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Gold Rush

Development on Jersey’s Hudson River shoreline has been a bumpy ride, but the results are often impressive.

Posted February 11, 2009 by Paul Drexel

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Gold rush 1
Wall Street West: The Jersey City financial district.
Photo by Johnny Stockshooter/IPN Stock.

Gold rush 2
NORTH-SOUTH RIDE: The Hudson-Bergen Light Rail.
Photo by Colin Archer/Agency New Jersey.

gold rush 4
AHOY: Freedom of the Seas, the world’s largest cruise ship, sails from Bayonne’s former Military Ocean terminal.
Photo by Richard Drew/AP.

Gold rush 3
The W Hotel in Hoboken.
Courtesy of Cahin Communications.

During the 1970s, the New Jersey shore of the Hudson River was a cesspool. Upstream, General Electric had released more than a million pounds of toxic PCBs, contaminating fish and threatening to destroy the waterway’s ecosystem.

“We used to joke that the only lucky fish in the Hudson was a dead fish,” says 46-year-old Sam Clifford, who grew up in Hoboken. “The river would bubble up green slime on hot summer days; the stench was unbearable.”

PCBs (or polychlorinated biphenyls) were banned in 1977, but they were only part of the problem. Abandoned factories and waste sites lined the dilapidated west bank. The Hudson was dying—along with the cities that many New Jerseyans called home.    

Thirty years later, communities from Weehawken to Bayonne are experiencing a renaissance so promising that the stretch has come to be known as the Gold Coast.

Since redevelopment kicked into gear in the early 1980s, the Gold Coast has been a magnet for new residents and companies, mainly due to its easy access to Manhattan via rail and ferry services. The newcomers include young professionals and empty nesters from the suburbs.

Equally important, corporations such as publisher John Wiley & Sons, Bank of Tokyo, and Goldman Sachs have set up substantial operations. So while the factories that once provided jobs on the Jersey side of the river are gone, thousands of white-collar workers now pour into the area each day for financial, high-tech, publishing, and service jobs that are central to the 21st-century economy.

“I’ve seen whole neighborhoods created along the waterfront where people work and live,” says Mark Edwards, a director with Broad Ridge Financial Solutions, who has worked in Jersey City for sixteen years. “There are even guys fishing for stripers out on the new piers.”

Today, the Gold Coast has some of the most valuable real estate in the country. Condominiums on the top floors of the new 25-story W Hotel, located on the waterfront in Hoboken, sold recently for more than $4 million, according to officials with parent company Starwood Hotels. Another Starwood property, the 429-room Westin Hotel, opened recently in downtown Jersey City.

Not every change has been welcome. In Hoboken, the Maxwell House Coffee plant left town in 1992 after more than 50 years, taking with it the classic waterfront neon sign of a cup of coffee being poured. In Jersey City, Colgate closed shop as well after more than 60 years, but thankfully left behind the giant Colgate Clock, whose illuminated face continues to display the time along the banks of the Hudson.

Progress on the waterfront can be traced to the efforts of private industry, government agencies, environmental groups, and community activists. These interests have often been in conflict over development plans, but each can claim a share of the victories in the reshaping of the Gold Coast.

One defining moment occurred in the early 1980s when the LeFrak Organization won approval for its massive Newport development in Jersey City, a mixed-use community of high-rise commercial and residential buildings, and a large retail mall. LeFrak got virtually everything it wanted for the project. The developer’s only concession to the community was dropping the word “City” from the Newport project’s name.

In contrast, activists in Hoboken successfully blocked a high-rise proposed by the Port Authority of New York and New Jersey for Pier A at the Lackawanna Terminal. A referendum to halt that development passed by a handful of votes. Today, Pier A is a landscaped public park; commercial development has shifted westward.

“The Gold Coast’s renaissance has long been a matter of give and take between the municipalities, activists, and the developers,” says Bill Campbell, a former reporter for the Jersey Journal who covered real estate during the late 1980s. “Look at Jersey City. Colgate Palmolive shuttered its massive operations at Exchange Place, but at the same time, Tom Stanton of Jersey National Bank had the foresight to begin construction of a new corporate high-rise, which spurred the rebirth of that neighborhood.”

The journey from wasteland to valued real estate has not been easy. As feared, gentrification has driven some longtime residents from their old neighborhoods. And many school systems still struggle. Data gathered by the state (and reflected in this magazine’s recent Best High Schools survey) indicate that, while a few schools along the Gold Coast have made enormous strides, many still have failing grades.

On the political landscape, in time-honored Hudson County tradition, county executive Robert Janiszewski was convicted in 2005 on corruption charges after admitting he took more than $100,000 in bribes, including payments from Hoboken-based developer Joseph Barry of Applied Development Company.  

“There have been some real bumps and bruises during this period of redevelopment, and yet the transformation of the waterfront has continued,” says Campbell. “Housing, jobs, and other amenities have been created. And the public, especially because of the input of grassroots organizations, now has access to most of the waterfront.”

A key factor in the emergence of the Gold Coast was the introduction of the New York Waterway ferry service in 1986 by trucking magnate-turned-builder Arthur Imperatore Sr. The service links Weehawken, Jersey City, and Hoboken to the World Financial Center and West 39th Street in Manhattan. The Weehawken ferry terminal, on the site of the old Penn Central rail yards, has become the anchor for development of what is now known as Port Imperial—a 21.5-acre stretch along the river with homes, businesses, and restaurants.

Another important driver of development is the Hudson River Waterfront Walkway, an eighteen-and-a-half-mile corridor that follows the shoreline, passing through densely populated areas that were once home to train yards, industrial sites, and vacant lots. More than 40 years in the making, the Walkway still has major gaps, but where finished, it provides dramatic views of the New York skyline and easy access to waterfront attractions.

“Almost 600,000 people live in the communities that the Hudson River Walkway passes through,” says Helen Manogue, a founder and longtime member of the Waterfront Coalition of Hudson & Bergen, a local advocacy group that has fought tirelessly for the project. “It is still not complete, but today people can enjoy the shoreline and the Hudson River in ways that were impossible a generation ago.”

A third linchpin in the redevelopment  is the Hudson–Bergen Light Rail System. Owned by New Jersey Transit and operated by the 21st Century Rail Corporation, the light rail links almost all the Gold Coast communities. Residential and commercial redevelopment around light rail stops has been intense.

The opening of the Essex Street light-rail line in downtown Jersey City played a vital role in spurring the construction of thousands of new homes in the vicinity. Similarly, development at Liberty Harbor North, an 86-acre parcel adjacent to Liberty State Park in Jersey City and close to the light rail, is expected to yield more than 5,000 residential units. In Hoboken, the new W Hotel is only blocks from a light rail station and a massive redevelopment project, which is in the planning stages at the Hoboken Train Terminal.
 
In Jersey City, the most populous municipality on the Gold Coast, downtown brownstones that were once havens for junkies have been restored and are highly desirable places to live. At Exchange Place near the PATH station, the swanky 40-story Goldman Sachs tower is the tallest building in New Jersey and houses more than 4,000 employees from Goldman and other financial-services institutions. In fact, Jersey City now has more office space than cities such as Denver and Providence.

Dozens of developers have taken advantage of the Gold Coast gold rush, including SJP Properties and Applied Companies in Hoboken, as well as the Roseland Property Company and Hartz Mountain with its Lincoln Harbor development in Weehawken. In Jersey City, prominent New York developers LeFrak and Donald Trump have built skyscrapers where abandoned dogs once roamed freely through vacant factories.

Like a number of developments along the west bank, Trump’s $415 million Trump Plaza project has recently run into serious financial roadblocks. One of the two Trump Plaza towers opened last year, and the majority of its units have been sold. But in December, the Jersey Journal reported that the local developer, Hoboken-based Metro Homes, defaulted on a loan for building the second tower. As of late January, Metro Homes was still attempting to restructure its loan and jumpstart its funding. Metro Homes did not return a call for comment.

Bayonne is also in the mix. However, the city is facing what Mayor Mark Smith terms a “fiscal nightmare.” In many ways, the city is relying on the development of the southern end of its waterfront to help right its ship.
The Military Ocean Terminal, which was once a U.S. Navy installation, is a 2-mile stretch of land that pokes into the Hudson Harbor. It was closed a decade ago, and hundreds of acres of land subsequently were made available by Bayonne for residential, office, and retail development with parks and access to the waterfront.

Luxury-liners operated by Royal Caribbean and Celebrity Cruises have replaced the military ships on the peninsula—renamed Cape Liberty. Developers are striving to create a small city unto itself there, with views of the Statue of Liberty and ferry service to Manhattan. One development at the site, a 444-unit project built by Dallas-based Trammell Crow, is slated to open this summer.

Such projects are intended to take tax-exempt properties and put them on the tax rolls, a change Bayonne is counting on to help address its financial woes. But the tight credit market has put a squeeze on developers. Short Hills-based Roseland Property has asked the Bayonne Redevelopment Authority to restructure its deal for 447 condominiums and change them to rentals. No one is sure when any new projects might get started.

“Roseland has offered concessions to the redevelopment authority and will tie into Trammell Crow’s rental project,” says Joseph Nichols, the authority’s executive director. “They have offered to accelerate payments to the city and the starting date.” Turning condominiums into rental units because of poor market conditions is a concession that is occurring up and down the waterfront.

“The Gold Coast will undoubtedly not escape the credit crisis that was brought about by the lack of oversight on Wall Street over the last eight years,” says James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. “The economic stimulus package being put into place by President Obama will aid the area, but there is no doubt that the time of irrational exuberance is over.”

Still, the Gold Coast is moving forward. In Weehawken, a $14 million, 10.5-acre recreation area with multi-use athletic fields in the Port Imperial area opened to the public last year along the River Walkway. Further development is in the works for Port Imperial, including new townhouses and an expanded New York Waterway ferry terminal, which will provide more service to and from Manhattan.
In Hoboken, the old Maxwell House and Lipton Tea plants have been replaced by hundreds of multimillion-dollar condos with views of the Empire State Building. Celebrities like Giants quarterback Eli Manning and Governor Jon Corzine have homes at these Gold Coast sites.

Virtually the entire waterfront in the “Mile Square City” is open to the public, with parks, a beach (no swimming), and even a boathouse that opened last year and provides the first local kayaking program to anyone brave enough to head out onto the Hudson. Pier C Park, a new man-made open space on the river, is scheduled to open this spring.

Yet even Hoboken has been facing a budget crisis over the last year, and at least one developer involved in a joint project in the city, New York-based Tarragon, filed for Chapter Eleven bankruptcy in January.  

While the current financial and credit crisis has dampered some plans, the expansion has withstood a series of economic downturns over the last three decades, and local interests are hopeful it will continue to do so.

“I realize these are very difficult times, but I have watched the Gold Coast survive and prosper over the last 25 years, and I suspect it will continue to grow for the next 25 years,” says Weehawken resident Jerry Law. “Weehawken has undergone so much revitalization, especially after the introduction of the New York Waterway ferries.”

Hughes cites the lower costs of building  on the Jersey side of the Hudson as a potential lure for developers in a down economy. “The Gold Coast developers are going to be aggressive in finding new and diversified corporate anchor tenants for their projects,” he says, “and I would never underestimate what they may be able to achieve.”

Who knows? Someday we might even be able to eat all of the fish.

Paul Drexel is a freelance writer and frequent contributor to New Jersey Monthly.

Click here for more information on the Hudson River Waterfront Walkway.


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Comments
old friends with Paul drexel

This is for the author of the article: You have my email now: anne@alpinefund.com. Send me a msg and I will tell you what I think about the credit crisis and what will happen as a result to the homeland. I watched most of Angela’s Ashes on TMC tonight, and the father reminded me so much of you, I had to look you up.

Posted by: anne ronan, alpine | Sep 08, 2009 01:37:01 AM |



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