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News Analysis: New Questions on Steel Tech

January 20, 2021/in Bergen Lafayette, header, Latest News, News, Trending Now, Uncategorized /by Aaron Morrill

A recent decision by the Jersey City Redevelopment Agency to authorize a condemnation suit to acquire a derelict warehouse in Bergen-Lafayette is raising new questions about the testimony of the agency’s executive director, Diana Jeffrey, regarding another project known as Morris Canal Park Manor.

Condemnation proceedings are sometimes used by the JCRA to acquire blighted property for redevelopment where the property owner owner is unwilling to sell.

The 17-story Morris Canal Park Manor project, also known as “Steel Tech,” was the subject of a contentious December 16 City Council meeting at which the council voted to amend the Morris Canal Redevelopment Plan to allow the luxury project, also in Bergen-Lafayette, to move ahead.

Community members argued that the project would accelerate gentrification and violate the Morris Canal Redevelopment Plan, which provided that the parcel would become part of Berry Lane Park.

Now, the JCRA’s authorization of a condemnation suit at 125 Monitor Street is calling into question the reasons given by Jeffrey for not having employed the same legal strategy at Steel Tech when it became clear that the owner would not sell the property.

Councilman-at-Large Rolando Lavarro asked Jeffrey why the JCRA didn’t seek to acquire the Steel Tech property by way of condemnation. Jeffrey replied that the JCRA would not “typically” commence condemnation proceedings without having a developer who could fund the cost of the litigation.  She also said that to acquire the Steel Tech property would have been “infeasible and reckless” because of the possibility that at the end of the litigation the city might end up being forced to purchase the property for a price beyond the city’s means. The JCRA “doesn’t undertake condemnation lightly,” she said.

What Jeffrey did not disclose to Lavarro and the council was that on the previous day, members of the agency’s board of commissioners voted to acquire nearby 125 Monitor Street and to authorize condemnation proceedings if necessary. 125 Monitor Street has an appraised value of $5.76 million, close to the value of $6 million Jeffrey last put on the Steel Tech property.

When JCT asked about the seeming contradiction, administration spokesperson Kimberly Wallace-Scalcione echoed Jeffrey’s response. “The potential exposure for the Steel Tech site was millions upon millions more than what the city could afford and therefore would be irresponsible and unfair to the taxpayers, which is a completely separate and incomparable situation to the 125 Monitor project where the city will pay zero out of pocket.” She further pointed out that the developer would be picking up the cost of the lawsuit whereas with Steel Tech, the city would have had to pay for the litigation, a point that Jeffrey made as well.

But some are unwilling to give Jeffrey and the administration the benefit of the doubt given that many of Jeffrey’s statements appear to have been flat out wrong or misleading.

For instance, in a memorandum to City Council President Joyce Watterman prior to the council meeting, Jeffrey stated that Steel Tech “was never part of the original plans for Berry Lane Park.” Jeffrey was forced to walk back that claim when former JCRA director of development, Ben Delisle called her statement “crazy and disingenuous.” A ream of documents backed up Delisle’s claim.

Then, during the council meeting, Jeffrey seemed to inflate the property’s value to bolster her claim that the JCRA decided not buy the Steel Tech property because it had been “priced out of the market.” But she was forced to acknowledge that her estimate of the land’s value had been based not on an actual appraisal but on an informal one by unnamed persons at the JCRA. “I’m not saying that we did an appraisal and that it came back at $6 million…it was our assessment that it could be worth as much as $6 million.”

Later in the meeting, Councilman-at-large Rolando Lavarro presented Jeffrey with a 2017 JCRA letter in which the agency “reiterated” its offer of $3.15 million for the property. Jeffrey countered that this price was for negotiation and didn’t reflect its actual value. In fact, a month later an appraisal done for purposes of obtaining a Green Acres grant valued the land at $2,950,000, undermining her claim that in offering $3.15 million she was merely lowballing the seller.

Jeffrey further undermined her credibility when discussing the standard a court would use to value the property in a condemnation proceeding. Lavarro presented her with a 2018 letter from New Jersey Realty Advisor Group, an appraiser. In it, the appraiser stated that the land would ultimately be appraised using its (then) current zoning, which was industrial.  Jeffrey disagreed, stating that the appraisal would be based on “highest and best use.” Jeffrey’s statement was grossly misleading.

According to the leading New Jersey Supreme Court case on the subject, property is normally appraised based on current zoning ordinances. Only if there is “a reasonable probability that a zoning change would be granted” will a court depart from using the current zoning for valuing the property.

Had Jeffrey — by all accounts a capable attorney —  been completely honest, she would have conceded that the likelihood of a court placing a high value on the property was small. The “current zoning” was industrial. The land was slated to become part of a park pursuant to a long-standing redevelopment plan.

Questions posed by the project’s council sponsor, Ward F Councilman Jermaine Robinson, should have also set off alarms. After Lavarro finished, Robinson, the man who had spent years putting the deal together, demonstrated that he didn’t know what the land — the one card the developer held in the negotiation — was worth. Without a hint of embarrassment, he said to Jeffrey,”I don’t know if the owner or the seller’s owner has today’s value…like do we have a number…did we do an appraisal?” Jeffrey answered, “No, we didn’t do an appraisal…we haven’t done a recent appraisal, no.” No one thought to ask Robinson how he could have gone into the negotiation so unprepared.

What motivated Jeffrey to spin the case for Morris Canal Park Manor may never be known. But Jeffrey’s and the administration’s suggestion that the city lacked the funds to acquire the property and to fund a condemnation suit strikes some as questionable.

One person knowledgeable about the workings of Jersey City redevelopment, who asked to remain nameless, said the city’s claim that in a condemnation proceeding at 125 Monitor Street it would be avoiding the cost and risk sounded more like a pretext. According to that source, the decision not to condemn the Steel Tech property was more likely based on a shift in priorities towards development and away from parks.

Former JCRA Executive Director Bob Antonicello also discounted financial risk and the cost of litigation as the city’s motivation in moving ahead with the project. “When we began the process of assembling the parcels for Berry Lane Park, we didn’t have 25% of the $40 million we ultimately needed. If we had worried about the cost of condemnation in 2006 when we began the process, the park never would have been built.”

Indeed, history has also shown that when it suits city hall, money can and will be found to buy property and to litigate. In 2018 Jersey City bonded for $170 million to purchase the land for the massive Bayfront development on the Hackensack River. And in it’s ill-fated multi-year lawsuit to avoid a city-wide revaluation of properties — a case in which the trial judge ruled that the administration acted in bad faith — the administration spent close to $500,000 on legal fees.

If Councilman Robinson considered working with a different developer willing to fund a condemnation case and committed to a project acceptable to the community, he didn’t tell anyone.  The community was presented with a massive fait accompli.

In the end Jeffrey’s misrepresentations and spin combined with Robinson’s questionable handling of the project may be why many in the community feel that the Steel Tech project looks like a backroom deal. Said June Jones, President of the Morris Canal Community Development Corporation,”We didn’t know about Steel Tech until they had been in discussion for almost two years.”

 

 

Tempers Flare as Council Approves High Rise

December 17, 2020/in Bergen Lafayette, header, Latest News, Neighborhoods, News /by Aaron Morrill

Last night Councilman-at-Large Rolando Lavarro railed against his colleagues as they voted 6-2 to allow a massive luxury high rise to move ahead in Bergen-Lafayette. The project’s council sponsor, Ward F Councilman Jermaine Robinson, and Lavarro lobbed volleys of personal attacks on one another, at one point prompting Councilman-at-Large Daniel Rivera to intercede.

Known as Morris Canal Park Manor, the 17-story, 361 unit project would include 18 affordable apartments, a recreation center for the community and ten “units” for minority start-up businesses that would move to market rate after 10 years.

For over an hour, residents called in to express their opposition to the project, most often about the lack of community input and the gentrifying effect it would have on the neighborhood.

Brenda Chisolm was typical. “There is not enough affordable housing. Five percent is a slap in the face of the community. Jersey City will soon become a city of transplants.”

Said Uche Akpa, “There has been very vocal opposition which has been ignored.”

Two callers expressed support.  Linda West Jackson was one. “I was born, raised and educated in Jersey City. My parents own property on Communipaw Avenue for 60 years. I speak to hundreds of people in that community who are very excited and very much for this new ordinance.”

Robinson spoke passionately in favor of the ordinance, focusing on the need to provide indoor recreation for kids.

“Everybody knows here that I’ve been working and fighting for recreation for the kids. And I want to thank Yousef [Saleh] for pointing out that the kids on the street are dying. On the day I became the council person, the number one thing that we were asked was I need something for the kids. We did a survey and the survey said that 91.5% strongly suggests that Ward F have a recreation facility.”

“I represent the entire Ward F and this project has got support from the entire city. Tonight may seem like it wasn’t support. But if anyone was on a planning meeting, we had a hundred speakers where it was not 50-50, it was way more about 70-30 of people speaking out on it.”

Taking aim at Lavarro, Robinson went on, “then we have the council people whose name was on documents from the JCRA [Jersey City Redevelopment Authority], who was the chair of the JCRA, who was the council president at the same time. And in the three years that that happened in my research, I didn’t see one project brought to the city that bought any community re-investment to us. I remember him coming to me and talking to me about how, how he wanted to put two 30-year abatements at the NJCU campus that we got nothing back for.”

Robinson also singled out the community group leading the effort against the project.  “And when we look at the Morris Canal area in general, we have over 2000 units…that has been approved by the Morris Canal CDC. And we have zero affordable units. We have zero community benefits that we can point at.”

Continuing to attack the project’s opponents, he went on. “Whoever didn’t support this, you don’t care about the kids in Ward F.”

Lavarro launched his counter-attack.  “I’ll tell you what the councilman from Ward F told me over the past several years. He confided in me at one time that his aspiration is to be Peter Mocco. ‘I want to be [local developer] Peter Mocco who was the North Bergen mayor at one time. And he learned so much about development that when he finished as mayor he was able to make a ton of money.'”

Councilman-at-large Daniel Rivera attempted to tamp down the rhetoric.  “Let’s not make a mockery out of this council…you need to take a breather, relax.”

Lavarro responded, “thanks for your concern, I’ve got it handled, no worries.”

Lavarro went on.  “So Councilman Robinson told me I want to be like Peter Mocco. I’m going to learn all I can about development and make all the relationships. And when I’m done here, I’m going to make a ton of money. Well you are on your way, on your way to that outcome councilman.”

“All of the council, people who were voting for this should be ashamed, frankly, because you are in fact enabling the disrespect and you’re enabling the gentrification and you’re enabling this this shameful act to go on right now. It’s literally a crime that’s being perpetrated tonight.”

“I mean, talk about selling ourselves on the cheap, talk about not knowing our value for Jersey City. This is an insult to the people of Jersey city. It’s an insult to two generations before them to the people who have struggled and fought for that vision and Morris Canal and the Lafayette area. We’ve now increased the value of this land, such that this property owner who has sat on this dilapidated land and allowed it to fester as an eyesore in the community, you’ve now enriched him to the tune of $11 million.”

Sounding like a possible aspirant for higher office, Lavarro called for the ouster of his former allies and council-members. “I hope that people of Jersey City are watching and I hope you realize what’s going on here in our city. We are being sold on the cheap and the only way it’s going to change, the only way that’s going to change, if we rise up as a city, as a community, and that we oust all of these folks in November, 2021. I know I can’t do it. It’s a powerful machine. But I’m making the call tonight because we can no longer stand by and allow these sort of deals to go by and to sell our city out.”

Developer Proposes Recreation Center Next to Berry Lane Park

August 26, 2020/in Bergen Lafayette, header, Latest News, News /by Ron Leir

Project Would be Part of 17-Story Residential High-Rise

Jersey City could get its first municipal recreation center within the next couple of years as part of a deal being offered by nearby real estate developers.

The facility, a 22,000-square-foot, two-story structure, will include a gym, a rock climbing wall, a sauna, dance studios, music studios, and a food concession. For the more studious it will also feature computer labs and classrooms for STEM instruction. Adjacent to the center will be a 14,000-square foot structure accommodating eight “incubator” commercial working spaces for minority business enterprises (MBEs) anchored by two private retail businesses. Parts of the project will be 17 stories high.

The public package is part of a giveback pitch offered by a North Bergen-based developer seeking Jersey City’s approvals for construction of “Morris Canal Park Manor,” a 3.3-acre, 361-unit residential high-rise and parking garage that would border Berry Lane Park at Communipaw Avenue and Woodward Street in Ward F.

No tax abatements are being sought by the developer, and the part of the property dedicated to what has been tentatively called the Frederick Douglass STEM Recreation Center, valued at $900,000, will be deeded to the city.

As for the residential part of the project, the developer, Skyline Development Group, anticipates that 18 units will be designated as “affordable” as defined by federal income standards; the balance will be market rate.  Skyline’s most recent project is the Solaia, a 70-unit, 14-story condominium tower off River Road in North Bergen which just “topped off,” real-estate lingo for having had its highest story built.

The proposed Jersey City venture, whose development cost is projected to be $175 million, would displace the sprawling MacElroy Steel Co., a 150-year-old business specializing in fabricating steel parts for marine operations and, according to Skyline CEO Lou Mont, that had made the bolts for the George Washington Bridge.

Part of the business is still functioning, Mont said.

According to Mont, if the project is approved, Skyline would preserve one of the MacElroy structures—a two-story brick building fronting on Communipaw—to use as a temporary construction office and then convert it to a “market retail” business, possibly a bar and eatery.

The proposed garage would have a capacity for 284 spaces, including 40 reserved for members of the public using the center.

Mont said that test samples taken at the site showed no evidence of dangerous toxins but that there had been evidence of “some petroleum hot spots.” For this reason, some soil from the site has been removed and “a number of test wells” are being regularly monitored, Mont said.

“The only remaining issue,” according to Mont, “is that there is a minor amount of asbestos in three of the plant’s contiguous buildings that run along Woodward” that will need to be removed.

Also, to comply with environmental standards, Mont said Skyline will arrange for the project’s site to be capped with two feet of clean fill. With these measures, he added, the project “will easily meet the standards for residential development.”

The Church of God in Christ Temple, at the corner of Communipaw and Woodward, and two adjacent residential buildings would be spared from the wrecking ball if the project goes forward, Mont said.

Skyline’s plans call for a pathway through the middle of the Manor complex, leading from Communipaw to Berry Lane Park, along with a one-acre open space off of Woodward that could support such city-organized activities as  farmers’ markets or open-air concerts.

The site is a “federal opportunity zone but is currently zoned for industrial use. Mont said Skyline will ask the Jersey City Redevelopment Agency to consider amending the city’s redevelopment plan for the site to allow for residential and retail use. If the JCRA obliges, the proposed zoning change would go to the city council for ratification, and then the city planning board would be asked to schedule a site plan hearing, Mont said.

“We’re looking to spring or summer of 2021 to secure all our approvals,” he said. “We project this will be a two-year project, so summer 2023 would be the finish date. However, Mont added, once the project starts, “we anticipate the STEM/rec center to be completed ahead of the residential tower and MBE retail center.”

The residential tower features what Mont calls a “step down-tiered” design, calling for portions of the building to rise to varying elevations, from eight to 11 to 17 stories, as a means of being less intrusive on the surrounding neighborhood.

Ward F Councilman Jermaine Robinson said he welcomed the prospect of the city’s getting its first municipal rec complex. “I’ve always said children are our future, and while kids don’t vote, I feel I’m elected to be the voice of the voiceless. The big question is, ‘how do we fund this for the future?’ and the answer is probably going to be grants.”

Robinson said he’s already met with the city’s newly reorganized recreation division, representatives of the JCRA, and the city’s business administrator “to start the ball in motion” identifying grant programs that may be tapped.

As for the types of programs the city will be offering at the center, Robinson said: “The community is going to dictate what goes in there. I’m putting all hands on deck to get input on that.”

For more Ward F news, click here.

Hunt Is On for New Operator of Loew’s Jersey Theatre

June 15, 2020/in Diversions, header, Journal Square, Latest News, News /by Ron Leir

City hopes entertainment mecca will reopen in 2022

Two former antagonists are uniting in a common goal: to restore the Loew’s Jersey Theatre, one of Jersey City’s last remaining landmarks, and transform it into a state-of-the-art entertainment spot while preserving its historic architecture.

At a press conference held Thursday, June 11, Mayor Steven Fulop  announced that the city will seek a new operator “with international reach” to run and manage the movie palace. Colin Egan, founder of Friends of the Loew’s, which formerly restored and ran the theatre, joined in the announcement.

In tandem with the news, the Jersey City Redevelopment Agency issued a 61-page request for proposals for the project.

“We’re going out for a six-week RFP,” Fulop said. Proposals are due back by July 31, 2020, at 4 p.m.”

The JCRA, the Council, and FOL will review the submissions after the deadline has passed. Once that review is done, the JCRA will award a management contract to the successful vendor, according to City Business Administrator Brian Platt.

“We’re looking for a single entity to restore the facility and to preserve its historical elements,” Platt said, while also booking major performers and professional touring acts and — what Egan described — as “community, nonprofit, affordable” performances.

Platt and Egan both spoke of the desire to maintain the unique ornamental features of the building.  The new operator would likely have to modify the back end, however, to serve as an equipment loading dock.

The Loew’s Jersey Theatre opened in 1929 at a cost of $2 million, according to Mayor Fulop. Redeveloping it, though, could cost $21 million, estimates the city’s consulting architects, HMR Architects of Philadelphia: $4.4 million for life-safety and code compliance; $5.8 million for balcony and production improvements; $9.2 million for theatre improvements; and $1.6 million for optional equipment and upgrades. The theatre will need to be made ADA (Americans with Disabilities Act) accessible. And new heating and air conditioning systems will need to be installed, according to Platt.

These expenses will hopefully be made by the new operator as part of an annual lease payment to the city, Platt said further. But the city is not ruling out alternate payment options — or funding sources. The coronavirus pandemic has affected the city’s budget in ways unimagined when financing of the Loew’s project was originally designed. Fulop maintains that the time for the project is still right given all the developments happening in the area. Much residential real estate development is migrating away from downtown and to Journal Square; a building next to the PATH Station on Sip Avenue is being transformed into a new Jersey City Museum and Cultural Center; and the Journal Square transit hub itself is being renovated by the Port Authority.

The mayor concedes the area lacks the ancillary amenities like upscale bars and eateries that are conducive to supporting a big entertainment center. But, he says, the newly renovated Loew’s could serve as “the core” for attracting those types of businesses.

Egan pointed to similar entertainment-related development efforts in other U.S. cities such as Atlanta, St. Louis, Cleveland, Columbus, Providence and Boston. Those projects, he says, have been successful.

The city hopes the Loew’s theatre will open in its new incarnation by late 2022.

What programming will the sparkling new complex offer — and will Friends of the Loew’s maintain any role at all?

As outlined in the RFP, each year the new operator will be expected to produce at least 20 musical shows by nationally recognized artists, at least 10 theatrical or other stage performances and at least 10 comedy performances. An unspecified number of private bookings will also be allowed.

Although the city and FOL had waged a seven-year legal battle over stewardship of the Loew’s – with the FOL’s prevailing after a court validated its lease of the property — the lease expired recently, and both Fulop and Egan said Thursday the time has come to bury the hatchet and look to the future.

FOL will remain involved in both the renovation and the programming. It will have a say in all matters pertaining to the design and construction proposed by the new operator; it will continue relying on volunteers to help with touching up and cleaning the highly detailed ornamental fabric of the building; and it will arrange for inspection of the building at least once a year to ensure that the fabric remains preserved.

The grassroots group will still produce some shows, as well. FOL will have the right to present commercial and non-commercial events with a range of cultural partners on no fewer than 55 days each year.

To review the RFP on the Loew’s Theatre, visit TheJCRA.org and download the relevant posting.

For other articles in our coverage of the Loew’s Jersey Theatre, click here.

 

Photo courtesy of Jennifer Brown/City of Jersey City

News Briefs

Hudson County Community College has been named the recipient of a one-year, $850,000 investment from the JPMorgan Chase. The investment will be utilized for a program the College developed to address the challenges of the economic crisis in Hudson County that were brought about by the COVID-19 pandemic. The program is designed to provide lasting improvement in the County’s workforce ecosystem.

Mayor Steven Fulop and the Jersey City Economic Development Corporation (JCEDC) have launched the latest round of emergency funding to provide over $2.5 million in direct aid and support to Jersey City’s neediest residents, regardless of immigration status. The city will partner with  York Street, Women Rising, United Way, and Puertorriqueños Asociados for Community Organization. 

Mayor Steven Fulop is joining forces with Uber to announce a new agreement that will expand residents’ access to COVID-19 vaccinations with free Uber rides to and from Jersey City vaccination sites. Phase 1B includes essential frontline workers and seniors 75 years old and over.

The federal Paycheck Protection Program, which offers businesses loans that can be forgivable, reopened on January 11th. The revised program focuses first on underserved borrowers – minority- and women-owned businesses.

Keep abreast of Jersey City Covid-19 statistics here.

Governor Murphy has launched a “Covid Transparency Website” where New Jerseyans can track state expenditures related to Covid.  Go here.

 

 

 

 

 

 

 

 

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