PENNSAUKEN, NJ-Some 15 developers vied for the right to redevelop 600 acres of prime waterfront sites on the Delaware River here, and local officials have opted for a bid submitted by the Raleigh, NC-based Cherokee Investment Partners. Cherokee will do the $1-billion project through a subsidiary, Cherokee Pennsauken.

The company, which is headed by CEO Tom Darden, specializes in the redevelopment of brownfield sites. Cherokee is also no stranger to the Garden State: Late last year it was tapped as the lead developer for a $1.2-billion project in the Cramer Hill section of Camden, which is located immediately south of this city. And an affiliate, OENJ Cherokee, has redeveloped a major tract of industrial land in Elizabeth, NJ, a project that includes the Jersey Gardens Mall.

What Cherokee has in mind for this South Jersey city of 35,000 is a mix of houses, golf courses, offices, retailing, hotels, a community center, recreation and other uses on the contaminated, but mostly unused land dotted with tank farms and vacant industrial buildings. The company also intends to create wetland restoration zones, waterfront boardwalks and a ferry terminal along a total of seven miles of shoreline.

Pending state and local approvals, Cherokee hopes to start construction on the first residential community by the end of next year. No timeline for the build-out of the massive project has been released. “There is definitely some cleanup that needs to be done,” Pennsauken Mayor Rick Taylor said as the designation of the developer and scope of the proposal was unveiled.

The 600 acres involves three sites on the mainland, including tracts owned by Texaco and Amerada Hess. But it’s the 300-acre Petty’s Island, located in the Delaware River, that’s become controversial. Under Cherokee’s proposal, the Petty’s Island portion of the redevelopment would include a 250-room hotel/conference center, a golf course, two residential communities, offices, a retail component and a $20-million recreation center.

But Citgo, one of five owners of Petty’s Island, last month unveiled a plan to clean up the island at its own expense and donate it to the state as a nature preserve. Among other things, the island is home to a nest of bald eagles.

Citgo’s announcement runs counter to the city’s designation of the island as part of its redevelopment zone, and Taylor has already indicated that the city may use an eminent domain declaration to foil Citgo’s plan. Cherokee officials say their proposal does include preservation of the bald eagle nesting site.

The Petty’s Island issue figures to be a thorny one, according to observers, who say that the city and Citgo haven’t been communicating with each other on the island’s future. Jack McCrossin, the company’s manager of environmental security, has already admitted publicly that Citgo would expect to get a bigger financial benefit from donating the land to the state compared to turning the property over through a condemnation proceeding. Environmentalists have quickly jumped in on Citgo’s side of the argument.

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