Hot Spots for Development

New Jersey Business, Mar 2008 by Prior, Jim

Despite the national economic doldrums, the prime mortgage debacle and soaring gas and energy prices, development and redevelopment continues across the state in key core areas in the form of hospitals and entertainment centers, sports venues and casino-hotel emporiums, and transit villages and downtown rejuvenation projects. New Jersey Business has selected 10 such "hot spots," or districts of development that are now burgeoning with building projects or have the potential for near-term development.

Tim Comerford, area development manager for Public Service Electric & Gas, Newark, says the recent Urban Transit Hub Tax Credit Act, which Governor Jon Corzine signed into law on January 13 (and which received very little press because of the avalanche of bills), will be an unprecedented catalyst to economic growth in New Jersey's cities. "It could mean, for example, a million square feet of development in New Brunswick alone," says the veteran real estate development executive. "It is certain to boost development and the economy."

The law offers tax credits of up to $75 million for companies that build or lease offices in urban centers within a half mile of a transit station. When first introduced, the act required that urban centers had to: qualify for state aid; have at least 30 percent of property values exempt from local property taxation; and have a per capita annual income below $100,000. Eight urban centers were listed: Jersey City, Camden, Trenton, Newark, New Brunswick, Paterson, Elizabeth and East Orange. Hoboken was given an exemption because its residents earn more due to the recent regentrification. The first five named cities make our list of the top 10 "hot spots" for development.

New Brunswick

Perhaps the state's hottest spot for development is New Brunswick, the governmental seat and "The Hub" of Middlesex County, and more recently the "Health Care Center of New Jersey." The city has a unique cooperative triad of officials - led by Mayor Jim Cahill, university administrators headed by Rutgers President Richard L. McCormick and the corporate community spearheaded by Johnson & Johnson - teaming up to revitalize this city of 50,000 people. The cohesive cement binding these powerhouses together in building the city is the tax-exempt Devco (the New Brunswick Development Corporation), headed by President Christopher J. Paladino, which has overseen more than $1.6 billion in investments, making New Brunswick the fastest-growing urban center in the state.

Devco, which serves as the catalyst for public and private investment in the city, currently has under development some 2.5 million square feet of redevelopment projects representing more than $450 million of new investment.

Its economic influence can be seen in the myriad of new hotel rooms, conference centers, research complexes, offices, transportation facilities and a phalanx of rental apartments and condo residential units for a cross-section of incomes. The city has a strong hand to play because of its location on the Raritan River, astride the Amtrak/NJ Transit lines, a pro-development city government, a collegiate (town and gown) atmosphere and the strong J&J anchor.

Paladino points to three major projects among a number of developments as indicative of the ever-evolving city: the $125-million Heldrich Hotel & Conference Center which opened a year ago; the planned $150-million Gateway Project with 208 condo residences and a nine-story, 656 parking-space tower; and the 18-story Stem Cell Institute of New Jersey, for which ground was broken a few months ago. These and other Devco projects are giving the city a critical mass of interrelated disciplines from fine dining and educational facilities to artistic enterprises and transportation improvements.

The Heldrich is a 12-story, 248-room hotel and conference center on a triangular 1.8-acre tract across from The State Theater and Rutgers University. The Residences at the Heldrich, featuring 48 condominium homes, is accessibleby a private lobby and elevator in the complex. Paladino says about 25 of the residences have been purchased already at prices ranging from $350,000 to $500,000. The convention center has already pre-booked events through the year. "It has been an enormous success," says Paladino.

Paladino says plans have been filed for the Gateway Project, a multi-use complex of 208 condominium residences, parking garage, the Rutgers University Book Store and university press as well as 20,000 square feet of retail shops. The 44,000 square-foot book store will be located on three floors. "We anticipate a 28-month build-out," he says. He points out that the Gateway will be a gateway to both the city and university from the train depot, thus creating a transit village hub with multi-uses. Devco is working with New Jersey Transit to improve the train depot platform and ingress-egress to make it a seamless journey from train to the Gateway, university and downtown. The new Urban Transit tax act is certain to add impetus to New Brunswick's plans.