$40M N.J. tax break for Downtown Jersey City tower

JERSEY CITY — A $163 million residential tower slated for the eastern edge of the Hamilton Park neighborhood will receive a $40 million tax break from the state.

The deal, approved this morning by the state Economic Development Authority, is the second $40 million tax break New Jersey has awarded in as many months to developers seeking to build in the city's booming Downtown.

The 17-story, 397-unit building is planned for the corner of Ninth Street and Marin Boulevard, near the Unico Towers. The developer is Jonathan Kushner, of KRE Group, which is behind the three-tower project going up in Journal Square.

The EDA awarded the tax credits, to be doled out over 10 years, as part of its residential economic redevelopment and growth grant program. The state agency cited KRE's pledge to make 20 percent of the tower's proposed 397 units affordable for households that make between 50 and 80 percent of Hudson County's median household income, $58,442.

Mayor Steve Fulop cheered the news, saying KRE's pledge of affordable units is part of a "seismic shift in priorities" for the city. In years past, developers would hand over money to build affordable units in other parts of the city, but the city is now urging developers to include the units within luxury buildings, Fulop said.

"We want to really focus on building mixed communities," he said, "so people all over Jersey City can live close to the Waterfront."

Plans for the building include a 261-space parking garage topped by an outdoor pool, office and ground-floor retail space and a public park. Construction is expected to begin next month for an August 2017 completion date.

Jon Whiten, deputy director of liberal think tank New Jersey Policy Perspective, which has sharply criticized the EDA's tax break giveaways in the past, is also against the KRE deal.

"Affordable housing is an important goal, but there's no question the developers of this luxury apartment project could provide some moderately affordable units and still make plenty of money for themselves — without getting a $40 million tax break from the state."

Fulop called Whiten's comments "misinformed." Building 80 affordable units in that section of the Downtown would cost $140 million, he said. Fulop declined to take a position on the state's tax-break program.

"If the state is giving out money, my job is to advocate for Jersey City," he said. "I think that we're doing an effective job on that. The state's policy is the state's policy."

Whiten acknowledged that building affordable units is "indeed expensive," adding that four out of five of the units in KRE's new building will be market-rate, luxury homes and "quite lucrative" for the developer.

Over the objections of some residents, KRE won zoning changes last year that will allow it to increase density fourfold in that neighborhood and to build 190 feet, 50 feet more than the maximum allowed height in the area. A KRE official could not immediately be reached to comment.

KRE purchased the land, formerly a Unico Towers parking lot, in December for $13.2 million. A May 2015 appraisal put the value of the land at $28.8 million, according to the EDA.

Source: NJ Online