The little ethnic enclave a stone’s throw from Newark is becoming Jersey’s latest hotbed for urban redevelopment.
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Will Harrison become the new Hoboken? Mayor Raymond McDonough would like to think so. Seventeen years ago, two years after taking office, he initiated a redevelopment plan to transform the Hudson County town’s blighted industrial section into a gentrified neighborhood of condos, rental apartments and hotels, all coalescing around a renovated PATH station.
“I started this project years ago to lower taxes,” says McDonough, 64, reflecting on the burden residents had to bear after the mile-square town’s once-bustling factories shut down several decades ago. The idea came to him in the late 1990s, after an elderly woman broke down in tears in his office because she could not afford to pay her taxes. McDonough found a quick solution for the woman but realized Harrison itself needed a long-term plan.
He started investigating what could be done about the town’s vacant industrial sites. With help from allies in Town Hall, he formulated a redevelopment vision that would come to include tax incentives for developers and enticements, like new residences and shops, for young professionals. “If things pick up in Harrison,” McDonough says. “We’ll be able to help more people.”
After years of planning and promises to residents, and despite setbacks caused by the 9/11 attacks and the recent recession, some of the hoped-for projects have been completed, including a riverfront condo community, a four-story rental apartment building and the $250 million Red Bull soccer arena. This year, developers are expected to break ground on at least six more multimillion-dollar residential projects, and the Port Authority of New York & New Jersey will begin updating its PATH station.
Situated on a bend in the Passaic River across from Newark’s Ironbound district, Harrison once was home to manufacturers like the Crucible Steel Company, Edison Lamp Works, Worthington Pump and General Motors. President William Howard Taft proclaimed the town a “beehive of industry” when he lumbered through on a campaign stop in 1912. However, in the 1960s and ’70s, competition from other states offering cheaper real estate and lower labor costs drained the town of its industry. By the time McDonough took office in 1995, the south end of Harrison was a wasteland of vacant factories and rubble-strewn lots. Tax revenues had declined and local jobs had dried up. “I found myself with all these old industrial sites,” McDonough says. “I was only getting taxes on the land.”
While struggling with the economic downturn, Harrison experienced a series of financial woes, including mounting debt, budget gaps due to cuts in state aid and a twice-downgraded Moody’s credit rating. Three years ago, Harrison closed one of its two fire stations and since has shed 110 municipal jobs, mostly by not replacing fire department retirees. Things began to improve in 2012, when Harrison passed a balanced budget supported, in part, by revenue from the redevelopment, according to Town Hall.
Still, the residential parts of Harrison (population 14,000) have remained solid, with well-maintained, multifamily, wood-frame homes huddled close together on a grid of narrow streets. As in most Jersey towns, property taxes have increased steadily in the past 10 years. These days, taxes on a newly built, two-family home appraised between $450,000 and $500,000 are as high as $15,000, according to realtor Delfa Fermin at the Elite Realty Group on Harrison Avenue. A decade ago, taxes on new two-family buildings ran about $9,000.
A small downtown radiates from the crossroads of Harrison Avenue and Frank E. Rodgers Boulevard (named for the town’s mayor from 1947 to 1995) with shops, restaurants and churches catering to Harrison’s ethnically diverse, blue-collar population. A banner ouside Town Hall declares the citizenry’s support for U.S. troops overseas; directly across Harrison Avenue, the Holy Cross Roman Catholic Church displays a 5-foot-tall replica of the Ten Commandments for passersby to ponder; down the block, Farinha’s Bakery promises Portuguese rolls “made fresh every hour.”
Despite Harrison’s proximity to Newark, a city of 277,000 residents with one of the highest murder rates in the state, the town feels relatively isolated from its neighbor. In 2011, according to City-Data.com, Harrison reported three murders, one rape, 20 robberies and 103 burglaries, compared to Newark’s 94 murders, 58 rapes, nearly 2,000 robberies and more than 2,300 burglaries. Kearny (population 41,000), just north of Harrison, has a more comparable crime rate, with no murders but three rapes, 31 robberies and 183 burglaries reported in 2011.
When McDonough was growing up, Harrison was primarily Irish, Polish and Italian. Today, those groups have been joined by an influx of newer immigrants from Asia and Latin America. More change is coming. In the next 10 years, redevelopment is expected to increase Harrison’s population to between 22,000 and 24,000. McDonough says the town is ideally situated for commuters and business travellers, with easy access to routes 280 and 21 and the New Jersey Turnpike, as well as Amtrak and New Jersey Transit trains and Newark Liberty International Airport.
But Harrison’s most valuable asset—and the key to future growth—is its stop on the PATH line, which offers service to Newark, Jersey City, Hoboken and Manhattan. McDonough calls it “our home run.” Last year, the Port Authority pledged to spend $256 million to design and build a modern, glass-and-steel Harrison PATH station. The current station, built in 1936, is outdated, not handicap accessible, and straining under an increase in weekday ridership, from 6,700 commuters in June 2011 to 7,300 one year later. The new station, scheduled for completion in 2016, will accommodate longer trains and even more riders. An adjacent, publicly owned, 1,440-space parking garage has already been constructed.
The road to redevelopment has not been easy. “I never in my wildest dreams thought it would take this long,” says McDonough, sitting in a leather swivel chair at his desk in Town Hall. His office is cluttered with blueprints, renderings and a commemorative hard hat or two. The nameplate on his desk reads, “Shovels in the Ground.”
McDonough says he was told at least a decade ago that the PATH station was going to be rebuilt, but then 9/11 happened and Harrison’s direct PATH service to lower Manhattan was shut down for more than two years. “When there was no ridership because of 9/11, none of the developers wanted to do anything, so I lost five years,” says McDonough.
The first jewel in the redevelopment crown was Red Bull Arena, with seating for 25,000. In 2006, sealing a deal to lure the MetroStars, a Major League Soccer team (since renamed the New York Red Bulls), Harrison agreed to pay $18 million for about 12 acres of industrial land on the town’s south end and clear it for a stadium.
“We had the land,” says McDonough. “We had mass transportation.” And in Harrison and Newark’s burgeoning Brazilian, Peruvian and Portuguese communities, “we had the fan base. We had everything going for us.”
The Red Bulls broke ground in 2008 and hosted their first game in 2010. While the arena has made Harrison a soccer destination, the town’s arrangement with the team has been strained. The Red Bulls refused to pay property taxes because the town owns the land, until a tax-court judge ruled in favor of the town. The team is now up to date on its tax bill, says McDonough.
McDonough’s deal making does not please everyone. Former councilwoman Maria McCormick, who ran against McDonough in the most recent mayoral election in 2010, says she supports redevelopment, but not the way Harrison has gone about it.
“Harrison was an unpolished stone,” says McCormick. “Anyone would love to build there.” She thinks development could have happened without the town giving away as much in tax abatements and what she calls “sweetheart deals.” She also says Harrison has tried to do too much at once. She characterizes the redevelopment philosophy in three words: “Approve, approve, approve.” Harrison should also be looking to improve its aging downtown, McCormick says, by installing more benches and cleaning up and painting underneath the Route 280 overpass, projects that might be funded by tax dollars or small donations from local business owners. McCormick, who owned a clothing store in Harrison for 22 years, also advocates on behalf of mom-and-pop shops and says the town should make it easier for them to open and thrive. Unless someone is politically connected, she says, it can be very difficult to succeed in Harrison.
McCormick also takes a dim view of the stadium, which she says creates only seasonal jobs. Others complain of the traffic and trash left behind by spectators. “We could have easily put there a nice Target, Lowe’s, something that would create [permanent] jobs,” McCormick says.
But McDonough contends redevelopment will result in jobs—if not full-time positions, at least part-time work to help residents supplement their incomes. “People are struggling,” he says. “It’s tough out there.” As for the stadium deal, the mayor says it provides about $2 million in tax revenue each year, a good chunk of the town’s annual $40 million budget.
Farther north, near the riverfront on Passaic Avenue, a 165-room Hampton Inn & Suites opened in 2004. McDonough declares it a success. “You can’t get a room in the place,” he asserts. The hotel was intended to cater to businesspeople visiting Newark, he says, but tourists use it, too, as a launch pad for visiting New York City.
The first residential project in the Harrison Redevelopment Area (the region around and south of the PATH station), was the River Park development, spearheaded by the Short Hills-based Roseland Property Company in partnership with Livingston-based developer Millennium Homes. “Harrison has always been an attractive location,” says Roseland president Carl Goldberg. The initial phase of the four-story, 300-plus-unit waterfront project, with a view of Newark’s downtown, was completed in 2007—just as the housing market crashed. It took Roseland longer than expected to sell the first 172 units. “The interest in for-sale housing waned,” says Goldberg. Roseland also discovered that many people didn’t want to buy a condo next to GEO Specialty Chemicals, a working plant the developer hopes to shut down. “But it ended up that all the homes were sold,” he says. Two-bedroom townhomes went for $300,000 to $450,000.
The second phase of River Park, launched in late 2012, will comprise 143 rental units. “Rental housing has never been hotter,” says Goldberg, referring to a local and national phenomenon that reflects renewed interest in the conveniences and amenities of urban centers.
Roseland plans to acquire and build on the adjacent chemical plant site, furthering its investment in town. “It’s a community whose time has come,” Goldberg says.
Other developers are forging ahead as well. Ironstate Development, in partnership with the Pegasus Group, broke ground in 2010 on a residential building across the street from the PATH station on a site previously occupied by used-car dealers and auto-body shops. Dubbed Harrison Station 300 Somerset Street, the building, which opened to renters in September 2011, has a Five Guys Burgers and Fries and various retailers on the ground level. “There was a short-term risk,” says Ironstate principal Greg Russo, “but we are very much long-term investors.” He sees huge potential for the PATH location. “It is the last undeveloped station,” he says.
The company’s first completed residential building in Harrison—there will be six—has 275 studio and one- and two-bedroom rental units ranging from $1,250 to $2,500 a month. Those prices are intended to undercut rentals in Jersey City and Hoboken. (In mile-square Hoboken, where many residences are considered walking distance to the downtown PATH station, studios and one- and two-bedroom units in full-amenity buildings rent from $2,100 to $3,500 a month.)
Harrison’s newcomers—including students at Rutgers-Newark and the New Jersey Institute of Technology—seem pleased with the location. “It’s convenient,” says Elizabeth Hewitt, a PhD. candidate at Rutgers, who rented about a year ago at Harrison Station 300 Somerset Street. She says she noticed the new building while commuting by train from Brooklyn.
McDonough says the speed with which rentals were snapped up “lit a fire under all the other developers.” Ironstate, developer of the high-end W Hoboken hotel, a Starwood Hotels & Resort Worldwide property, is partnering with the global hospitality brand once more to build the Element Harrison, a $38 million, seven-story hotel with 138 rooms. It’s scheduled to open near the PATH station in 2014. Ironstate’s planned $750 million investment in Harrison includes another residential building with 324 units, due to break ground this year.
In 2012, developer Heller Urban Renewal demolished the former Hartz Mountain pet-food factory, a 750,000-square-foot industrial building on more than 10 acres on Frank E. Rodgers Boulevard that had been vacant for a decade, to clear the way for its residential building. The project—also called Harrison Station—will consist of six mid-rise towers with 747 one- and two-bedroom rental units, for about $2,000 to $2,500 a month, and about 30,000 square feet of retail space set to open in early 2014.
Across from the stadium, Russo Development has started on a four-story building with 326 studio and one- and two-bedroom rental units and 10,000 square feet of retail space.
Other projects expected to break ground this year include Advance Realty’s Riverbend District, with 600 rental units and more than 800,000 square feet of retail space on Guyon Drive, and Steiner Equities’ 23-story, 200-unit building on the corner of Harrison Avenue and Dey Street.
Harrison also has attracted the Panasonic Corporation, which broke ground in October 2012 near Red Bull Arena on Guyon Drive—a street named after former occupant Guyon General Piping—for its 48,500-square-foot North America Technology Center. The center will house engineering offices and testing facilities for the Japan-based company, which is moving its North American headquarters from Secaucus to Newark.
There’s a reason that the new residential projects feature mostly studios and a limited number of one- and two-bedroom units—those sizes attract young professionals without kids. “We set it up that way because we wouldn’t have the impact on the schools [by bringing in more children],” says McDonough. Harrison has one high school, one middle school and two elementary schools, serving about 2,000 students.
Despite some critics, McDonough, who has won reelection six times, says the community overwhelmingly supports the redevelopment plan. “Everyone is in agreement with what I am trying to do here,” he says.
Harrison native Theresa Dzialo raised her children in Harrison then moved to Toms River, returning to her hometown three years later. Although she fears that redevelopment will make Harrison more crowded, she stands by the mayor. “Raymond has done an awful lot for the town,” she says, “and he really deserves praise. He’s really dedicated.”
As for the pace of development, even the builders acknowledge that supply might exceed demand for a while. “That’s unavoidable,” says Russo, “but the bright side is, it is going to create a neighborhood much more quickly and ultimately drive demand.”
McDonough says more developers are knocking on the door. “I even have developers calling me, telling me—there’s so much interest in Harrison—that if I take another section of town and develop it, give them a call.”
That’s a good sign for Harrison. “Hoboken started their development 30 years ago,” McDonough notes. “I am hoping that, down the road, you are going to have the same thing here.”
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