On North Avenue in Garwood, one piece of the old Aeolian factory is still standing on an otherwise cleared lot. The borough calls it "the Castle." Aeolian moved manufacturing to Garwood around August 1900, after it bought the Votey Organ Company in 1898. The plant later ran as Garwood Paperboard, and that's the name the site still goes by. The redeveloper took down everything else in 2019. The Castle was kept and has to be built into whatever goes up next.
Seven years later, the lot has a signed agreement and a financial penalty if the developer misses construction milestones. It also has a much bigger building planned than the one approved in 2022. The smaller project stalled because it stopped making economic sense. New Jersey's affordable-housing process gave the developer a formal way to reopen the terms, and the borough agreed to more density in exchange for a binding schedule and public space.
If you're comparing Garwood with Cranford or Westfield, this matters beyond one lot. It shows what it takes to get a stalled inclusionary site moving in this part of Union County in 2026.
Seven years, in the order they happened
The record is spread across several borough documents. Put in order, the turning points look like this:
- November 5, 2018. Garwood signs its original redevelopment agreement with Garwood Paperboard Urban Renewal Associates, LLC. According to The Leader, the project was amended in 2020.
- 2019. The old factory is demolished, except for the Castle.
- March 23, 2022. The Planning Board grants preliminary, but not final, major site plan approval for a 124-unit inclusionary apartment development and a separate commercial self-storage building on the site. The approval is memorialized June 22, 2022.
- 2023. According to the developer, market conditions end the self-storage operator's agreement, and the developer can't find a replacement.
- May 28 and June 12, 2025. Garwood's Planning Board adopts its Fourth Round Housing Element and Fair Share Plan, and the Council endorses it.
- August 27, 2025. The developer files a challenge to that plan.
- January 22 and February 9, 2026. The borough, the developer and Fair Share Housing Center sign a settlement, and a judge approves it.
- March 11, 2026. The Planning Board recommends adopting the amended redevelopment plan. The developer's next step is to apply for site plan approval.
- September 24, 2026. The Council passes Resolution 26-168, which amends the redevelopment agreement.
Step four is the one to focus on. The 2022 approval paired the apartments with self-storage, and the storage piece was part of what made the numbers work. When that operator left, the approved plan had a gap that nothing else filled.
The density math behind the stall
The site covers about 4.54 acres. The old plan allowed 27.5 units per acre, which is about the 124 units approved in 2022. In its challenge, the developer argued that higher construction and financing costs made that density "no longer realistic for an inclusionary development." It asked for a plan amendment allowing more units.
Here's the reasoning behind that. In an inclusionary building, the market-rate apartments pay for the affordable ones. Land, demolition and the affordable set-aside cost about the same whether the building has 124 units or 212. Construction and borrowing costs went up while the storage income disappeared, so the only way to make the math work again was to spread those fixed costs over more units. The approved 212 units on the same 4.54 acres come to roughly 47 units per acre, about 70 percent more than the old limit.
The borough disputed that it caused any delay. The amended plan says Garwood "has consistently acted in good faith and in a timely manner." It also notes that the borough had already agreed to add an age-restricted building and had sent the developer a draft amended plan on August 22, 2025, five days before the challenge was filed. Both sides were moving toward a bigger building, and the challenge put the dispute before Fair Share Housing Center at a settlement session on December 8, 2025.
The timing came from state law. As the amended plan describes it, New Jersey's Fair Housing Act gave interested parties until August 31, 2025 to file a response alleging that a town's adopted fair share plan did not comply. Garwood was counting on this site for its affordable-housing credits. After a vacant land adjustment, the borough's realistic Fourth Round development potential came to 53 units. The amended plan puts 18 of the site's affordable units toward the Fourth Round and 19 toward the Third Round, 37 in all. With that much of the borough's compliance tied to one lot, the developer's request carried real weight.
What the borough got in exchange
The settlement didn't only add units. Here's how the project changed between the two approvals:
| Earlier project terms | 2026 amended plan | |
|---|---|---|
| Residential units | Up to 124 in a four-story building | 212 total: up to 124 apartments, at least 88 age-restricted |
| Affordable units | 18 | 37, located in the non-age-restricted portion |
| Non-residential use | Separate commercial self-storage building | None; commercial component removed |
| Public space | 4,000 sq ft of amenity space dedicated to the borough, plus a 4,200 sq ft green space and courtyard | 4,200 sq ft borough community center; at least 5,000 sq ft of public outdoor area |
| Historic element | The Castle preserved | The Castle incorporated into the new building |
| Parking | About 286 surface spaces for residents | Enclosed ground-floor parking |
The plan also allows up to 10 bedrooms for special-needs adults and requires streetscape work along North Avenue. That includes lighting, street trees, paver sidewalks and crosswalks, bike racks and benches. No privately owned property will be taken.
Then there's the penalty. According to Citizen Portal's summary of the September Council meeting, the amended agreement includes a $1,000,000 penalty if the developer misses construction milestones. Residents at that meeting asked for clearer public copies of the amendment. Councilwoman Anarelli abstained, and the resolution passed.
The Leader reported that Mayor Jen Blumenstock announced a final agreement with the developer. The borough's redevelopment attorney, Brian Chewcaskie, described the amendment this way:
"This amendment reflects what's in the Redevelopment Plan, it identifies what is the proposed project, and it provides for a project schedule."
Under the new agreement, missing those scheduled dates now costs the developer real money.
What still has to happen
A signed agreement doesn't mean construction is about to start. Several steps are still open:
- Site plan approval. The 2022 approval covered the older design. The developer still has to bring the 212-unit building back to the Planning Board. At the March review, a resident asked about the traffic study, and that topic is likely to come up again at the site plan hearing.
- Milestone dates. The agreement includes a schedule, but its specific dates haven't been published. No construction start or completion date is public.
- Tax treatment. The amended plan says the Council may approve a long-term tax exemption, or PILOT, and notes that a PILOT was considered as part of the settlement. The rate, term and payment formula aren't published.
The amended redevelopment plan is public, and its text is the place to check the full terms.
Where 212 rentals land in a tight for-sale market
Garwood has done this before. The first phase of Vermella at Garwood Station, 296 apartments at 450 South Street, was reported complete in October 2022, according to Real Estate NJ. The Paperboard building would be the borough's second large rental project in a few years.
These are rentals, though, and that matters for anyone shopping in Garwood. The building adds no single-family homes for sale, and the countywide for-sale market is tight. NJ REALTORS doesn't publish Garwood-specific figures publicly, so Union County numbers are the closest stand-in. In September 2026, Union County single-family homes sold at a $675,000 median, at 103.6% of list price, in 27 days on market. There were 670 active listings, about 2.8 months of supply. Through September 2026, the countywide median was $700,000, and homes sold at 105.0% of list.
The county's townhouse and condo market was looser in September 2026. Those homes had a $415,000 median, sold at 99.9% of list, and had 3.4 months of supply. A new rental building competes most directly with that end of the market, more than with detached homes. For anyone buying a single-family home near North Avenue, the more useful date is the Planning Board hearing on the amended site plan, which will be held in public.
A few questions this raises
Will there be shops on North Avenue at the site? No. The commercial component was removed in the settlement. The North Avenue frontage is planned for a borough community center and landscaped open space.
Is the Castle staying? Yes. The plan requires it to be built into the new residential development.
When will construction start? No date is public. The developer still needs site plan approval for the amended design. Once that's granted, the milestone schedule in the September agreement, and the penalty attached to it, sets the pace.
If you're weighing a home near North Avenue and want to talk through how the Paperboard schedule fits your timing, Frank and the team at The Isoldi Collection follow every Garwood hearing and are glad to go over it with you. Request a Private Market Consultation.
