Newark's new wave of development is in focus at Rutgers real estate conference
With his firm slated to redevelop the iconic Hahne & Co. building in downtown Newark, Jonathan Cortell has spent much of his time in recent months giving tours of the property.
He recalls one in particular — with a woman had not been there since she applied for a job at the department store some three decades earlier.
“Thirty years later, there was very little that resembled the grand department store,” said Cortell, vice president of development for L+M Development Partners. “But she remembered it well enough, and walking through a building with life and vitality again was a connection for her she found priceless.”
That’s not an uncommon experience for the Hahne’s building, he said, and for a city that’s rich with history. And it’s why the project and Newark were highlighted last week at the New Urbanism Conference, the first major conference hosted by the Rutgers Business School Center for Real Estate.
“There seems be something not new, necessarily, about rediscovering an asset (or) acknowledging the infrastructure of a city,” Cortell said. “But the fact is that we have an opportunity here to present Newark as a model of a new urban enclave.”
The conference, held Friday at the Hilton Short Hills, included panel discussions that highlighted both the success of the Gold Coast and momentum behind redevelopment in Newark. The latter featured speakers who touched on both Newark’s challenges and the assets that are helping fuel some $2 billion worth of investment in just one section of the downtown.
“Urban redevelopment needs to achieve critical mass, rely on mixed-use solutions to real estate challenges, deploy real public-private resources and be blessed with leadership,” said Christopher Paladino, president of New Brunswick Development Corp. and moderator of the panel. “In the district that includes Military Park, Washington Park, Rutgers and the James Street Historic District in the city of Newark, these principles are truly gelling.”
Rutgers-Newark Chancellor Nancy Cantor noted that “people always start with Newark's challenges — and absolutely those challenges are there.”
She pointed to low rates of post-secondary education and relatively high poverty.
But “what people forget is that we have every asset in Newark” to help propel a turnaround: rich cultural assets, corporate anchors such as Prudential and Panasonic and community organizations. That’s not to mention tens of thousands of college students and community organizations and “the most phenomenal transportation infrastructure in the New York metropolitan area.”
All that is helping drive efforts such as the Hahne’s project, which L+M is undertaking with the Newark-based Hanini Group. The project is bringing a Whole Foods to downtown Newark and will also house a 50,000-square-foot arts center for Rutgers.
The same is true for the work being done at the iconic former American Insurance Co. headquarters at 15 Washington St., which Paladino’s organization is restoring with Rutgers-Newark to create student housing.
“What's most important is in every one of those projects, whether it's economic development, or neighborhoods or arts and cultural education, progress will be made based on cross-sector partnerships,” Cantor said.
Those projects make up a broader redevelopment effort that had years of false starts in the city. Ommeed Sathe, Prudential Financial’s director of social investments, said Newark has been hurt in part by the fact that many prime development sites are used for parking — which is at a premium there.
He also pointed to poor urban planning in the past.
"One of the distinct features you notice in Newark is that there's such a discontinuity of the street life,” Sathe said. “There’s giant parking lots all over the place, buildings are isolated from one another. They’ve been developed — I think, unduly so — but developed with tremendous fear of crime and therefore isolated from the street.”
There are also high labor costs for construction and a lack of opportunity for small-scale projects, leaving room for only large, expensive projects that “can fall apart at a moment’s notice,” he said.
But why is it working now? Sathe pointed to unprecedented leadership at institutions such as Rutgers and the state Economic Development Authority, a growing base of institutional investment and the growing cost of building and living in New York City and the Gold Coast.
It’s also because Newark has attracted strong development firms that “have this unique combination of having cut their teeth in other markets, having experience, having capital,” but aren’t so big that they can’t navigate the experience of building in Newark.
Wasseem Boraie, whose firm Boraie Development is building a 168-unit residential high-rise on Rector Street, said it’s a positive sign that Newark has attracted a group of established developers. The ability to do that is one thing the firm looks for when it builds in a city, along with demographics and the potential for institutional capital, he said.
“Anybody can put together enough subsidies that you build one project,” said Boraie, the firm’s vice president. “But to truly be a market and truly be an urban city that can build on top of that with three, four, five of the same projects, you have to be able to replicate it with good players.”
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