay rental units to downtown Montclair, perfect for people on business who need to stay for a week or two, local residents who need a short-term place to stay while their home is under construction, guests at holiday times, or even grandparents visiting a new baby.

“It’s a great concept for Montclair,” he said. “This kind of housing doesn’t exist today anywhere in Montclair. There are no short-term professionally managed residences of any kind. And having Marriott as the building’s brand can bring only good things.”

The building would be under the company’s “Apartments by Marriott Bonvoy” brand and designed to their specific standards, he said. In addition, having the property designated as a hotel would mean the township will receive a hotel occupancy tax, he said.

Projections by Marriott and the developer’s consultants show Montclair could receive close to $100,000 per year from the hotel occupancy tax, in addition to property taxes, he said.

The Pinnacle Companies and its various partners have completed other projects within the township and within the Gateway Redevelopment area, including the Valley & Bloom mixed-use development that includes rental apartments, retail space and offices. Within the Gateway Redevelopment area, they have also developed The MC Hotel with The Hampshire Companies, which is under the Marriott Autograph Bonvoy Collection. The management team at the MC Hotel would also manage the proposed short-term rental apartments at the MC Residences.

The short-term rentals would function exactly like apartments and have full kitchens and would be furnished to Marriott’s standards, Stolar explained. The building would also have a concierge and other guest staff available 24/7, just like The MC Hotel, he said. The four affordable units would be located throughout the building as state law requires and as a condition of approval by the township Planning Board. Residents of the affordable units, as permanent residents of the building, would have access to valet parking spots and the facility’s staff, he said.

Such a facility would be “another feather in the cap of Montclair,” Stolar said.  He expects the building to open in April 2024.

But William Scott, chair of the Montclair NAACP housing committee and a former co-chair of the Montclair Housing Commission said Montclair needs more affordable housing rather than short-term rentals, and maybe there is a solution to benefit both.

Scott suggested, since this is a “lucrative change” for the developer, that township officials “ask for a minimum of four additional affordable units, which would have met the 20 percent set-aside, opposed to just settling for a mere $90,000 per year [as a hotel tax] as a benefit to the township.” He also said township officials should “start considering additional funding sources to support affordable housing in Montclair.”

Scott, a 73-year township resident, said a better way to deal with this issue would be to create an ordinance overseeing the entire township, not just this parcel, which is called spot zoning. “You would put the ordinance in place before permitting the use,” Scott said. “We should not be creating zoning ordinance using spot zoning.”

Yacobellis said the project could be seen as an experiment in Montclair and guide the way forward with an ordinance regulating short-term rentals.

“The market is demanding this particular use case in terms of short-term rentals. I think it’s a good idea as a way to bring new people and a new revenue stream to Montclair while at the same time not adding kids to the schools,” he said. And by doing it all in one building, “we can have a real-world example of how it works in Montclair that I think can then inform how we construct the short-term rental ordinance.”

9 replies on “Montclair Considering A Change to MC Residences to Allow Short-Term Rentals”

  1. A couple of things:

    1) $90K in hotel tax revenue for 36 suites? Maybe in leap year. We budgeted $290K this year for the 180+ rooms between the MC Hotel & The George. Maybe someone should run a pro forma comparative analysis. Please, not the CFO. This Council doesn’t value her skills in this area.

    2) Kids, good news! We have a new 2 BR apartment that we can afford. Where? In a hotel! It has a business center where you can do your homework. You can use the rec facilities, but can’t bring your friends. There will also be 3 other affordable dwellings with tenants like us. The other 36 will be high-caliber transients.

    3) And just for giggles & consistency, the Council may want to use the same language, definitions and terms as being proposed for Lackawanna Plaza’s proposed hotel use. I know each redevelopment area is unique – as is its zoning overlay. But, c’mon, it looks like a rubber stamp process of what each developer is asking.

    Anyway, very entertaining stuff. In the end, whatever you decide Council is fine by me.

  2. “Projections by Marriott and the developer’s consultants show Montclair could receive close to $100,000 per year from the hotel occupancy tax, in addition to property taxes [sic], he said.”

    If only the Council understood the finances of this redevelopment. And the parents coveting PILOT revenue don’t care about what is lost, just what is available. And all the Planning Board can do is sit back and watch.

    This is soooo much fun.

  3. This is ridiculous. We have lines of people wanting short term rentals in Montclair? For what purpose? The Foul Four just think they are going to make a killing from local tax. They are delusional.

  4. Montyxxx – We do in fact have lines of people wanting short term rentals. People renovating their homes, people living in the community while they find a home (there are currently only 17 homes for sale in all of Montclair), divorces, insurance losses, corporate relocations (we’re about 10 miles away from the pharmaceutical capital of the world), grandparents coming up for the holidays or for the summers after snowbirding, gig employees working on productions or short-term projects…this is a very real need.

  5. I also see the need & this is an ideal location with a unique legal spot zoning mechanism. But…

    First & second of all, this is the property owner and the designated Redeveloper’s need to solve.

    Third, the hang-up is supposedly with the managing company Marriott and the need to have stuff in writing. I’m a doubting Thomas, a party-pooper, a dyed-in-the-wool cynic. Don’t be me, but maybe experiment with the concept. Also, this may make the hair stand up on the back of the necks of legal types out there . (Since this Township is not into maximizing our meager local revenue opportunities, we can ignore the Finance Committee & CFO deliberations.)

    Fourth, Time. Why now? How does it matter?

    Fifth, who are the necessary subject matter experts to advise the Council not just on the ordinance, but through the process of revising the redevelopment agreement and financial agreement…and type of PILOT? For starters, our Council’s architect, MFD Code Compliance Inspector, the Municipal Building Inspector and our liability insurance provider (GSJIF) should be looped in before ANY decisions. Again, the optics of sticking 4 AH households in a hotel may have future consequences.

    Sixth, the obvious – Gateway 1 is a Redevelopment Area. There is a Redeveloper over the RA. Maybe he was leading us along to resolve. Maybe not. It seems moving the Affordable Housing obligation from this building to another building with the RA might make sense.

    The answer why this was not put on the table will tell you a lot.

    P.S. Everyone is having fun having/eating their proverbial cake – treating it as multifamily residential use while having a concurrent hotel use and collecting “almost 6-figures” in hotel occupancy tax revenue.

  6. Airbnb and VRBO both show a lot of short term rental listings in town. There seems to be no shortage of short term rentals.

    This seem mostly about regulation. The Township does not regulate short term rentals but the Council vibe is mildly opposed. A few Councilors have made noises about regulating these uses, which help homeowners pay the bills. Their view seems to be that it is better to let The Pinnacle Companies earn short term rental income in a regulated manner than to allow township homeowners to do so in an unregulated manner.

  7. The developer here Pinnacle, conned the town into getting many more apartment units than he was supposed to, taking advantage of a plan drafting error. As shown in the older Montclair Local article linked below.

    Now, he’s trying to get over again and change the type of housing that he was originally providing under the Gateway One Redevelopment Plan.

    Except that the development was originally “sold” publicly and supposed to provide housing for empty-nesters and seniors to help keep them in town — be it still at market rental prices. Now, thisdeveloper willing to change the very fabric of the community to a more transient class — really for his own fiscal gain.

    Those blindly supporting this on the Council who are new, seem to have no awareness of what transpired here in the past. Don’t ask. And while there is nothing wrong with potentially obtaining additional hotel tax revenues, Peter Yacobellis has accepted a campaign donation this past year directly from Brian Stolar. A year ago, he posted against short term housing. Now, he thinks it may be a good idea. Regardless, taking campaign money from developers is really not a great way to maintain your impartiality on development issues and policies. Don’t you think?…

    And those who are incumbents and now voting…still don’t see that their failure to act in 2018 (that means you Sean Spiller more than anyone) and correct the Amendment Plan language over how many units are involved as they should have back then — is still creating a housing mess here today.

    https://montclairlocal.news/planning-board-development…/
    https://montclairlocal.news/2020/02/mc-residences-developer-montclair-nj/

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