Jersey City, developer aim to fill 40M funding gap and jump-start 179M Powerhouse project

A developer is pushing ahead with plans to transform Jersey City’s historic Powerhouse building into a retail and entertainment destination, but the firm and city officials are first focused on filling a $40 million funding gap for the project.Jersey City Mayor Steven Fulop this week said the developer, Baltimore-based Cordish Cos., now has a financial structure in place for the long-dormant plan. But with the extra cost of trying to preserve the 180,000-square-foot structure, he said, he expects the firm to seek state incentives to build a 40-story residential tower alongside the building.

“The goal is to renovate it into a true destination place,” Fulop said. “The challenge is that it’s a historic building on the national (and state) registry, which makes it difficult because you don’t want to do anything to disrupt the character of the building.”

He added that “There’s a limited amount of grants out there in order to close the gap — so we’re going to need some help from the (Economic Development Authority) on this.” An apartment building or hotel “would help the economics” of the $179 million project, which would add roughly a dozen restaurants and retail and entertainment space.

The plan to transform the 108-year-old Powerhouse goes back several years, but has been left on the back burner by both the city and Cordish, Fulop said. But both parties have “re-engaged it and made it a priority” — last week, the City Council authorized the city to sign a letter of intent with the firm and the Jersey City Redevelopment Agency, clearing the way for a formal redevelopment agreement.

Fulop said the plan has the potential to mimic what Cordish did in Baltimore’s Inner Harbor, where it created a destination at the site of an old power plant. Local residents have voiced concerns about building a tower at the site, but the mayor said, “Keeping the building the way it is … where it’s falling down and in disrepair — that’s not an option.”

“The community has concerns about the character of the building, and we share that concern, so we’re going to do our best to keep the character, of course,” he said. “But if somebody has an alternative idea that makes sense to close a $40 million gap, we’re all open to it.

“The good thing is that everybody is motivated to see this thing through for the first time in years, and it’s really a unique building with potential that is really significant for the city.”

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