Come stay in JC -- Several new hotel projects underway

Ricardo Kaulessar - Hudson Reporter 09/22/2006

HAVE TO PAY MORE TAXES ? The Doubletree Hotel on Washington Boulevard is one of the hotels in Jersey City that will be affected by a change in the city?s hotel tax law.
Several hotel projects recently have broken ground or received approvals from the Jersey City Planning Board.

The city already has 15 hotels, motels and boarding houses, frequently populated by business travelers to North Jersey and New York City.

There are two new hotels planned in the near future, as well as an extention to an existing hotel and possibly another hotel in Journal Square.

Among the upcoming projects are the Newport Westin Jersey City Hotel, a 429-room building located on the corner of Washington Boulevard and Sixth Street and Thomas Gangemi Drive.

There are also plans for a 300-room Hilton hotel in the Liberty Harbor North redevelopment area off of Grand Street.

In addition, the Doubletree Hotel at 455 Washington Blvd. will be getting more retail space and frontage.

The Harwood family of Jersey City, which is redeveloping Journal Square, is considering a hotel there.

Hotel tax

In addition, a recent change in the city's hotel tax will make hotel owners pay tax revenues to the city directly instead of deducting the monies from real estate taxes.

On July 28, the New Jersey State Legislature passed the bill that allowed for Jersey City as well as Newark and Elizabeth to directly collect the revenues from the six percent hotel tax, which taxes a hotel's occupancy. Hotels also pay a 6 percent sales tax to the state.

Two weeks ago, Gov. Jon Corzine signed the bill.

The Jersey City council introduced their own ordinance at their council meeting on Aug. 16 to change the hotel tax.

They passed it at a subsequent meeting.

429 rooms in Newport

The Newport Westin had been in the works since 2000, when the Marriott Hotel chain planned to build at that site.

On June 1, there was a groundbreaking at the Washington Boulevard and Sixth Street site with Jersey City Mayor Jerramiah Healy, Jamie LeFrak of the LeFrak Organization, representatives from the Westin Hotels chain, and other city officials.

At a recent Jersey City Planning Board meeting, Bill Wissemann, a project engineer for Newport Associates Development Company, presented changes to the site plan for the Newport Westin.

They plan to increase the number of rooms from 414 to its current number of 429, decrease the height of the building by one story, and modify the building facade.

Wissemann told the board that pilings for the hotel's foundation have already been placed in the ground and construction is expected to be completed by next fall.

The Hilton

The next major hotel project underway is the 300-room Hilton hotel to be built in the Liberty Harbor North redevelopment area in Downtown Jersey City. The plan includes one million square feet of hotel space, 6,500 units of market-rate housing, 750,000 square feet of retail space, 4.5 million square feet of office space, and two parks totaling about 100 acres.

The hotel will be developed and managed by the Warren, N.J.-based Tramz Hotels Group. Tarrunumn Murad, CEO of Tramz Hotels, said recently that the plans have already been drawn up for the hotel and may be presented at a future Planning Board meeting.

She was fairly confident that the project will commence before the end of this year.

"Jersey City is a strong area and the city is fully supportive of our efforts to build the hotel," said Murad.

Journal Square

As for a hotel in Journal Square, Lowell Harwood said recently that the prospect is still being explored. Harwood is a managing partner of Harwood Properties, which entered into a contract in late spring with the Jersey City Redevelopment Agency to build two mixed-use high-rise towers, which will include apartments, retail stores, and parking. The plans also include a hotel.

"We're looking for the best concept for our development.

They had a hotel before in Journal Square and that didn't work very well," said Harwood, referring to the now-demolished Hotel on the Square, which sat vacant for nearly 20 years after a fire in 1987 damaged most of the structure.

Business climate helps

What is the attraction for hotel development in Jersey City? One obvious reason is that Jersey City is right across the Hudson River from New York City, one of the world's renowned tourism sites in the world, and is easily accessible by PATH train, ferry, and car. However, there are other factors.

Murad pointed out that the Hilton will be located in a rapidly developing area in the city, becoming, as Jersey City Mayor Jerramiah Healy has said, "a world-class destination."

"Jersey City is becoming a strong market because of the proximity of tourism attractions like the Liberty National Golf Course and the Statue of Liberty, making it a great area for travelers," said Murad.

And there is the ever-present business market in Jersey City, which is home to numerous financial companies such as Goldman Sachs, Merrill Lynch, and Morgan Stanley, hence the city's nickname "Wall Street West."

Dan Frohwirth, real estate director for the Jersey City Development Corporation, said that the hotels in the city have benefited from the business climate. It has particularly helped those located near the Hudson River waterfront such as the Doubletree Hotel, the Courtyard by Marriott, and the "Hyatt Regency Jersey City on the Hudson" Hotel at Exchange Place.

"Many people who stay at the Jersey City hotels are not so much tourists as business travelers who are either clients from out-of-town or employees who have to stay over in Jersey City," said Frohwirth.

Ricardo Kaulessar can be reached at rkaulessar@hudsonreporter.com

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Getting what's due

Maureen Cosgrove, head of the Jersey City Tax Collector's Office, said last week that based on estimated revenues in the city's upcoming 2007 fiscal year budget, the change in the hotel tax could produce a windfall for Jersey City of $4.9 million. The city collected about $1.5 million in the 2006 fiscal year.

"For a number of years, these hotels have benefited from not having to pay full taxes, but now they have to pay up like every other taxpayer," said Cosgrove.

Not everyone is looking forward to the change in the hotel tax. The LeFrak Organization pointed out recently that their yearly taxes would go up threefold from 253,772 per year to $887,676 per year for their Courtyard by Marriott expenses. - RK