The City of Bayonne announced on Friday, April 28 that it’s closed on a 30-acre development on the former Military Ocean Terminal Base (MOTBY) with Atlantic Realty, a Woodbridge-based developer. The developer is expected to build a three-story residential building consisting of 525 units, park space, new roads, and contributed construction of the Hudson River Walkway. Construction on the development, in a section of the base called “Bayonne Bay West,” is expected to start by spring of 2018, according to a press release from Bayonne Mayor James Davis.
The land was slated to be sold for $20.7 million in 2006, but the city spent a $14 million deposit in 2007 on its operating budget. Then in 2010, after the City sold 131 acres of MOTBY land to the Port Authority to build a container port, three developers, including Bayonne Bay West, sued the City, claiming the Port Authority sale would negatively affect their property values.
The City and the developers finally settled in 2015. Included in that settlement was an agreement that Atlantic Realty would pay the City $3.7 million in the first couple of months after the closing, and after various approvals are secured.
“This is a huge success for the city, putting to bed this chapter (where) three lawsuits have…clearly stunted any development that can happen at the Peninsula,” said special counsel to the City of Bayonne, Joseph Baumann, at a City Council meeting in March of 2015, when the Council approved the settlement.
As part of the settlement, Atlantic Realty entered into a 30-year PILOT (payment in-lieu of taxes) agreement with the city. The first 10 years will pay the city 11 percent of the development’s gross revenue, then 12.5 percent for the next 10 years, then 13 percent for the last 10 years.
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“The city has unfortunately been surviving off one-shot revenues for more than a decade, and we’re slowly trying to reverse that.” – Bayonne Business Administrator Joe DeMarco
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Rush to the waterfront and public transit
Development on the base has accelerated in recent years after more than a decade of sluggish progress. In June, JMF Properties was designated a developer for Harbor Station South, Bayonne Bay West’s most westerly neighbor. JMF, and fellow Harbor Station South developer, Fidelco, plan construction to begin shortly on 16 acres of retail space and 200 residential units.
“Although this is a major development, it is part of an overall plan to redevelop the city,” Davis said in the press release. “Bayonne is beginning to see the early signs of growth.”Bayonne City Council President Sharon Ashe-Nadrowski said in the release, “After sixteen years it’s time to deliver on the promises that were made long ago and begin building for our future.”
It’s been a bumpy road for developers trying to get MOTBY projects off the ground. The deal with Atlantic Realty was finalized only after a series of lawsuits between the city and the developer were settled in early 2015. Now the city is climbing out of the doldrums of the housing market collapse in 2008 and ensuing economic recession that cowed investors and weakened property tax revenue for municipalities.
During that recession, in 2010, with the city facing a structural deficit, then Mayor Mark Smith sold 131 acres of MOTBY to the Port Authority of New York and New Jersey in the form of yearly payments. Many payments were liquidated to fill another budget hole in August of 2016 after Waitex, another MOTBY developer, dropped out of a deal in April of that year.Currently, the Port Authority and the city are in talks for Bayonne to lease back some of the 2010 land-sale for a ferry terminal.
“The city has unfortunately been surviving off one-shot revenues for more than a decade, and we’re slowly trying to reverse that,” said Bayonne Business Administrator Joe DeMarco in August of 2016 after the city council voted on liquidation. Through development, the city hopes to stabilize its tax revenue stream.
Now, developments on MOTBY and in Midtown near the 22nd Street Light Rail Station are all poised to break ground on high-density residential development.While industry continues to trend away from urban centers, Bayonne, a one-time industrial town, continues its transition.
Ferry survey goes live
Bayonne commuters’ wish for more public transit options is in the granting process. In late February, city officials and the Port Authority of New York and New Jersey (PA) agreed to perform an impact study to determine future demand for a ferry slip on the former Military Ocean Terminal Base (MOTBY), a necessary step for Bayonne to gain greater access to Manhattan.
Residents are encouraged to take the survey at https://www.surveymonkey.com/r/bayonneferry. If and when the city can lease back suitable land, it will enter into negotiations with a ferry service; the PA does not operate its own ferries.
Rory Pasquariello may be reached at roryp@hudsonreporter.com.
