Commercial development in Hudson County is doing better than the national picture, as proximity to New York City is improving the occupancy rate of commercial buildings and shopping centers. While a few major projects are on hold in order to await refinancing, several malls and smaller entrepreneurial ventures are materializing.
Large businesses continue to be lured here by cheaper per square foot rental rates – an average of $30 versus $150 in New York City. This probably accounts for Hudson’s low 5.7 percent vacancy rate for commercial space as opposed to the North Jersey average of 12.8 percent.
On the other hand, slow residential real estate sales have led some major developers to try for renegotiated tax abatements from their municipal governments – and certain commercial developers have followed suit. Some projects, like the Hilton hotel in Jersey City and the massive Xanadu project in the Meadowlands that was expected to generate thousands of jobs, are on hold as they await aspects of financing.
New businesses move into Hudson County in a difficult economic climate.
According to a recent Rutgers University report from the Edward J. Bloustein School of Planning and Public Safety, commercial real estate will be the last great challenge in the recession for 2010. The report says before the recession, a record number of commercial real estate loans were made, which will now need to be refinanced over the next three years.
The report says the key issue is whether those loans – and the banks and financial institutions that gave them – will face the same “financial aftershocks” as mortgages and other lenders have in the recent past.
The report also points out that small businesses growth hasn’t received the same attention as big-box store and large company failures, yet small business not only remains the bedrock of the local economy; there are signs that in a dire employment situation people are finding ways to re-invent their economic lives and are starting new businesses.
In Jersey City, hotels and stores
In Jersey City, a commercial hub with a thriving waterfront, Hilton has proposed a 200-room hotel for Marin Boulevard. The city already has a number of hotels on the waterfront.
However, the project is currently stalled as it awaits financing. The $118 million development would be a part of Hilton’s top-of-the-line Conrad brand of hotels, and would feature 470 residential units, as well as 12,294 square-feet of retail space. Last year, the Jersey City Council considered issuing an $8 million loan through the U.S. Department of Housing and Urban Development to help finance the construction, but the council pulled the resolution when it was made clear that if the loan wasn’t paid back, local social services money might have to be used.
Last month the developers of Jersey City’s Newport Office Center VI asked for a revised tax abatement to convert two levels of parking space at their 570 Washington Blvd, office into storage and office space, at the request of The Depository Trust and Clearing Corporation, which plans to relocate approximately 1,600 employees from Manhattan to the location in 2013. A number of upscale residential developers have also requested revised abatements in the wake of slow sales, with mixed results.
The Monaco Towers, twin residential buildings located at Washington Blvd. and Sixth Street, should be completed this year. They will include 11,000 square feet of retail space.
Supermarkets in Hudson County
There are at least 66 supermarkets operating in Hudson County according to the New Jersey Department of Health, and more are on the way.
A few years ago Secaucus lost its sole supermarket, Stop & Shop. But this spring, the Secaucus Walmart plans to expand its grocery section.
In addition, two months ago, North Bergen’s Walmart on Tonnelle Avenue opened with a grocery section that may rival local supermarkets. Walmart’s prices are traditionally lower than other chains, and could create competition in the area.
In Jersey City, the Acme Supermarket near the Jersey City/Bayonne border, closed its doors on Feb. 6, but a Fine Fare Supermarket is slated to open in the same location.
Commercial rebirth in industrial areas
New mini-malls are coming to North Bergen and Bayonne.
Most of the stores in North Bergen’s new mall developed by Vornado Realty Trust are open. BJ’s Wholesale Club, PetSmart, Staples, the aforementioned Walmart, and other stores are open, while others will open some time in 2010. The shopping center is located at 91st Street and Tonnelle Avenue. Previously it was the site of a bus terminal.
The former Military Ocean Terminal of Bayonne (MOTBY) recently cleared a hurdle allowing for future development. Last month, Fidelco Bayonne HSN, LLC, a developer of part of the Peninsula, reached a legal agreement that will allow them to back out of building hundreds of homes in the Harbor Station sector. All parties involved decided that a commercial redevelopment of the site would be more beneficial to the community. Peninsula Infrastructure Partners now has the development rights to the property, and plans to build premium outlet shops, restaurants, and hotels.
A groundbreaking of the Bayonne Crossing Shopping Center on Route 440 between New Hook Road and East 22nd Street was held last year. It will feature 360,000 square-feet of retail space includes a Loew’s Improvement, Walmart, and Best Buy.
In Hoboken, NJ Transit wants to build an office tower, hundreds of condominiums, and retail space near their train terminal on the mile-square city’s southern border. However, they have met opposition from residents who feel the scope of the project – including a 75-story office tower – will be too big. Debate about the development should fulminate in 2010.
Hoboken officials have been planning a number of redevelopment zones for the formerly industrial areas near the north and south borders, but are still debating with activists just what should go in those zones. One councilwoman, Beth Mason, would like to see a minor league baseball stadium come to Hoboken’s northwest quadrant.
Small businesses sprout from hope
After the economy tanked, many Hudson County residents rethought their careers.
In Hoboken, Fran Totaro’s family once owned a watch shop on Fourth Street, which struggled in the economy and was sold nine years ago. They retained ownership of the store front, purchased two self-contained dog wash machines, and decided to start the Hoboken Dog Wash, which also offers grooming.
Last year, a North Bergen resident, Joanne DeSantis, was laid off from her “corporate America” job and began a pet sitting service, which she said has fared well during its first year.
North Bergen resident Matt Steinberg will be opening his brewery, New Jersey Beer Co., along Tonnelle Avenue in the coming weeks. Not only does he hope his small business thrives in the industrialized section of North Bergen, but he is thrilled that he will be contributing to the job market. He said that waiting for loans and approvals “probably slowed [the process] down by four months,” but that even in this financial climate, his brainchild is becoming a reality.
Well-known small stores move to area
North Bergen businesses like Patrick Ralph La Frieda, a well known New York City meat purveyor, and Switch and Data, a data center that monitors current internet fads, are just a few of businesses that recently chose to relocate to Hudson County for a more centralized location, Urban Enterprise Zone tax benefits, and a cheaper place to rent or buy commercial real estate.
Business districts in urban areas can apply for state UEZ designation, which means they can lure shoppers with low 3.5 percent sales tax, and use that tax money to refurbish the district.
In places like Union City and West New York, small businesses thrive in their UEZ business districts. Casa Las Americas Social Club is one of the most recent businesses to open along Bergenline Avenue, across from the Union City Light Rail Station.
And West New York resident Gilbert Flores, who grew up in Union City, recently opened up his own cigar shop and lounge in Weehawken after working in his family’s shop in Hoboken for years.
On a negative note, on March 31, Barnes & Noble, Hoboken’s largest book store, will close its doors. However, the city still has one small book store, Symposia Bookstore, specializing in used books since 2001.The operation, according to its manager, Carmen Rusu, is non-profit. “Maybe that’s our secret,” he said. The store hosts events and readings.
In Weehawken, Port Imperial nears completion
Port Imperial, a two mile development along the Hudson River in Guttenberg, West New York and Weehawken, is reaching its final phase, which includes thousands more housing units and two million square feet of retail and office space. More than 80 percent of the retail space has already been occupied, but there is talk of a doggy day care business and wine bar within the development.
“Son Cubano,” a high-end Cuban restaurant, will soon be open at the shops at Riverwalk, a portion of the project located in West New York.
The future of Xanadu
Xanadu, the stalled $2.3 billion entertainment/retail/sports complex on Route 3, is not located in Hudson County, but it’s close enough to have an impact. It was originally touted as a way to generate millions of dollars and tens of thousands of jobs to the area. But opening dates have been pushed back several times and the project needs about $500 million to be completed.
Related Companies, a New York City-based real estate development company, may pick up the portion needed to complete the project. The project was originally supposed to be financed by Mills Corp., but ended up being backed by Colony Capital, a private equity firm that was unable to finance the project as planned after taking over in Aug. 2006.
The massive complex is slated to someday feature five theme-oriented shopping and entertainment districts, an aquarium, two skydiving tunnels, an indoor snow dome, restaurants, and 200 stores. There will be 2.3 million square feet available for lease.
In 2010, the fate of the project may be decided. If Related does not reach an agreement with the New Jersey Sports and Exposition Authority, Gov. Christopher Christie has suggested a state takeover of the project.
Tricia Tirella may be reached at TriciaT@hudsonreporter.com.