Spotlight 2013: Major development projects are in the works for Jersey City

By Charles Hack/The Jersey Journal
April 11, 2013 at 12:17 PM




With all the development already on the Jersey City waterfront, what's next?

Several major developments are planned or in the works.

While residential development continues to dominate new construction projects, Newport developer the LeFrak Organization is working to find a tenant for the proposed Pier 6 office development before shovels are put in the ground.

Once a tenant signs a long-term lease for the proposed development adjacent to the Newport Marina, construction can begin, Brian DeCillis, regional marketing director for the LeFrak Organization, told the recent New Jersey Gold Coast Investment Summit held at Maritime Parc in Jersey City's Liberty State Park.

Depending on the requirements of the tenant, the proposed office building would include one or two 11- to 17-story towers that would provide 300,000 to 1.25 million square feet of office space, he said.

"We have had several large high-quality companies that have expressed interest in our proposal," he said. "At this point, we don't have anyone ready to go."

LeFrak is currently building Laguna, a 158-unit residential rental building set for completion later this year or early next year near a 4.5-acre park at the north end of Newport, DeCillis said.

Since 1985, the LeFrak Organization's $2.5 billion Newport project has delivered 4,700 residential units, 5 million square feet of office space, 616 hotel rooms and 1.7 million feet of retail space on the 400-acre site.

Elsewhere, development partners Ironstate Development Co. of Hoboken and Kushner Real Estate Group of Bridgewater are constructing an 11-story, residential and retail development with 422 rental apartments, 10,500 square feet of ground-level retail space and 230 parking spaces in the 80-acre Liberty Harbor Redevelopment District, next to the Marin Boulevard Hudson-Bergen Light Rail Station.

KRE, whose previous Jersey City developments include 225 Grand St. and Grove Pointe on Marin Boulevard, also received planning permission in December to build a long-awaited multi-tower residential development in a lot adjacent to the Journal Square PATH station. The proposed development - known as Journal Square Center Towers - includes three 54- to 70-story towers with 1,840 rental units and 40,000 square feet of retail space.

Downtown, Ironstate Development and Jersey City-based Panepinto Properties plan to build 70-90 Columbus Towers at the Grove Street PATH Station with two 58-story towers delivering a 150-room hotel, 16,620 square feet of retail space and a parking garage with 1,100 parking spaces.

http://www.nj.com/jjournal-news/index ... 2013_major_developme.html

Is anybody else a little less than impressed with the design for Pier 6 office complex in Newport? I wonder why the buildings are only 7 to 11 stories. Renderings here: http://piersixnewport.com/

In Jersey City, a LeFrak Office Project Awaits a Tenant

By C. J. HUGHES - The New York Times
Published: April 17, 2012

JERSEY CITY ? The Newport neighborhood here, at 600 acres among the largest urban mixed-use developments on the East Coast, has seemed in no real hurry to be completed.

Its chief developer, the LeFrak Organization, has sometimes let years go by after finishing one building before starting another, which has occasionally given the waterside parcel, the site of defunct rail yards, a patchwork air. The last office building went up in 2003, a six-story midrise with just 90,000 square feet.

Now LeFrak is ready to break ground again. The company just announced plans for Pier 6, a project that could add up to 1.25 million square feet of office space to a nine-acre pier at the end of Sixth Street, on the southern edge of Newport.

But the company will not build on speculation. The tenant ? most likely a financial services or media company that requires a huge amount of room ? will determine the size and configuration of the buildings, said Jamie LeFrak, a principal in the company.

?We wouldn?t have stayed in business for 100 years if we were doing wild speculation,? said Mr. LeFrak, who represents the fourth generation to run a company that built LeFrak City, in Corona, Queens, and Gateway, in Battery Park City, among other major projects.

The Pier 6 site could handle a single 17-story building, which one tenant would occupy. Or, if there were demand for a smaller building, LeFrak would build on half the site, though the tenant would have to commit to taking at least 300,000 square feet to make the project financially feasible, Mr. LeFrak said.

Started in 1986, Newport now includes 14 apartment buildings, 7 office buildings and the Newport Centre Mall, as well as shops, playgrounds and a waterfront walkway, though there are still dozens of empty parcels. While 13,000 people live there today, LeFrak says the eventual population of the $10 billion project will be twice that.

The Pier 6 site, which a century ago contained a sheep slaughterhouse, is now used mostly for storing construction equipment and trees for other sites; there is also a helipad there, which will be retained. About a five-minute walk from the Newport PATH station, the site also has front-and-center views of One World Trade Center, rising across the river in Manhattan.

Office rents at Pier 6, which is expected to cost $100 million to $300 million to build, will most likely be far below Manhattan?s, Mr. LeFrak said. In the first quarter of 2012, the average asking rent along the Hudson waterfront in New Jersey, which includes Weehawken and Hoboken, was about $38 a square foot for state-of-the-art office space, versus close to $70 for comparable space in Manhattan, according to Cushman & Wakefield.

And, if the tenants in the new buildings qualify for New Jersey?s Urban Transit Hub Tax Credit program, which was created to encourage development in nine cities near subway and train lines, the rents could effectively be around $20 a square foot or less, brokers said. But Mr. LeFrak said that if the tenant spent enough on construction, those rents could be closer to zero.

Then again, most of the credits in the four-year-old, $1.5 billion program have already been spoken for, according to the New Jersey Economic Development Authority, which administers the program. All applications are currently being reviewed, however, which could free up funds, a spokeswoman said. The State Legislature could vote to expand the program and is now considering a bill to that effect.

Still, even without those credits, Pier 6?s economics are compelling, said Gil Medina, a former state commerce secretary and a current Cushman broker who has worked with LeFrak in Newport in the past. The Hudson waterfront vacancy rate has been below 10 percent for years, a sign of a healthy leasing market, Mr. Medina said. Mr. LeFrak said the company?s office towers had a 2 percent vacancy rate.

Among recent large leases, Citigroup last year added to its presence at 480 Washington Boulevard, a 32-story LeFrak high-rise, leasing 46,000 square feet. Its neighbors there include UBS and Soci?t? G?n?rale.

This year, according to reports, Fidelity Investments will finally consolidate some of its operations, including bringing workers from Manhattan, into a four-floor berth at 499 Washington Boulevard, a 14-story tower that also has Bank of America offices, according to reports. And next year, the Depository Trust and Clearing Corporation, which plays a central backup role in stock transactions, will move the bulk of its operations to the entirety of 570 Washington, from its current address at 55 Water Street in New York.

These tenants have been drawn to Newport from New York in part by low rents ? and, sometimes, special tax deals, subsidies or grants. Mayor Michael R. Bloomberg of New York City has criticized those programs as encouraging a bidding war for jobs.

But Mr. Medina played down any suggestion of a border clash. Companies like JPMorgan Chase, which has 21 floors at 575 Washington in Newport, have relocated only support functions to New Jersey while keeping their headquarters in Manhattan, he said.

?It?s more of a symbiotic relationship,? Mr. Medina said. ?We are definitely tied together economically.?

While it might have been a sleepy decade for LeFrak on the office front in Newport, the company has been busily adding residential units. In 2007, it completed the Shore Club, a sprawling 400-unit condo complex on River Drive. A few years later, it developed Aquablu, a 300-unit rental building with tinted windows across the street. Rising next to it is Laguna, a 150-unit rental building to be completed next year.

A new park, with playground equipment and immaculate lawns, sits across the street, by the mouth of the Holland Tunnel. In a sign that there is still room for Newport to grow, it brushes up against a desolate industrial parcel that contains a cement plant.

Even if Newport still has a long way to go, the project has been a success so far, said Robert Cotter, the director of the Division of City Planning in Jersey City and an author of the redevelopment plan that allowed it to happen.

In some ways, Newport was a bold experiment, he said. Previous master-planned developments created separate zones for businesses and homes. In Newport, though, Jersey City encouraged an integrated layout, which creates a livelier streetscape, and which the Pier 6 project should only enhance, Mr. Cotter said, adding that the slow and steady pace was understandable.

The LeFraks? timing ?was cyclical in response to various rises and falls in the economy, and they have lived through three recessions,? he said. ? ?Rome wasn?t built in a day? is absolutely true here.?

http://www.nytimes.com/2012/04/18/rea ... city-awaits-a-tenant.html