Wendy Kelman Neu was facing a difficult crossroads.
After enduring the devastation of Hurricane Sandy in 2012 and the sudden passing of her husband, John L. Neu, in 2013, she assumed complete control of a 130-acre historic riverfront site in South Kearny.
She said she wanted to create something inspiring and impactful.
She just didn’t know what it could be.
“I’m not a real estate developer; that is not my background,” Neu said. “So I got into the habit of calling our friend Steve every morning to ask his advice.”
Steve Nislick, whom the Neus had known through their involvement with various animal rights organizations, recently had retired as CEO of Edison Properties.
“After about six months of calling him constantly, Steve finally said, ‘Why don’t I just come into your office and see if I can help?’ ” Neu said.
The two quickly paired up.
And the ensuing collaboration between Neu, CEO of New York City-based Hugo Neu Corp., and Nislick, now chief financial officer, resulted in what has come to be known as Kearny Point, a collection of more than 2 million anticipated square feet of coworking and flexible-use office space in South Kearny, a section of the Hudson County town of Kearny.
The ongoing development currently is one of the largest adaptive reuse projects in the country, representing an expected $1 billion in public and private investment into the site over a period of nearly 10 years.
“I see this as being a tremendous opportunity to make real all of the things that I care about: job creation, environmental sustainability, resiliency, respecting what has taken place here in the past and creating work environments that people enjoy, as well as a legacy for the future,” Neu said.
“This project brings together all of those values that matter most to my team and I.”
John Neu always had wanted the site in South Kearny to be restored to what was once a vibrant economic hub.
He had helped his father, Hugo Neu, grow the family scrap metal trading business — incorporated in 1947 — into one of the largest automobile crushing operations in the U.S.
The family then profited from making the crushed metal available to emerging nations for raw materials, and selling the steel and iron to countries such as China, Korea and Japan.
Around the same time, after graduating law school and beginning her career in social work at various correctional facilities, Wendy Kelman Neu began seeking employment in other industries. She landed a then-entry level job at Hugo Neu Corp. in 1980, which led to her working alongside John for more than 30 years.
Hugo Neu Corp. merged its recycling businesses with the Australian-based Sims Group in 2005, then in 2007 sold most of its shares to Sims for $800 million.
“We had very different values in terms of the environment and employee compensation, so we essentially sold our business to Sims Group,” Neu said. “We basically then had to reinvent ourselves.”
Building 78 at Kearny Point not only has reached a 95 percent occupancy rate, but 75 percent of its tenants are women- and minority-owned companies, according to Nick Shears, director of leasing for Hugo Neu Realty Management.
“I think what that points to is the barriers of entry to leasing out high-quality, affordable space in New Jersey,” Shears said. “Traditional New Jersey landlords usually require a commitment to longer-term leases, and there are significant credentials one may need to rent space.
“We are more accommodating and flexible than those landlords. And, in a way, I would say we are almost an incubator in that we not only allow small businesses to start up, but also grow from a desk into 1,000 square feet of space as they scale.”
Ashley Sullivan, building manager and leasing associate for Hugo Neu Realty Management, said that, while the company has not specifically marketed to any particular demographic, the word of mouth and visibility that come with particular tenants have helped increase and sustain diversity.
“We partner with Rising Tide Capital in Jersey City, hosting several of their company retreats here as well as having several of their graduates here in the building,” she said. “We also are starting a ‘Lunch and Learn’ series with them in order to engage more with our small businesses and entrepreneurs, to invite and encourage them to work with and partner with (the nonprofit micro-enterprise development organization).”
Building 78 — as well as most (if not all) buildings planned for Kearny Point — is a total pet-friendly environment, according to Wendy Kelman Neu, CEO of Hugo Neu Corp.
“I am an animal rights advocate, and have been so for nearly 40 years,” she said. “Our tenants love that they can bring their pets to work, and we have yet to have an issue.”
Neu said such policies may soon extend to other caretakers.
“Once Building 197 and Building 100 come online, we may have the density we need to offer more services, such as child care,” she said.
Wendy Kelman Neu, CEO of Hugo Neu Corp., said it was not difficult to obtain liquor licenses for both the rooftop event space and the Dry Docks Bistro in Building 78 at Kearny Point.
“There were pocket licenses available,” she said. “So, we figured that we would use them.”
The Neus began anew as entrepreneurial environmentalists, recycling multifarious communications and electronic technologies across the globe.
Additionally, through various subsidiaries, Hugo Neu Corp. had developed more than 9 million square feet of industrial properties in New Jersey, Pennsylvania and California over its many decades in business.
That included nearly 3 million square feet of warehouse and distribution facilities in South Kearny.
Hugo and John Neu purchased the site of the former Federal Shipbuilding and Dry Dock Co. in the 1960s for the purpose of dismantling and recycling the battleships they had purchased at government auction.
“Even though we were operating recycling businesses elsewhere, this facility organically became an industrial warehouse facility because of the nature of the buildings,” Wendy Neu said. “It was a business that did quite well, given its strategic location to (Port Newark-Elizabeth) and New York City. And, since our core business was very dependent on commodity prices, this business was able to sustain us during difficult times in the recycling industry.”
Then came Hurricane Sandy, which left the site under four feet of water and left the Neus’ tenants with millions of dollars in damage and lost inventory.
“Sandy was a rather defining moment for us,” Neu said. “But the tenants did not move out. It’s close to the port, it’s mostly used for distribution and it is a location that is very hard to find, given the market today.
“Frankly, we could have just left it as is.”
Instead, the Neus decided to demolish most of the buildings and put up newer industrial buildings for distribution and logistics purposes.
Unfortunately, John Neu, who had been serving as chairman of Hugo Neu Corp., died in February 2013 before they had begun to do so.
Wendy Neu saw an opportunity.
“With 130 acres, and having always been so involved in New Jersey, I wanted to do something that would be transformative, as opposed to the normal way of doing things,” she said.
It was one of the reasons she reached out to Nislick.
Nislick, having had prior experience with a similar concept in New York, suggested building a collection of full-service, affordable “flex” spaces for smaller tenants.
“I came to the site and said to Wendy, ‘Building 78 is really an incredible building, built in the 1920s by the Navy and just architecturally wonderful.’ ” Nislick said. “I said to her, ‘Why don’t we try to divide it up into small office spaces and build an entrepreneurial center?’
“She said, ‘Do you think people will relocate to South Kearny?’ I said, ‘Sure, why not? It is a phenomenal location.’ ”
With that, Kearny Point was born.
Nislick said he and Neu initially were met with disbelief that they would want to build office space in South Kearny.
“But I know that there is always demand for quality small space,” he said. “You cannot build enough space for tenants between 200 square feet and 3,000 square feet, particularly those coming from New York paying two to three times what we would charge.”
Small tenants, Nislick said, often are inherently disadvantaged in finding quality small space due to landlords’ avoidance.
“This business requires you to provide services as (information technology), phones, Wi-Fi, 24/7 access, package delivery and receipt for tenants, all of which don’t sound important but are absolutely critical to the success of small tenants,” Nislick said.
With the understanding of the added responsibility of being an owner-operator, Neu and Nislick forged ahead with the project.
“We began this project with our own money, since it was really proof of concept,” Neu said. “People thought we were crazy, but I was prepared to do it and be able to show that this was something that could work.”
The project soon showed it was something the state needed, too, Nislick said.
“New Jersey has its own creative engine — it just needs a place to go,” he said. “If it doesn’t come to places like this, it will wind up in New York.”
You know the line: If you build it, they will come. Turns out that’s as true in Jersey as it is in Iowa.
Within a year and a half — and without the use of brokers, Nislick said — Kearny Point’s first building, Building 78, has reached 95 percent occupancy, with more than 162 present companies.
“The whole business has been driven by the internet,” Nislick said. “That ended up being a new concept entirely.”
The 200,000-square-foot building has four floors of flexible office spaces, a coworking space called Kearny Works, a rooftop event space and a café.
Ashlee Sullivan, building manager and leasing associate for Hugo Neu Realty Management, feels all of the spaces are different.
“Each floor has a unique floor plan, as we experimented with what worked and what didn’t,” she said. “It’s really cool to see how each floor has then sort of developed its own personality.”
Pricing currently ranges from $16 to $25 a square foot annually — meaning that a small, 350-square-foot office can cost somewhere between $500 to $750 a month. The offices all include concierge services, phones, internet, package receipt and delivery, and printer, scanner and copier services, Sullivan said.
“I think what makes us successful is that we not only welcome our tenants into the building, but we also really take the time to help cultivate and build their business,” she said.
Sullivan feels the various types of office spaces available and the proximity to areas such as Hoboken, Jersey City, Newark and New York City have made Building 78 at Kearny Point a hot spot for unique collaboration opportunities.
“We have a music studio, for example, who needed a new design for their label,” Sullivan said. “So, when they saw a screen printer moving in, the next thing you know, their new logo is popping up on their Instagram.
“It’s been great to see those sorts of things happen.”
From Austin Hein Productions, a music video production company, to Elements Truffles, an all-natural chocolatier inspired by Ayurveda, to Pooka Pure & Simple, a family-run small manufacturer of all-natural bath and body products, Neu said she is extremely pleased with the variety of tenants leasing space at Building 78 at Kearny Point.
“We wanted to attract a diverse group of tenants, as opposed to simply being a tech hub,” Neu said. “That sort of activity and diversity is what I think makes it more interesting.”
In anticipation of what’s to come, Kearny Point has been hosting a monthly collaborative series called “Building 78 Presents,” which encourages both its tenants and members of the outside entrepreneurial community to attend theme-driven networking events, complete with an open bar and a disc jockey.
“Last month’s theme, for example, was ‘Press Play,’ so we invited companies such as Pandora and Revolt to participate,” Sullivan said. “Whether you are interested or not in the digital music space, there is always something of value that you can take away from such a program.
“Our tenants love it, it’s an engaging environment, it’s conversational and the gatekeepers to those arenas are just there chatting and chewing on hors d’oeuvres in order to figure out what the next big thing is.”
For Kearny Point, the next big thing has just begun.
Hugo Neu Realty Management broke ground last week on what will be the project’s first new construction.
“Building 197 will be a light industrial building geared toward smaller manufacturers, particularly in the food space,” Neu said.
Subsequent phases of the project will involve the renovation and demolishment of older buildings in order to create nearly 2 million total square feet of smaller, more light-friendly — as well as more architecturally distinctive — flexible office spaces from 200 square feet to 10,000 square feet.
“We are deliberately letting some leases expire because of our master plan,” Neu said. “We certainly could keep those buildings occupied, but as we move into the next phases of the project, we will need to keep some of them empty.”
In addition to making the entire complex more pedestrian- and environmentally friendly, blueprints for Kearny Point also include a gathering hall with retail and dining components, a waterfront park, an amphitheater and a kayak launch along a living shoreline.
“We are going to create more than 25 acres of open space here, not only for the tenants, but also for the public,” Neu said.
The master plan for the mixed-use redevelopment of the entire 130-acre former shipbuilding complex will take 10 years to finish.
At that point, Nislick hopes their mission will be complete.
“Our primary goal here is to create thousands of jobs,” he said. “My guess is that, at the end, there will be 10,000 people working here.”
The excitement is mutual for both tenants and employees, Sullivan said.
“There is an energy in the building that is ever-present and consistent,” she said. “They are excited about seeing the construction happening around them, and they are spreading the word about Kearny Point by inviting people here, by bringing their families here, and that is definitely a prideful moment for all of us who work here.”
Including most of the two dozen or so employees of Hugo Neu Realty Management.
“We were based in New York, but most of us spend our time here, now, in South Kearny,” Neu said. “Most people don’t know what or where Kearny is, but over time, that is starting to change.”
Neu also stressed that Kearny Point is not a project that Hugo Neu Corp. is looking to flip.
“We have a very long-term view,” she said. “We are really trying to build something there that will have an impact beyond South Kearny.”