The 450 homes approved for the former Circus Liquors property at 761 Route 35 will have no driveway onto Route 35. On Oct. 2, 2026, a New Jersey Superior Court judge approved a settlement between Middletown Township and AAMHMT Property LLC. Under it, the only ways in and out are Kings Highway East, Carton Way and Kanes Lane. If you're comparing homes on or near those streets, that detail matters more than anything else in the agreement.
The bigger lesson for buyers is about how new housing reaches Middletown now. For two decades this lot drew retail plans that depended on lenders. The plan that finally went through was driven by an affordable-housing lawsuit. Middletown still has a large unmet housing obligation, so this is the template for much of the township's next decade of new homes. Projects like this are still slow, though, and none of them will add inventory you can buy this winter.
Twenty-six years of plans for one lot
The 51-acre lot with the Calico the Evil Clown sign has seen several proposals. Each one shows a different force at work.
- 2000: Mountain Hill LLC, the development company of the Azzolina and Scaduto families, proposed a mixed-use commercial project called "Middletown Town Center." The township denied it, and the litigation that followed was settled in 2009, according to Two River Times.
- 2018: Village 35, also called The Shoppes at Middletown, was proposed with housing in the back and a Wegmans, a movie theater, a 24-Hour Fitness and shops facing Route 35.
- 2020: The developer dropped Village 35, saying it could not get loans to build it, as Patch reported.
- Aug. 17, 2023: AAMHMT Property LLC, a Wall Township developer, filed a builder's remedy lawsuit against the township over a 937-unit proposal.
- Aug. 6, 2026: The township and the developer reached a settlement allowing 450 units.
- Oct. 2, 2026: A judge signed off on the settlement.
Patch reported that the township had always been comfortable with housing at the back of the property and shops at the front. The commercial plans failed because they depended on financing that fell through. The residential plan went through because state affordable-housing law gave the developer a way to challenge the township in court.
How a 937-home proposal became 450
A builder's remedy lawsuit lets a developer sue a town that has fallen short of its fair-share housing obligation, and ask the court to override local zoning to allow a project that includes affordable homes. The tool comes from the Mount Laurel Doctrine. That doctrine began with a 1975 New Jersey Supreme Court case that outlawed exclusionary zoning and required municipalities to provide their fair share of affordable housing, as Two River Times explained in its coverage of the case.
The settlement trades density for a defined, smaller project. Here is what was approved, as reported by TAPinto Middletown and Patch:
| Home type | Units | Notes |
|---|---|---|
| Three-story townhomes | 170 | Market rate |
| Stacked townhomes, one unit above another | 226 | Mostly market rate, some affordable |
| Apartment-style units | 54 | Affordable |
| Total | 450 | 68 affordable, or 15% |
The affordable count is 68 and 54 of those are apartments, so 14 of the stacked townhomes are affordable. That leaves 382 market-rate homes on the site. Those 382 are the units that will compete with resale townhomes when they come to market.
Why this won't be the last settlement
Middletown's obligation is large. When the Third Round ended in 2025, the township still owed 602 affordable units, down from an original 1,026. The Fourth Round, covering 2025 to 2035, added 346 more. Township attorney Brian M. Nelson told Two River Times that because Middletown is so large, "our obligations are higher than – far higher than – anybody's."
Nelson also told the paper that at least a dozen sites around the township will help meet the remaining obligation. One of them is already settled. On West Nutswamp Road, a court-mandated settlement with Adoni Property Group LLC allows up to 136 townhomes, 20% of them affordable. As part of that deal, a separate Adoni-owned parcel on Red Hill Road is to be donated as open space. The township adopted the amended zoning for the site at its Jan. 20 meeting, and as of early February no formal development application had been filed, Two River Times reported.
Taken together, the two settlements point to what new construction in Middletown is likely to look like in the coming years: townhome communities where every affordable home is paired with several market-rate ones, on sites the township would have zoned differently if the decision were entirely its own. If you want a new-construction townhome in Middletown, these settlements are where the supply is coming from. If you're buying a single-family home on a quiet street, the useful question is how close it sits to one of these sites.
What changes near Kings Highway East, and when
Under the agreement, the developer has to keep many of the site's trees and leave wooded buffers along Route 35 and Kings Highway East. Nelson told TAPinto that in summer the homes should be largely hidden from both roads. Leaves fall, though, so expect more of the development to be visible from November through April.
The access plan sends all traffic from 450 households onto Kings Highway East, Carton Way and Kanes Lane. If you're looking at a house on one of those streets, factor in that eventual traffic when you weigh the price.
How soon it happens is a separate question. Patch reported that construction is still years away. AAMHMT still has to submit engineering and site plans to the township, get Middletown Planning Board approval and possibly get approval from the New Jersey Department of Environmental Protection, because there are wetlands on the property. The Mountain Hill families have a contract to sell all 51 acres to AAMHMT. The first local legislative step was Ordinance 2026-3544, which would adopt a redevelopment plan for the site. It was scheduled for introduction at the Township Committee's Oct. 19 meeting, and the Superior Court set a Nov. 10 deadline for Middletown to adopt the plan, according to Public Record NJ.
The townhouse market these homes will eventually join
Here is the market a townhouse buyer faces today. These are the latest public county figures from New Jersey REALTORS®, covering September 2026:
| Monmouth County, September 2026 | Townhouse-Condo | Single Family |
|---|---|---|
| Median sales price | $566,600, up 6.9% from Sept. 2025 | $811,500, up 2.7% |
| Closed sales | 130, down from 152 | 468, down from 473 |
| New listings | 216, up from 182 | 676, up from 589 |
| Days on market | 29 | 31 |
| Percent of list price received | 100.3% | 100.9% |
| Months of supply | 2.8, up from 2.5 | 3.0, unchanged |
These figures are countywide, not specific to Middletown. They still show the pressure a townhouse buyer is under. In September 2026, townhouse closings in the county fell 14.5% from a year earlier while the median price rose 6.9%. Sellers received 100.3% of list price and homes sold in 29 days. Supply has loosened a little, with new listings up and months of supply rising from 2.5 to 2.8. Even so, the market still favors sellers who price correctly.
At the county medians, a townhouse costs about $245,000 less than a single-family home. That gap is why townhomes appeal to first-time buyers and downsizers, and why 382 new market-rate townhomes on Route 35 will matter when they're finished. They won't be finished soon. A buyer who waits for 761 Route 35 is waiting on site plans, a Planning Board vote and possibly a state wetlands review before any construction starts. Over that same stretch, the county's existing townhouses will keep selling at around list price.
For sellers, it works the other way. A Middletown townhouse owner thinking about selling in the next year or two will not be competing with this project. The more relevant numbers are the 2.8 months of supply and the 29 days on market. Both are low enough to support confident pricing, and both have moved enough since last year that overpricing gets noticed quickly.
Questions buyers ask about the Route 35 site
Will the new homes have an entrance on Route 35? No. Under the settlement, access is only from Kings Highway East, Carton Way and Kanes Lane.
Is any retail part of the plan? The approved plan covers 450 homes. The Wegmans, theater and shops proposed under Village 35 were dropped in 2020.
Is the West Nutswamp Road project part of the same deal? No. It was a separate settlement with a different developer, Adoni Property Group LLC, for up to 136 townhomes with a 20% affordable set-aside.
If you own a home near Kings Highway East, Carton Way or Kanes Lane and want to know how this settlement affects your price, or you're weighing a townhouse purchase against a project that is still years from construction, I'm glad to go through the numbers with you. Request a free home valuation from Doreen DeMarco and we'll start with your street.
