The New Jersey Economic Development Authority approved $99 million in new Urban Transit Hub tax credits this morning, essentially exhausting the $100 million set aside last year for residential projects.
The $297 million College Avenue redevelopment project in New Brunswick, the $125 million redevelopment of the Hague and Criterion buildings at the former Jersey City Medical Center, and the $203 million Journal Square redevelopment in Jersey City each were awarded $33 million grants over 10 years.
The projects were among 11 submitted to the agency as part of a competitive application process set up last year to award the $100 million to residential projects with mixed-used components.
Together, the projects will leverage some $625 million in private investment and add 1.5 million square feet of residential space, 48,000 square feet of commercial space and 163,000 square feet of academic space, while creating roughly 1,600 construction jobs and 70 permanent jobs.
Agency CEO Michele Brown noted the diversity represented by the projects. The College Avenue project is a partnership between New Brunswick Development Corp., Rutgers University, the New Brunswick Theological Seminary, Rutgers Hillel and Citibank. The Jersey City Medical Center project will put back into use a pair of buildings that have sat vacant for 20 years, and the Journal Square project has a transit focus, adding a residential tower adjacent to the Journal Square PATH station.
“So we think they’re entirely consistent with what we’re trying to achieve with these programs, which is to emphasize development in urban areas where we need it,” Brown said.
The EDA’s actions come amid intense discussion at the Statehouse over the future of the state’s portfolio of incentives.
Widely supported legislation known as the Economic Opportunity Act of 2013 would fold the state’s present portfolio of five programs (including Urban Transit Hub) into two, Grow New Jersey and the Economic Redevelopment and Growth program. Though the bill has broad support, it’s unclear when it will become law. Some advocates say the bill needs to be passed as quickly as possible, because the EDA could soon run out of its existing funding for its current programs.
Tim Lizura, EDA’s president and chief operating officer, said just under $200 million remains in the fund that covers the Grow New Jersey program and the commercial side of the Urban Transit Hub tax credit program.
Al Koeppe, the EDA board’s chairman, said the matter is in the hands of lawmakers at the Statehouse, but he said incentives are important.
“We need jobs in this state,” he said. “You can see the number of jobs that came out of today’s decision. So if you believe that that’s a challenge in this state, then public policy that starts to address it, I think, should be implemented sooner rather than later.”
The College Avenue project will create a 500-bed residential space to house Rutgers’ Honors College and 130 student apartments, as well as a new 162,000-square-foot academic building, retail space, parking and a public plaza. It’s being developed by a public-private partnership led by Devco.
The Beacon Redevelopment, in Jersey City, is being developed by BR and would redevelop two former medical center towers into 479 residential units and commercial space. At 1.5 million square feet, it represents the largest historic redevelopment project in the state.
The Journal Square project, meanwhile, will add 540 new rental units to the PATH station area, as well as 3,160 square feet of retail space. The projects’ developer is Journal Square Associates.
Brown said while the program rules allowed the authority to fund up to 35 percent of capital costs, none of the projects got that amount, because individual awards were capped at $33 million, and each project’s total costs were well in excess of $100 million.
“That’s great math for the state,” she said.
The program also came with the geographic limitation that no more than two chosen projects could be in the same city.
As it happened, however, seven of the 11 applications received didn’t meet the eligibility requirements of the program. Of the four that met the requirements, three were from Jersey City, as were two of the three eventual winners.
A common facet of nearly every application deemed insufficient was a lack of documentation of financing commitments. Lizura said applicants needed firm commitments for the project’s entire financing in order to advance in the application process.
“If this was two years ago and we were running through the process, we would work with the applicant getting approval and work with their financing entities,” he said. “But since we were doing a competitive process — it really had to be black or white. And what was important was we wanted projects that were ready to get into the ground.”
All of the winning projects are set to begin construction this year.
Murray Kushner, chairman of Kushner Real Estate Group, the developer of the Journal Square project, told the board the money awarded Tuesday was critical.
“But for your help and the help of Jersey City and the state of New Jersey and the Port Authority, this project never would have happened,” he said.