July 28, 2006

Civic JC
PO Box 248
Jersey City, NJ 07303-0248

It is now official. If you are a developer in Jersey City and can afford to tie up the City with litigation, you will eventually get what you want, the public be damned. That was the clear and unambiguous message sent by the Jersey City Municipal Council when, on June 28th, it voted to settle lawsuits with a developer, New Gold Equities. The settlement will allow New Gold to demolish a historic downtown warehouse and, in its place, erect up to a 67-story residential tower. Not only will this regrettable decision deal a body blow to historic preservation in Jersey City, but it calls into question the very integrity of the City?s planning process.

Ironically, this sad episode began with one of the Municipal Council?s finest moments. In 2004, Mayor Jerramiah Healy, Council President Mariano Vega, Councilman William Gaughan, Councilman Steve Lipski, Councilman Peter Brennan, Councilwoman Viola Richardson and the rest of the Council voted unanimously to approve the Powerhouse Arts District Redevelopment Plan (PAD). This visionary plan would create a lively 24-hour, intimate, pedestrian-friendly environment with loft-style residential condos and rental units, restaurants, clubs, galleries, theaters, and work/live spaces for artists in ten blocks of historic warehouses.

In approving the PAD, the Council members rightly saw an opportunity to showcase and leverage Jersey City?s rich industrial heritage. The Warehouse Historic District is one of the last intact, rail-centered manufacturing and distribution centers that once dominated the Hudson River shoreline in the 19th century and a great example of late-19th and early-20th century industrial architecture. In its day, this area was an economic giant that included Lorillard Tobacco at 110 and 111 First Street (when tobacco was so big it accounted for one third of all the United States internal revenue); the Great Atlantic & Pacific Tea Company (A & P, the first economy super store); the Butler Brothers (suppliers of Five and Ten Cent stores nationwide); and the majestic Powerhouse, which provided the electricity for the Hudson & Manhattan Railroad Company's subway (now part of the PATH system) that connected, for the first time, New Jersey and New York.

The results were encouraging. Two historic buildings were renovated as residences with an artist affordable-housing component. Several more historic warehouses were approved for renovation, along with approvals for hundreds more housing units. Artists and others interested in this life-style moved in, collectively investing more than $75 million. Two art galleries opened, with a third in the works. Prices continue to rise in this district.

Shortly after the creation of the PAD, New Gold Equities ? which owns both the standing 111 First Street historic warehouse and the since-demolished 110 First Street warehouse within the district ? filed suit, claiming procedural issues with the historic designation, spot zoning, and that their civil rights were violated. New Gold was hardly unknown, as the City had already assessed New Gold $75 million dollars in fire code violations. Until recently, the City expressed confidence in the strength of its position, its commitment to protecting the PAD, and defeating New Gold?s lawsuit. Moreover, outside attorneys that reviewed the legal cases have been emphatic that Jersey City could remedy any procedural and technical deficiencies in creating the historic district and defend the spot zoning issues. The City had already moved to have the civil rights violations dismissed. Thus, the abrupt and unexpected June 28 vote to settle the lawsuits represented a dramatic reversal in City policy. (To their credit, Councilwoman Richardson remained consistent in opposing the settlement and was joined by first-term Councilman Steven Fulop.) The City?s corporation counsel, Bill Matsikoudis, provided no outside legal opinions in support of the proposed settlement.

The scope of the settlement is breathtaking. It would immediately allow for the destruction of an historic warehouse. It would dramatically ?up-zone? New Gold?s properties, permitting a potential 67-story tower where historic 111 First Street now stands. It will allow a 40-story building across the street at 110 First Street. It eliminates the 10% affordable artist housing requirement. The settlement effectively guts what was to become the cultural heart of Jersey City.

Beyond the immediate damage to the PAD, the City has lost all credibility as an enforcer of its own redevelopment plans and zoning ordinances. What developer will now feel constrained by those pesky zoning laws when they?ve seen that the City will fold when hit with a lawsuit? When combined with the Municipal Council?s near-unrestricted granting of tax abatements to any and all developers who request them, it is hard to see how the Council will be taken seriously on development issues.

It is clear that the very future of city planning in Jersey City and the credibility of Jersey City?s elected government is at stake. We call upon the Municipal Council to stand behind its own vision of turning the PAD into a vibrant cultural center that preserves Jersey City?s architectural heritage. Civic JC calls on the Municipal Council to rescind its June 28 vote, vote down the amendments to the redevelopment plan, and to enforce its own zoning laws.

Daniel Levin, president
Civic JC
201.792.3386