Glory Days Ahead

The redevelopment of Liberty Harbor is poised to be a huge success for Jersey City.

With rents in Manhattan expected to increase 7 percent in 2012, it is no surprise that many apartment seekers are looking to the outer boroughs and New Jersey as a refuge. Queens, Brooklyn and Hoboken are well-known hot spots for young professionals looking for a better bang for their buck when it comes down to both space and amenities. Get ready to add Jersey City to that list.

The state’s second largest city sits just over the Hudson River from Lower Manhattan. It has been quickly overcoming its stigma of urban decline thanks to the availability of underdeveloped waterfront land. The industrial businesses that vacated from the 1950s through 1970s left behind a plethora of vacant rail yards and factories, space that allowed for a full-on urban renaissance that began in the 1980s and is still moving at full steam today. This is perhaps most visible in the success of the Exchange Place financial district, colloquially called “Wall Street West,” which experienced a rapid construction of high-rise office buildings—assets that are now occupied by the likes of Goldman Sachs, UBS and Merrill Lynch. Add in a light rail system that debuted in 2000 and now offers seamless access to Manhattan-bound PATH trains and you have an area primed for extremely successful transit-oriented development.

“There is a ton of land and it is not developed, and it is extraordinarily convenient to be next to New York City,” says Christian Giordano, principal & director of Architectural Design at HLW International LLP, a global firm that is designing several high-profile multifamily developments in Jersey City. “The city knows they are sitting on valuable, undeveloped land, so they are really encouraging developers to come in and build these apartments. And the developers are trying to get the one-bedroom crowd that wants a bigger place and wants to have a little bit of an easier  lifestyle than living in Manhattan.”

HLW International is currently designing a series of towers for a joint venture between Mack-Cali Realty Corp. and Ironstate Development Co. in Exchange Place. The first phase of the development will include two waterfront towers with approximately 500 units each. Ground should break in late 2012 with an expected construction period of two years.

Just a few thousand feet southwest of Exchange Place is Liberty Harbor, a high-density, transit-oriented infill redevelopment that is home to some of the city’s newest multifamily projects. The 80-acre, 28-block neighborhood is home to 225 Grand, another HLW International designed building, this time developed by Ironstate Development Co. and Kushner Real Estate Group. The fact that this building leased up just 10 months after its May 2010 completion demonstrates just how strong Jersey City market fundamentals are.

“Jersey City is unique in that it has better transportation to Lower Manhattan, and in some cases Midtown Manhattan, than the Upper East and Upper West Sides,” says Jonathan Kushner, president of Kushner Real Estate Group. “The young professionals want to live here and save the money that they would otherwise spend living in Manhattan and still have a high-quality housing experience with convenient transportation and access to nightlife and parking. It’s just a really great way to live.”

A new urban framework

Liberty Harbor, which enjoys views of the water, Liberty State Park and the Statue of Liberty, has been looking for a makeover since the early 1970s when the industrial sector left. While various plans have come close to materializing over the years, a plan drawn up by Duany Plater-Zyberk & Co. (DPZ) has stuck and is proving to be a huge success for the city, developers and architects involved. The plan, which was adopted by the City Council in May of 2001, certainly had some big promises to fill with DPZ’s claim that it would be “perhaps the most thorough exemplification to date of the principles of New Urbanism.”

“This redevelopment was like putting a puzzle together,” says Maryann Bucci-Carter, supervising planner at the Jersey City Division of City Planning. “What we could have gotten, and in a lot of places what you typically get, is a gated community that is like a multifamily pod. There could have been ten different projects like that on this site. But instead, when you cross the street into Liberty Harbor you feel like you are just in another neighborhood of the city.”

Bob Cotter, director of the Division of City Planning, chalks up a major portion of Liberty Harbor’s success to the genius of DPZ.

“They did an excellent job of knitting together the streets and the grids so that you don’t feel like you have gone through the looking glass,” Cotter says.

Liberty Harbor’s major developer, former North Bergen, N.J., mayor, Peter Mocco, brought DPZ into the game plan after a recommendation from Cotter. The redevelopment plan took a gamble and incorporated a proposed light rail that was a big stretch at the time, but “magically, the thing got built,” says Jeff Zak, vice president of development at Mocco’s firm, Liberty Harbor Holdings.

“We kept our fingers crossed that it was going to happen, and it did,” Zak adds. “Liberty Harbor is now one of the truest transit-oriented developments there is because we have two trolley stations on site—they are not proposed, they are really here.”

The light rail tracks actually serve to separate Phase 1 and Phase 2 at Liberty Harbor. While Ironstate Development and Kushner Real Estate Group are executing the largest standalone projects on the Liberty Harbor grid, Mocco and Zak have already built 300 townhomes and three residential towers with a mix of condos and apartments totaling 600 units. They have plans for an additional 8,000 residential units.

Mocco, DPZ and the Division of Planning took care to make Liberty Harbor flow like an extension of the adjacent historic neighborhoods of Paulus Hook and Van Vorst. Brick facades, ground floor retail and pedestrian-friendly streets were all prominent features of the redevelopment plan. Parking is taken off the street and out of sight thanks to the clever inclusion of parking structures, either internalized or hidden behind the residential buildings. The end result is a 100-unit-per-acre density with a relaxed urban feel.

“We are not trying to overbuild it,” Zak says. “We are trying to keep a Greenwich Village kind of feel to the streets.”

While the redevelopment was designed with all demographics in mind, Liberty Harbor has found the majority of its success among single New York workers who are 35 years old or younger. These renters or buyers are often in a “transitional housing mode” where they will live in Jersey City for five to eight years while working, and then move into the suburbs to raise a family.

“In spite of this, if you walk the streets of Jersey City, especially now in the warm weather, baby carriages are abounding,” Zak says.

With the first phase of Liberty Harbor almost entirely finished or under construction, Zak and Mocco are looking to begin Phase 2, which unlike Phase 1, has never been developed and lacks any infrastructure. In spite of the roughly $10 million required upfront for roads, sewers and utilities needed prior to breaking ground, Zak remains extremely optimistic considering the success that the first phase of Liberty Harbor has already enjoyed.

“We developed the pedestrian-friendly style and low-key neighborhood that is very appealing, and it is being received very successfully,” Zak says. “We are going to continue our master plan, and there is no reason to change anything.”

Scaled up architecture with community benefits

The Division of City Planning has been actively seeking to ratchet up the quality of architecture in Jersey City over the past 20 years to help raise property values and in turn tax revenue, which will benefit some of the city’s older communities. Waterfront areas like Liberty Harbor are especially important.

“I make the analogy to a cash crop,” Cotter says. “You put the best plants, the one with the highest production values, on the waterfront land because it is the most fertile. If you want to get the world-class users, you are going to need world-class architecture.”

But in order to get the best, Jersey City is willing to be a bit more flexible in regards to the needs of developers and architects compared to other cities, according to HLW’s Giordano.

“Jersey City is great in the respect that they will hear what the developer has to say, and they will actually think about it. They might push back if they feel that it is more important to have the right thing for Jersey City, and they will ask us to adapt for it,” Giordano says. “Or they might see that our idea makes sense, and realize that if they aren’t amenable to some of the developer’s needs, they are not going to build. It is not New York City, where you follow every rule to a tee and there is no messing around. Here it is a give and take.”

But the Division of Planning does add that the needs of the Jersey City community will always take precedence.

“While there is flexibility in the zoning, and there is flexibility for the architect to create the best product possible, at the same time we let them know up front about all of the components that the community needs to make sure that the development doesn’t have any negative impacts,” says Bucci-Carter.

A quintessential example of the materialized Liberty Harbor redevelopment plan is HLW’s 225 Grand. It is currently the largest single residential property in the new neighborhood. The 348-unit community consists of a 15-story concrete tower with a glass and brick façade and a lower five-story wrap built from lightweight steel that includes a small retail portion and internalized parking. The luxury rental comes complete with a full host of amenities including a doorman, fitness center, billiards room, lounge, business center and a roof deck pool on top of the lower portion. Edward Shim, a senior designer at HLW who worked on 225 Grand from the start, says that a well thought-out amenity package is especially important in Jersey City.

“Unlike New York, where all of the amenities are available down the block, Jersey City currently lacks that support,” Shim says. “As a result, the developers are trying everything they can to provide those amenities with the asset.”

The fully leased property has eliminated concessions and enjoys rents that continue to grow, performance markers that demonstrate the overall strength of the market, says Joshua Wuestneck, senior vice president of development at Ironstate Development Co.

“We are extremely bullish on the rental housing market in Jersey City and in the shadow of Manhattan in general,” Wuestneck says.

The success at 225 Grand serves as a launching point for the partnership’s next two developments in Liberty Harbor, the first being 18 Park, a 422-unit building located two blocks to the south. Construction will commence in 2012, allowing for a slated occupancy by fall 2013. The property will include a custom-designed facility that will serve as the new home for the Boys and Girls Club that is currently located on the site of Ironstate and Kushner Real Estate Group’s third, and largest, project in Liberty Harbor.

“The whole plan kind of came together organically with the Boys and Girls Club, which needed an injection of capital into their organization,” says Wuestneck. “It also allows the club to remain in the same area, which was important for them. It has certainly been a win-win situation for everyone.”

The project, which for now is called Block 5, will entail a 45-story podium rental tower where the Boys and Girls Club (currently located in a repurposed coal bunker) now sits. The site, which will also house a 10-story rental structure, will total approximately 670 units when completed. The asset will also have the distinction of serving as a welcoming gateway for Liberty Harbor from the historical districts to the north thanks to some clever tweaks to the street grid. The plan calls for an extension of Grove Street, which terminates at the Boys and Girls Club, and the revitalization of an adjacent underutilized park.

The yet-to-be-named 45-story tower designed by HLW International will feature a similar amenity package and design to what is currently being offered in 225 Grand. There will be an outdoor pool with deck space located on top of the roughly eight-story parking/residential podium. The outdoor element will also include some green space, a playground and a miniature dog run. Interior amenities should include a multi-use lounge and a fitness center. The building’s design also focuses on improving what is available in the immediate vicinity, which becomes an additional amenity for both residents and Liberty Harbor as a whole.

“Aside from redesigning the park to become an attractive amenity not only to this building, but also to the surrounding buildings in the area, our solution was to come up with a lobby entrance and ground floor that was double-height,” Shim says. “The lobby will be directly across from the park and flanked by two larger pieces of retail. The two-story retail element will activate the street level and bring some life and people into this development, which really should become the focal point for this particular area.”