In April of 1999, the city announced that it had designated Frank Raia to develop a mixed-use redevelopment project for the city's northwest quadrant.
But now it has been over two years, and people are beginning to wonder when construction is going to start. Raia said Wednesday that while it has taken longer than expected to secure funding and settle litigation, he is still the official developer of the site, and he is going to go on as planned.
His overall plans for the area include a new supermarket, a mixture of affordable and market rate housing, new residential parking facilities, and a charter school.
"For many, many years," said 5th Ward Councilman Michael Cricco last week, "the northwest portion of town has been a vacant, rat-infested dumping ground for other development jobs. Developing that area will be very beneficial to the taxpayers because that is valuable land that has been bringing in only a small amount of taxes." Of Raia's projects, the only one with a firm date to start construction is the new Shop-Rite supermarket on 11th and Madison streets.
Meanwhile, owners of some of the properties in the region want Raia to be de-designated as developer for the area so that they can develop their individual properties themselves.
At the August 2 Planning Board meeting, the board approved the site plan for the supermarket. The lot and the store will cover 170,000 square feet with the actual supermarket covering 67,000 square feet. There will be 8,800 square feet of retail stores and a park pavilion that will cover 2,200 square feet. The total height of the Shop-Rite will be 30 feet.
City zoning laws require the building to provide at least 157 parking spaces and as the plan stands now, there will be 216 parking spaces built in the Shop-Rite's lot.
"We have the demolition license and demolition contract in place and we will begin taking down the old structure as early as Friday [August 17]," said Raia.
Still not settled
But it is the other blocks of development that are being called into question.
At the July 11 City Council meeting, an attorney for four properties within the Northwest Redevelopment District pleaded with the council to de-designate Raia as the developer, because in their opinion he has missed deadlines and has not entered into good-faith negations to purchase their properties.
As part of the redevelopment plan, Raia was to enter into good-faith negations with the owners of the parcels within the district. If an agreement could not be reached, Raia could then claim the property under eminent domain.
But some of the owners of the land do not believe that Raia has acted in good faith with his negotiations. "Mr. Raia has been allowed by the City Council to keep delaying this project so he can buy time to find more funding," said attorney William Handler at the July 11 City Council meeting. He represents BB&D Partners, the ownership group that wishes to develop its own property if Raia does not. "Mr. Raia has consistently missed deadlines and has not enter into good-faith discussions to determine the fair market value of my client's property. That is why we ask the City Council to ask Mr. Raia to either put up the money or de-designate Mr. Raia and allow my client to develop his property."
The city has the authority at anytime to de-designate Raia and name a new developer. Handler also added that his clients had submitted plans for the site to former Human Services Director Bob Drasheff and that they could start construction immediately.
What about the affordable housing?
What makes the picture more cloudy is the city's desire to have affordable housing on this site.
Under Raia's plan, the developer will be building residential units on two blocks, and will provide 432 housing units, approximately 100 of which will be affordable housing. In April, the City Council authorized the city to accept an agreement for Payment in Lieu of Taxes (PILOT payments) for the two blocks to be developed.
That means that the blocks will pay an annual amount that has been agreed to in advance rather than fluctuating property taxes.
While Handler and the other property owners say they are ready to build and said they will consider an affordable housing aspect, they have not as of yet asked the city for an abatement and have not sought out federal funding to help subsidize affordable housing.
"While we would like to provide an affordable housing aspect," Handler said, "we can not be hit with full market value rate on affordable housing. But we can certainly look into that."
Wednesday Raia argued that these land owners had no desire to put any affordable units in the Northwest Redevelopment plan, and that if he is de-designated, they will build market rate units that will bring a much greater profit.
According to state law, a developer of 80 percent market-rate and 20 percent affordable tax abated properties cannot have a return on revenue of more than 11 percent. If the project returns more than 11 percent, all extra funds by rule of law would have to be put back into the facilities.
"They don't want affordable housing, they don't want to help Hoboken - they just want the quick dollar," Raia said. "We have not missed any deadlines and we have given fair market value to one property already [the Shop-Rite property] and we are and will continue to negotiate with good faith concerning the others."
Raia went on to say the supermarket was his number one priority, and now that the store is a go, he can focus on the residential aspects of the project. He added that he has a letter of intent to fund from the New Jersey Housing and Mortgage Finance Agency (NJMFA) for the residential blocks.
Raia is confident that he will complete this project, and said the rest of the construction should start soon, despite possible litigation problems with the current owners.
"We are in negotiations with the owners," said Raia, "and without a doubt we will start construction by the end of the year."
Councilman Cricco, whose ward the project is in, would like to keep Raia as developer but hopes that construction begins soon.
"While I would like to see [Raia] develop this land, it is time for him to act," he said. "It's getting to the point that we are going to have to imposed strict deadlines and if he fails to meet those deadlines, we can and will de-designate. It's time for him to put up the money, or else we will have no other option than to find someone who will."
But Cricco also added that his reason for still staying with Raia despite delays is that he was with the project from the start.
"These owners used to think that this land had almost no value," said the councilman. "With the light rail coming through the west side of Hoboken and with the new developments planned for this section of town, all of the sudden these lands owners want to build instead of sitting on their properties like they have in the past."