Newark works to continue rebirth

Real Estate Weekly,  April 16, 2008  by John Majeski

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Officials are hoping to keep breathing new life into Newark.

The city is currently seeking developers to transform property in its Broad Street Station District, an area that includes about 50 acres of developable parcels.

"The Broad Street Station District represents the type of urban transformation Newark has long waited for, creating a truly mixed-income and mixed use neighborhood at the northern gateway to downtown", Mayor Cory A. Booker said in a prepared statement.

Newark is aiming to have a comprehensive redevelopment plan for the area--the city said interest has been "simmering" and that they are buoyed by a new commitment from landowners and institutions--this spring. The district has access to the Broad Street Station and Light Rail line, the city's colleges and its cultural amenities, the city noted.

Meanwhile, Tucker Development Corp. has announced it is under contract to purchase 3.5 acres next to the Broad Street Rail Station downtown, where they're looking to bring a $150 million, 400,000 s/f mixed-use development--what they said would be Newark's first new Class A office space in more than 15 years. Newark's various financial incentives, combined with a less expensive market as compared to Manhattan and being a major transportation hub, have meant solid growth for the former industrial city, officials said.

"It's strong," said Stefan Pryor, deputy mayor for economic development in Newark. "We're seeing a steady flow of developers and tenants looking to do deals in Newark. That flow has not diminished post the market turbulence."

If anything, it's increasing, said Joe Ritchie, CEO of Brick City Development Corporation.

"When everything is booming, people think less about the cost of space," Ritchie said. "Nowadays, they're thinking twice about it." Among the changes to Newark was the opening of the Prudential Center--home to the New Jersey Devils National Hockey League team -this past season. The New Jersey Performing Arts Center is continuing to expand while the city says there are 10,000 housing units of planned residential downtown.

The city last week unveiled a new program--Advantage Newark--to lure more development here.

About 15-20 minutes from New York City, Newark provides a friendlier cost structure for some, said Ritchie and Pryor. Office space in Newark is fetching from the low- to mid-$30s p/sf up to $40s p/sf for premium locations, they said.

Ritchie said current Class A vacancy rates are hovering in the midsingle digits.

According to Tucker Development, its proposed development is eligible for the new Urban Transit Hub Tax Credit Program.

It said a "corporation establishing

an office with a minimum of 250 fulltime employees within one-half mile of a transit hub could realize over $100 million in tax incentives" over a 10-year period.

"The end result is that a large corporation relocating jobs to our Newark development could virtually operate rent free for 10 years," TDC President & CEO Richard H. Tucker said in a prepared statement.

The Midwest Company's vision for 422 Broad Street calls for office space, a 200-room hotel and 50,000 s/f of retail space, including a 25,000 s/f spa.

A Tucker spokesman could not be reached for additional comment.

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