The real estate market in Hudson County was a mixed bag this year as new stores opened up and residential developers asked for more favorable tax deals from their city governments.
Although office space in the county boasts the lowest vacancy rate in New Jersey at 5.7 percent, according to a January report from Rutgers University, cutbacks on Wall Street are expected to have an impact on financial companies west of the Hudson River. Some may try to avoid signing long-term leases by subleasing space or by renegotiating long-term leases.
Still, Hudson County appears to be weathering the economic crisis better than other counties, particularly with its proximity to public transportation and the New York skyline. The region also benefits from Manhattan companies that want similar amenities with cheaper space across the river.
Residentially, developers of major towers in Jersey City have approached the City Council to ask for more favorable tax abatement agreements. New apartments are rising in Jersey City, Hoboken, and Weehawken.
Tax abatements were once again the hotbutton issue in Jersey City this year. Abatements and payments in lieu of taxes (PILOTs) are agreements in which developers get a set formula for paying money to the city government each year, rather than being subject to the fluctuations of property taxes. Most of the money goes straight to the city budget rather than being shared with the schools and county.
Jersey City currently has 134 tax-abated properties, with another 31 under construction. In June, the City Council renegotiated the abatement deal given to Fisher Development Associates, the developer of Crystal Point, a luxury high-rise condo building on Second Street, along the city’s waterfront. Because of the tightened credit market and the recession, Fisher had sold only 24 of Crystal Point’s 269 units and asked the city for a better tax agreement.
The City Council approved these terms by a vote of 6 to 3. The city’s Tax Abatement Committee had recommended passage, while Jersey City’s deputy director of Housing, Economic Development and Commerce opposed the ordinance.
Shortly after this victory for Fisher Development, 77 Hudson St. developer K. Hovnanian requested a renegotiation of its abatement deal and asked for the same revised terms given to Fisher. In October the council unanimously rejected the request, after Mayor Jerremiah Healy said the project’s location made the revision unnecessary for its survival in a tough market.
More recently, the City Council approved a10-year abatement for Lefrak, developer of the AquaBlu complex near Newport. This approval was controversial because typically, abatements are approved before building construction begins, since they are a tool to spur development. But building construction on AquaBlu is complete and a number of residents have already moved in.
Elsewhere along the Jersey City waterfront, not far from AquaBlu, the Westin Hotel opened early this year on Washington Boulevard. With its 20,500 square feet of event and meeting space, the 23-story Westin primarily caters to business travelers. The hotel was expected to create about 230 jobs.
In April, the boutique W Hotel opened on River Street on the Hoboken waterfront. The 25-story, 225-room hotel includes 37 luxury condos. The W condos were given a tax abatement deal for 99 years.
Built and owned by the Hoboken-based Applied Development Company, the W is operated by Starwood Hotels & Resorts.
After a few delays, a new Clearview Cinemas theater opened in October on 14th Street, between Adams and Grand under the viaduct bridge. The five-screen, 20,000-square-foot theater is Hoboken’s only movie house.
While most of Hoboken’s major developments were completed before this year, there are some still underway. The Applied Companies are building a new residential building at Fourteenth and Hudson streets as part of its Shipyard Development Project on the north waterfront.
On the south end of town, NJ Transit wants to build an office tower and hundreds of condominiums near their train terminal. This proposal will be a major subject in Hoboken in 2010.
Phase II of Xchange at Secaucus Junction, near Laurel Hill Park and the Frank R. Lautenberg Rail Station, continued this year. The second stage of a four-phase housing development in the south end of Secaucus, Xchange will ultimately include 2,116 units of housing, about 521 units of that for affordable housing.
Phase I of Xchange, which included 721 units, was completed last year. Phase II is scheduled to open in 2010.
Union City High School moved into its new 360,000-square-foot digs on Kennedy Blvd. at the beginning of the 2009-2010 school year. The new school building is now home to the combined Emerson High School and Union Hill High School.
The complex features 66 classrooms, a media center, a courtyard, and a 990-seat performing arts center. Another unique feature of the facility is a rooftop athletic center that includes three acres worth of ball fields and can seat 2,100 spectators.
Toward the end of the year North Bergen saw the opening of a shopping complex that had been in development for several years. Located along Bergenline and Tonnelle avenues between 88th and 91st streets, the complex will feature 200,000 square feet of retail space and is expected to generate more than 800 jobs. Walmart opened one of its “supercenter” stores at the shopping center, as did food wholesaler BJ’s. Staples, PayLess, and T-Mobile are among the retailers scheduled to open stores early next year.
Elsewhere in North Bergen activists protested another retail development across from the Palisades Medical Center, proposed by Avak Properties and U&G Development. The proposed development calls for three stores to be built on land that was purchased from a private auction last year.
Over the summer it looked as if construction on the site would be stopped after the Hudson County Department of Parks, Engineering, and Planning determined that the development could overwhelm the water and sewer systems and would be built on a 71 percent steep slope. Residents protested the development after the Parks, Engineering, and Planning Department raised these issues. Despite these concerns, the development was granted an “extraordinary hardship” variance and construction was allowed to continue.
A coalition of residents and activists has filed a lawsuit to block completion of the project.
Developers Lennar Urban and Roseland Properties are building a community, Henley on Hudson, on the waterfront. Located at 2 Henley Place, the development will ultimately include 164 condos and brownstone-style townhouses. Seventy-five percent of the units are sold.
This past year, Roseland Property neared completion of the $1.7 billion planned community known as Port Imperial, which is being developed in several phases.
When fully completed, Port Imperial will span two miles of Hudson County waterfront from Weehawken through West New York to the southern tip of Guttenberg. Final plans call for approximately 6,500 units of housing and two million square feet of commercial development including retail and office space.
Much of the residential housing – 4,360 units – is already completed in West New York, and is known simply as Port Imperial.
Port Imperial South, in Weehawken, includes 1,632 units of housing, some of which are still under construction.
Envisioned as a self-contained small city, a hotel and recreation facilities are also planned for the site.
West New York
Approximately 4,360 units of housing have been built as part of the aforementioned Port Imperial project, a luxury project that runs from Weehawken through West New York on the Hudson River waterfront. There are still some units being added in Weehawken.
The massive redevelopment of the former Military Ocean Terminal continued. Now known as the Peninsula at Bayonne Harbor, the site will eventually be home to residential, commercial, and office space spread across six planned districts: the Loft District, Harbor Station, Bayonne Bay, the Landing, Bayonne Point, and the Maritime Industrial District.
Last spring, residents began moving into the 577-unit apartment complex developed by Trammel Crow at the Peninsula. Meanwhile, two other firms, Fidelco/Roseland Realty and Bayonne Bay Assoc., jockeyed for the right to develop other portions of the Peninsula.
Officials also unveiled a new docking berth last spring which will be used by the Royal Caribbean cruise ship line and other companies.
Redevelopment of the 430-acre site is expected to continue for up to 15 years.
In addition, government officials, including outgoing Gov. Jon Corzine and Bayonne Mayor Mark Smith, were on hand in October for ground breaking of the Bayonne Crossing Shopping Center. Loew’s Home Improvement, Walmart, and Best Buy are among the anchor stores that have signed leases for retail space in the 360,000-square-foot mall.
The mall, located on Route 440 between New Hook Road and East 22nd Street, is expected to generate 1,200 construction jobs and about 800 to 900 permanent positions.
The $80 million project being developed by the Cameron Group received a $23 million state loan. In September, the Bayonne City Council agreed to guarantee the loan, which gave the developer the ability to apply for a low-interest loan from the New Jersey Environmental Infrastructure.
Local officials expect Bayonne Crossing to generate $1.2 million in tax revenue and up to $4 million in Urban Enterprise Zone money for the cash-strapped city. The shopping center is scheduled to open in late 2010.
Has Xanadu become a white elephant?
Visitors to the Meadowlands Sports Complex in East Rutherford can still enjoy horse races, pro-basketball, and NFL football games. What they still can’t enjoy are rides on a 287-foot Ferris wheel, skydiving, or an indoor skiing area next door.
No one will admit it on the record – not publicists, developers, or leaseholders – but behind-the-scenes, people in Northern New Jersey are questioning whether the proposed $2.3 billion Xanadu entertainment complex is dead.
Originally expected to be financed by the Maryland-based Mills Corp., Xanadu ended up being backed by Colony Capital, a private equity firm. After it became apparent that Mills would be unable to finance the project as planned, Colony Capital took over in August 2006, committing up to $500 million of equity. Colony also arranged for construction loan financing to help fund construction costs.
The retail/entertainment/sports complex along Route 3 was supposed to open its doors last year. The 2008 debut was then pushed to August 2009, then again to 2010.
The massive complex, which is supposed to feature five theme-oriented shopping and entertainment districts, was envisioned to be a cross between an indoor theme park and a mall. The complex will have a total of 4.8 million square feet, with 2.3 million square feet available for lease, an aquarium, an indoor snow dome, two skydiving tunnels, movie theaters, and up to 200 stores.
Last year, restaurants, retail stores, and entertainment attractions jumped on board to join the attraction that developers said would redefine leisure time in the Northern New Jersey/New York City region. The Cheesecake Factory, Benihana, Legoland, and Cabela’s were among the restaurants, stores, and attractions that signed leases at Xanadu last year. But now many are wondering whether any of this is still realistic.
Early this year, State Sen. President Richard Codey told an audience at the New Jersey Meadowlands Commission that Xanadu was “the mistake of the Meadowlands.”
For now, everyone is waiting to see what new Gov. Chris Christie will do. Christie got elected on the promise that he would cut spending, reject spending increases, and tighten New Jersey’s collective belt.
Next year Gov. Christie will appoint a new chairperson to the New Jersey Sports and Exposition Authority to replace Chairman Carl Goldberg. No one expects any major announcement regarding Xanadu until that appointment is made. –