By Cati O'Keefe. "I told them it was my way or the highway," says South Amboy's Mayor John T. O'Leary, referring to the national builders interested in developing in his small New Jersey town. "I showed them the highway."

He also could have shown them the railway or the waterway as possible exits from this 1.5-square-mile city of 7,080 citizens. The area offers three transportation alternatives, one of only two such cities in New Jersey. For this reason, along with its undeveloped waterfront, South Amboy represented a lucrative target for developers.

But the city had grander plans than the "mid-range-priced homes with humdrum exteriors" proposed by developers. O'Leary and the South Amboy Redevelopment Agency (SARA) dreamed more along the lines of "high-end Victorian Jersey shore," melded seamlessly with the city's 1920s-era stock of Victorians and bungalows.

Unfortunately, developers didn't agree that the city could support high-end product, primarily because of its rundown condition.

Bypass blues

As happened to many New Jersey shore towns over the past half century, highways routed visitors away from meandering drives along the coast, while malls lured shoppers from Main Street. By the early 1990s, South Amboy's main commercial boulevard was 60 percent vacant.

The mayor embarked on an ambitious revitalization mission, identifying a piece of property on the waterfront as the city's ticket out of decline. "It didn't take long to notice that only half the town was developed," notes O'Leary. "But we had infrastructure problems to address."

Named for the 100-year-old Great Beds Lighthouse anchored a half-mile out in Raritan Bay, Lighthouse Bay is only one part of an ambitious redevelopment plan in South Amboy, N.J., that will include a cogeneration facility, office parks, restaurants, a 150-acre park, and a marina. When it is finished, every inch of waterfront in this transit-oriented community will be accessible. Using the town's "multi-modal transit hub" status as leverage, the mayor assembled $87 million in financing, primarily through grants awarded by Middlesex County and New Jersey for helping the state comply with the Clean Air Act and through its participation in a state-run "transit village" program. With that money, the town upgraded its infrastructure and developed what has become the third busiest rail station on the East Coast. Home buyers, attracted by the 40-minute commute to New York via train or ferry, soon followed.

Pull no punches

When it decided to bid for the residential component of South Amboy's redevelopment plan, Pleasantville, N.Y.-based Baker Residential knew what it was in for.

"We heard the city was 'difficult' to work with," says Chris Baker, COO of the company, referring to the city's reputation as over-controlling. "And we knew a national builder had gone pretty far into the process before it [failed], but we liked the location, so we listened to what they wanted."

But although they paid careful attention, Baker executives weren't shy about voicing opinions.

"We were in a meeting, and the mayor rolled out some plans. ... We told him that some things were terrible," laughs Baker. "Fortunately for us, he found our approach refreshing."

So while SARA provided the vision, Baker honed the details and guided the project's execution. The resulting 194-unit project called Lighthouse Bay includes townhouse and single-family plans that borrow the best aspects of Victorian and New England architecture.

"We also leveraged the waterfront," notes Baker. "We added a clubhouse and moved the community pool from the interior of the project to alongside the bay, so people who didn't buy views could enjoy the amenity."

What strikes Baker about the development process is how his company actually benefited from the city's involvement.

"We are building in an anti-growth environment," reminds Baker, whose company puts up about 650 homes a year in the Northeast. "You can get boxed in on the local level. If while building you discover something you aren't delighted with, changing it requires a discouraging approvals process."

But with the team in agreement on the vision for Lighthouse Bay, changes happened rather effortlessly: "For example, there was a drainage feature that separated the homes from the park. But when we did it, the grades didn't work out," Baker says. "We wanted to put in retaining walls."

Done, said the city.

"We had master-down plans that didn't work on all the lots," Baker continues, "We asked the city to modify the lot coverage."

The 2,720-square-foot Monterey model won the Southern New Jersey MAME award for best single-family model, and the community as a whole won a best community award. Lighthouse Bay's 115 townhomes start at $345,000, while the 79 detached homes range from $445,000 to $500,000 for interior sites and more than $1 million for semi-custom waterfront sites. Not a problem, said the city.

And so it went. But that kind of instantaneous accommodation cut both ways: Baker had to pull 60 percent of the siding off its first two townhouses because the city didn't like the color scheme it had a hand in selecting. "In a different environment, we would have said, 'Sure, the paint could be better, but it's fine as is,'" says Baker.

Demand excellence

Baker's only complaint with the project is that it isn't big enough.

"Redevelopment areas are exciting and different from other areas where the municipalities say, 'That's our ordinance, work with it,'" says Baker. "Sure it was different having the city have a say over exterior elevations, but in the end, it added value."

The company has sold 124 homes in the $95 million project and will sell the remaining 70 homes by year's end. The 156-home second phase is scheduled to begin in 2004.

Why did Baker succeed where other developers failed? "We didn't just come in and say, 'We can do whatever you like as long as it fits in this [design] book,'" explains Baker. "We're agile, and that was our advantage."

Cati O'Keefe is a freelance writer based in Arlington, Va.