The New Jersey Economic Development Authority (NJEDA) wrote a letter to the Jersey City Redevelopment Agency Friday threatening to pull funding for the city’s controversial Pompidou Museum project unless the JCRA cleans up its books.

The Centre Pompidou x New Jersey project aims to create the Garden State’s own version of the Paris museum and serve as a key catalyst in the city’s Journal Square revitalization.

The proposed museum once again received funding in last year’s state budge. The $24 million came late in the process. At the time, Republicans highlighted the funding an example of a backroom, “Christmas tree” item and excessive spending by Democrats.

In the letter obtained by NJBIZ, NJEDA Chief Executive Officer Tim Sullivan wrote to JCRA Executive Director Diana Jeffrey expressing his concerns about the agency’s finances and budget shortfall.

“Thank you for sharing the updated operating model outlining the revenue and expense projections on March 28, 2024. We have taken time to review the plan in depth, and it is evident that strides have been made in identifying funding sources, including state appropriations and potential tax credits under the recently enacted Cultural Arts Incentives Program,” Sullivan wrote. “However, it is also apparent that the persistent operating gap continues to pose a substantial challenge. Based on the information you provided us, JCRA has identified annual revenue of slightly less than $4 million annually, and recurring expenses of slightly less than $23 million – for an annual operation shortfall of approximately $19 million.”

Mind the gap

Sullivan noted the prior collaboration to bring the CPxNJ project to life. He expressed the state’s excitement about the project, which offers a potential transformative impact for Jersey City and the larger area.

“While are eager to continue working with you on the CPxNJ project, the annual operating gap remains too significant to release any funding at this time,” Sullivan continued. “As you know, none of the $34 million appropriated to the project via the NJEDA has been released due to the lack of balanced sources and uses and operating plan. With federal funding deadlines looming and state budget process underway, it is clear that we must meaningfully narrow this gap.”

The NJEDA is giving the JCRA one month to provide an updated revenue and expense model for the project that rectifies the annual deficit.

“If JCRA cannot provide an updated model by May 26, 2024, we will have to consider whether it is more prudent for the state to use these funds for other fiscal priorities that the Legislature and the governor might identify through the budget and federal fund process,” said Sullivan. “We are more than willing to continue collaborating closely with JCRA to provide any necessary insights and support as the NJEDA firmly believes this project would be tremendously beneficial for Jersey City and the entire State of New Jersey.”

He closed the letter by stressing that the NJEDA remains hopeful that JCRA can identify “sustainable solutions that would allow the CPxNJ project to move forward.”

Update: Mayor’s reaction

The Jersey City Mayor’s Office and the JCRA did not immediately respond to a request for comment. However, Mayor Steven Fulop, a 2025 gubernatorial candidate, responded to the original NJBIZ report on Friday afternoon in a multi-point post on social media platform X, pushing back on the assertions from the Murphy administration and countering by accusing them of political retaliation for his endorsement of Rep. Andy Kim, D-3rd District, a one-time opponent of First Lady Tammy Murphy in the Democratic Senate primary.

“I’ve been the mayor long enough to know that if the state wants to kill this then it is beyond my control and we will move on but let’s be clear on the timelines and actions,” Fulop wrote. “Overall, it would be a shame for NJ to lose it but it is beyond my control. We will provide the state with the info they requested per the letter to the state released to the press today but we will also call out their actions/timelines clearly and publicly.”

The Murphy administration did not immediately weigh in publicly on Fulop’s social media posts and did not immediately respond to a request for comment.

Editor’s note. This story was updated at 9:52 a.m. ET April 27, 2024, to include Jersey City Mayor Steven Fulop’s social media reaction. Stay tuned to NJBIZ for the latest on this developing story.