The city insists that a major development planned for Journal Square is still on track to break ground in December, even though the administration and City Council agreed to delay the introduction of a package of tax breaks for the project.
It has been nearly a year since the city Planning Board approved plans for the Journal Squared residential development, which is also known as J2. Despite this approval, the City Council has yet to approve the project and groundbreaking has been on hold since last December.
The current holdup appears to be the approval of the state Local Finance Board and questions some council members have regarding the tax abatement agreement the city plans to offer the project’s developer. The city must also meet with the Friends of the Loew’s, a nonprofit organization that leases and manages the Landmark Loew’s Jersey Theatre, which will receive a hefty contribution from the developer as part of the deal.
Introduction of three ordinances regarding J2 were postponed until Wednesday, Oct. 30, when the City Council will hold a special session on the ordinances at 9 a.m.
Tiered, three tower development
Under current plans for the development, the KRE Group will build a 1,840-unit residential development behind the Journal Square transit hub, at Summit and Magnolia avenues, on what is currently used as parking for NJ Transit and security personnel. A portion of the development will also occupy what was once a Verizon office building on Summit Avenue.
The KRE Group was the developer of Grove Pointe, the large-scale residential rental development at the Grove Street PATH Station.
The project, which will be built in three phases, will ultimately include about 36,000 square feet of retail space and 920 parking spaces.
“We’re planning to break ground in 2013 for Phase I,” KRE Principal Jonathan Kushner told the Reporter. “I can’t project how long it will take to build Phase II and Phase III. But our plan is to complete Phase I within the next 36 months. That means we expect to be built and leased within 36 months.”
If approved by the City Council, Journal Squared would be the first to benefit from Fulop’s new abatement policy.
The first phase of the project will be a 54-story, 540 residential rental unit tower that will include a pedestrian/community space out front, similar to Grove Plaza at the Grove Street PATH Station.
“A large part of our plan here is to rebuild all of Magnolia Way to make it a new public plaza,” Kushner said.
Project to help overhaul the Loew’s
If approved by the City Council, Journal Squared would be among the first residential developments to break ground since the administration of Mayor Steven Fulop took office on July 1. The project would also be the first to benefit from Fulop’s new abatement policy, which offers the steepest tax breaks to projects built in the inner city, particularly at Journal Square, and less generous breaks to developments along the waterfront.
The plan, which Fulop announced last month, was designed to spur more development in parts of the city that have seen little or no new development.
For the J2 development, the administration is proposing a 35-year tax abatement for the KRE Group. The city would also use $10 million in Redevelopment Area Bonds to fund infrastructural improvements in the area. The bonds would help fund new public parking, upgrades to the sewer system and city property near the Journal Square PATH Station, and improvements to Magnolia Avenue.
In exchange for its abatement, the KRE Group would make a $2.8 million contribution to the city’s Affordable Housing Trust Fund and make another $2.5 million donation to the city to help restore and renovate the Landmark Loew’s historic theater, which has long been cash-strapped and unable to make upgrades and repairs.
Fulop said last week that Journal Squared will create approximately 700 construction jobs during each of the project’s three phases.
“There has been a delay to finalize the ordinance to ensure it was fully prepared for the Local Finance Board,” the city’s Corporation Counsel Jeremy Farrell told council on Oct. 23, when the three JR-related measures were originally scheduled to be introduced.
He added the administration has yet to meet with Friends of the Loew’s to discuss the developer’s contribution to the theater and how it might be used.
“We believe the Loew's Theatre is the lynchpin to a vibrant cultural scene and nightlife in Journal Square,” Fulop said in a release issued last week. “Journal Square is already a transportation hub and employment hub. This project will restore Journal Square to its rightful place as a residential and cultural center in the heart of the city. We want to make Journal Square a true destination for entertainment and culture.”
Colin Egan, executive director of the Landmark Loew’s, said he welcomed news of the contribution.
“The plan was always for the city to find funding to bring the building up to modern code and make it more useable,” Egan said. “But the city wasn’t able to secure the funding it expected in years past. My assumption is [the funding from KRE] will be used for those issues, so it gets us going in the direction that we need to go in.”
E-mail E. Assata Wright at firstname.lastname@example.org.