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Newark high-rise gets $38M tax credit

- Last modified: March 2, 2011 at 3:38 PM

A project that includes what will be the tallest building in Newark received a $38 million boost from the New Jersey Economic Development Authority on Wednesday, when officials gathered with representatives from Dranoff Properties and the New Jersey Performing Arts Center to officially unveil plans for One Theater Square.


The 44-story mixed-use building, set on 1.2 acres adjacent to NJPAC, will be the first new residential construction in the city in decades, according to Stefan Pryor, the city’s deputy mayor.


One_Theater_Square_2_Dranoff_Properties_res
One Theater Square rendering.
(Courtesy of Dranoff Properties)


“What is pioneering about One Theater Square, [is] we’ll be constructing the first ground-up residential structure of significance in the city’s downtown in memory,” Pryor said.

One Theater Square will include more than 300 residential units, a fitness center, a pool and a spa, as well as more than 20,000 square feet of street-level space for restaurants and other retailers. The building’s height will be a punctuation mark on the skyline, Pryor said, yet at street level, the project will integrate with the historic adjacent structures on Park Place and Center Street.


“This is one of the most important projects that Newark or New Jersey will undertake,” he said.


The tax credit — $38 million over 10 years — comes via the Urban Transit Hub Tax Credit program, administered by the EDA and aimed at promoting investment in transit hubs in the state. Additional public and private funding for the project is still being sought.


Carl Dranoff, chief executive of Philadelphia’s Dranoff, said private and public financing is being sought to fund the remainder of the $190 million project.


“The next year is going be grunt work to complete the design of the building,” Dranoff said. He expects to break ground some time in 2011, and “this project will take two years to build from start to finish.”


Dranoff said the draw of arts and culture is essential to promoting the project to future residents. “People love living next to performing arts centers and being able to enjoy orchestra performances, jazz concerts or live theater,” he said.


Residential leasing for One Theater Square is expected to launch in 2012, Dranoff said. The retail space will be marketed to potential tenants as early as Thursday.


“There are 50,000 people that work downtown,” Dranoff said. “We expect to tap into that very rich employment base and make it easy to walk to work.”


Lawrence P. Goldman, chief executive of NJPAC, called One Theater Square the first and most important piece of the area’s transformation, which could include up to 2 million square feet of development.


“The ingredients of that are lots of density around Theater Square,” he said, including mixed-use property with offices, residential and potential new hotel space, as well as galleries, cafés, retail and entertainment at street level.


The rebirth of the neighborhood, Goldman said, calls for round-the-clock activity — not just during performances at NJPAC. “What Newark needs is a middle-class population living downtown,” he said. Of the residences at One Theater Square, 80 percent are expected to be for young professionals and empty-nesters — people with disposable, discretionary income, Goldman said.


“That will create a demand-size force for better shopping, restaurants and schools,” he said. “That is the missing ingredient in Newark now.”


He said some 20 percent of the apartments at One Theater Square are expected to be reserved for affordable housing for artists.


Pryor said the project is part of the overall development of the area around the arts center. “With the Dranoff project at the NJPAC front door and the [planned] Shaquille O’Neal residential development immediately behind, on Rector Street, there will be a true new neighborhood,” he said.


In 2008, NBA star O’Neal and Boraie Development, of New Brunswick, entered into a partnership to develop luxury condominium high-rise One Riverview on Rector Street.


NJPAC-Aerial_0909_res
Rendering of One Theater Square across from NJPAC.
(Courtesy of Dranoff Properties)


Other residential projects have come about through renovations, such as Cogswell Realty retrofitting the Art Deco office tower at 1180 Raymond Blvd. into 317 residential units. Another renovation project under construction in the city is Richardson Lofts, which will bring 67 residential units to a former jewelry factory at Columbia and Green streets.

 


E-mail João-Pierre Ruth at jpruth@njbiz.com



Follow me on Twitter @jpruth

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