It's hard to imagine an economic engine spring- ing alongside the rail yard and parking lots on the south side of Hoboken's Observer Highway. But when executives at NJ Transit and LCOR Inc. look at the land, they see a multiuse transit-oriented development on a site that Kurt M. Eichler, an LCOR principal, calls “the best in the country.”
LCOR, the project's master developer, has been working with the transit agency for seven years to craft a plan that will take advantage of the site's prox- imity to a unique range of transportation modes: Hudson River ferry service; the PATH subway; and NJ Transit's regional rail, light rail and bus services.
"We don't believe there's any other place in the country where there's a series of five modes," Eichler said, adding that as many as 50,000 commuters pass through the site each day. "There's just no way to rep- licate that."
The project is the first on which NJ Transit has worked so closely with a private developer on land owned by the agency. NJ Transit Executive Director James Weinstein said the proposal resulting from this partnership strikes the right balance of fitting into the character of the city while serving the in- terest of taxpayers and businesses statewide. "We think that LCOR's proposed plan for this achieves those things in a way that will stand the test of time when it's completed," he said.
But the proposed 2.9 million-square-foot devel- opment, which would feature a series of office and residential high-rises spread over eight sites, faces opposition from the city. Mayor Dawn Zimmer has introduced a plan, to be reviewed by city council, lim- iting development to 2 million square feet.
While all parties remain hopeful an agreement can be reached that will bring new life to the area Subscribe to NJBIZ: call 866-288-7699 near historic Hoboken Terminal, the coming weeks may prove crucial to the future of the area.
Zimmer said development of the land "would be fantastic, "but such a project must follow the city's guidelines — and the residential component, with the ensuing traffic it would generate, is cause for concern.
"It needs to be done in a way that does not destroy the character of the city of Hoboken," said Zimmer, who was elected mayor after opposing an earlier version of the NJ Transit/LCOR plan that proposed more than 9 million square feet of development. "They want to create essentially a wall of residential along the southern bor- der of Hoboken, and I'm concerned that it's just too much residential."
Brent Jenkins, development direc- tor for LCOR, said the public-private proposal calls for an additional access road between the project and the rail yard, to help alleviate those traffic concerns. The project also would add retail space to unused sections of the historic terminal, create a newbus terminal with bays similar to those at the Port Authority Bus Terminal and close Hudson Place to street traffic.
The two sides also differ on whether city officials should consider $100 million in private investment in transit upgrades as a public benefit to the city in weighing whether to agree to the proposal. LCOR executives point to a study that the project would create 11,000 jobs, $32 million in annual income taxes, $15.5 million in annual property taxes and $32 million in additional local consumer spending. But Hoboken officials said they need proof to back up these assertions, and want the project to contribute to a city open space fund that would provide amenities nearby.
Hoboken real estate broker Kevin Helinski, of Chelsea Realty, is excited about the prospect of the NJ Transit/LCOR development.
"It's a great opportunity to get Hobo- ken development back and create a lot ofjobs," Helinski said, adding that develop- ment in the city has slowed dramatically in the past five years. He said business — which ranges from commercial leasing, to residential sales and rentals, to property management — would see an indirect benefit from increased economic activity nearby.
Lucy Vandenberg, executive director of PlanSmart NJ, said it is important that residential development be at a sufficient level to create the lively street life needed for successful transit-oriented develop- ments. She added that the plan must be economically viable.
"We think this is an incredible op- portunity to get it right," she said. "In our view, that means a good mix of residen- tial and commercial development within walking distance of the transit."
It has other statewide advocates. Joseph A. McNamara, director of the New Jersey Laborers' Employers Cooperation and Education Trust, said in a statement that it would bring needed jobs.
"I am confident that a mutually agreeable solution will be found," he said. "If it is not, a real opportunity for smart growth will be lost."
Eichler, of LCOR, said he hopes an agreement can be reached soon so that construction could start in January 2014.
Weinstein called the project a one-of- a-kind chance.
"Any property like that — that is on the Hudson River, in a community like Hoboken, that really cares about its future and respects its past, and has the Manhat- tan skyline as its backdrop — is clearly a unique property," he said.
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