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Off the waterfront: Incentivizing new growth in Jersey City

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Marcos Vigil, Deputy Mayor of Jersey City.
Marcos Vigil, Deputy Mayor of Jersey City. - ()

Jersey City wants to broaden its development plans and is looking at a variety of ways to do so. And with Mayor Steve Fulop's re-election recently secured, the game plan at City Hall is to encourage a replication of the success downtown and along the waterfront with projects in the city's western sections.

“We’ve been trying really hard over the past years to let people know that you either go in with what they have or they have to give the community benefits,” Deputy Mayor Marcos Vigil said. “We would like to see construction happen and incentivize construction outside the waterfront. That doesn’t mean we’re not going to make deals at the waterfront if they are good projects and they have good benefits.”

Legal battles over Public Labor Agreements and the city’s affordable housing requirements for PILOT agreements in the downtown area have led to drop in demand for tax abatements; however, Jersey City still is working with developers. An example is L+M Development’s 25 Columbus project, a 750-unit residential tower and privately funded public school that was recently acquired by Mack-Cali. The city negotiated a tax abatement with the developer, with L+M agreeing to include 5 percent affordable housing and build the school.

Where developers want to build plays a role in creating deals. The Bergen-Lafayette neighborhood located west-southwest of downtown is an area where the city has encouraged development. 

“[Bergen-Lafayette] is a Tier-3 Zone, where [developers] can get a 20-year tax abatement right out of the gate,” Vigil said. “In January, we might revise the policy since there is going to be a new council and they may want to tweak things depending on how we’ve progressed along throughout the whole city.” 

Along with costs and tax incentives, Jersey City has pushed to make Bergen-Lafayette a high-density, transit-oriented community for families.

Stimulating development

Whereas tax incentives have been used in locations such as Bergen-Lafayette and Greenville, the application of the 2009 New Jersey Economic Stimulus Act has brought good fortunes for New Jersey City University and the master redevelopment plan for its West Campus that’s being spearheaded by joint-venture partners The Hampshire Cos. and Claremont Cos., along with Circle Squared Alternative Investments and KKF Enterprises. 

These organizations have been involved in the development of NJCU’s University Place, a mixed-used development of residential and retail space. This $400 million project is a public-private partnership.

Last spring, the partners broke ground on University Place, which is expected to deliver 639 market-rate units and 30,000 square feet of retail space. Plans for a supermarket and performing arts center also have been proposed for the site.

“We liked the whole idea of this master plan and we liked the idea of creating a college town in the city and that is basically what NJCU envisioned,” said Richard Sciaretta, director of capital management for Claremont Cos. “[NJCU] spent quite a bit of money and time over 10 years cleaning up the site and putting the infrastructure in. They basically delivered pad-ready sites.

“We looked to Harrison to the west and we looked to some other comparable markets that we thought it would make sense and it penciled out.”

Claremont, Hampshire and Circle Squared delivered a 70-unit multifamily project in Westfield this year.

In Jersey City, the partners will deliver 338 units and 20,000 square feet of retail spaces across two buildings at the NJCU site.

The project is set to rise alongside KKF’s portion that broke ground this year. KKF will deliver 301 market-rate apartment units and 11,000 square feet of retail space along West Side Avenue.

“The P3 legislation has earned economic development,” NJCU Chief Operating Officer Aaron Aska said. “Without that legislation, it will hamper and stymie some of our efforts because in order for us to keep our tuition at $700 and affordable, we need people like [Claremont] and the private industries to partner with us.”

Aska said he hopes the incoming Murphy administration reinstates legislation that has allowed other universities such as Rowan and Montclair State to see exponential growth.

By next spring, Claremont expect to complete the first phase of its development, 163 luxury units and 10,000 square feet of retail, and break ground on the second phase.

“If [University Place] is done successfully, I think people would look at NJCU as a whole different place,” Sciaretta said. “This is Aaron Askas’s vision well before [Claremont] entered the picture. We hope they do play off each other.”

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Mario Marroquin

Mario Marroquin

Mario Marroquin covers real estate. A native of El Salvador, Mario is bilingual in English and Spanish. He graduated from Penn State University and worked in Pennsylvania before moving to New Jersey. His email is mariom@njbiz.com.

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