Once-luxury Cherry Hill apartments hit hard times

With their social clubs, balconies, and large swimming pool, the 18-story white apartment towers near Route 70 and I-295 were a premier Cherry Hill residence years ago.

The Grand Apartment Homes of today are not so grand. Ceilings and walls are pocked with water damage. Smoke detectors dangle from wires and hallway carpets are covered with plastic to protect them from asbestos contamination. The pool will be closed again this summer.

Developer Jeffrey Hirschfeld, who bought the property in March 2008 with partner Dubai Investment Group Real Estate, has failed to deliver on a $26 million renovation he promised would restore the two 1969 towers to their "former glory and beyond."

Contractors in the buildings, formerly known as the Landmark, walked off the project late last year. They claim they're owed nearly $2.5 million. On April 22, after the developers allegedly defaulted on loans of $63.4 million, lenders Eurohypo and Arefin US Investment filed for foreclosure.

The parties are due in Camden County Superior Court on Monday for a hearing on the lenders' request for a receiver to collect rent while the foreclosure proceeds.

In the meantime, the Grand's residents live with the fallout: water damage, poor building security, and exposed orange fire-sprinkler pipes throughout their apartments.

Balconies were under construction for most of last summer. In the winter, some people went days without heat. The problem was exacerbated by the fact that most residents are over 65. Many have lived in the rent-controlled towers for decades.

"We're left with a building that is literally devastated," said Rae Haltzman, president of the tenants' association and a resident since 2005. Her in-laws have lived there for 28 years.

Less than half of the buildings' 544 units are occupied, in part because previous owners attempted to turn them into condos and did not renew leases.

The tenants have asked the court for their own receiver to collect rent and remedy safety issues, a request that would be dropped if the tenants association and lenders came to an agreement. They also want compensation for their inconvenience, Haltzman said.

Why the renovation fell apart is unclear, though both demand for luxury apartments and the construction of new buildings has slowed.

Anthony Juliano, who oversees real estate for the Dubai Investment Group, declined to comment when reached Tuesday at his New York office.

Andrew Shott, an Ohio lawyer who represents Hirschfeld Properties, would not talk specifically about problems at the Grand other than to cite the economic decline. He said he had not filed a response to the foreclosure complaint as of Wednesday.

"The parties are talking to one another, working out a resolution," Shott said. "I'm hopeful that one will be achieved."

Contractors have filed at least 15 liens. Some say they are hopeful that the lenders will pay them or even hire them to finish the job.

Chris Maguire, owner of Joeybrima Associates in Locust, Monmouth County, says he was replacing the heating and cooling system when payments stopped in November. He is still owed $116,217, he said.

"We're just a small company," said Maguire, who does about $3 million of work yearly. "This really hurt us. We're just looking to get what we're due. We'd be more than happy to go back and finish the job."

Five Boro Associates of Staten Island, N.Y., which was installing fire sprinklers, has liens totaling $510,300. Like most contractors, owner Peter Barbarito has had to file liens on other jobs, but "never for this amount," he said.

In their request for a receiver, the lenders link the developers' "flight" from the project to the discovery of asbestos in the building.

Tenants have been told that work in the hallways may have disturbed asbestos in the walls, Haltzman said. The carpets have been cleaned with special vacuums and covered with plastic.

"It is simply beyond question that this project teeters on the brink of total failure unless the requested relief is granted," Marc Gross, the lenders' attorney, said in a filing to request the receiver.

Cherry Hill Mayor Bernie Platt wants to see the Grand restored. He has hosted dinner there on the eve of each township election and he has tried to advocate for residents. He called the developers arrogant.

"I don't think they understood the community," Platt said. "I don't think they understood the magnitude of what they were trying to do. I just think they were in over their head."