The Bayonne City Council pumped the brakes on giving final approval for a $65 million bond and a 30-year payment in lieu of taxes (PILOT) deal for 1888 Studios, citing the need for further review of recently negotiated details.
By Daniel Ulloa/Hudson County View
Joseph P. Baumann Jr., the chairman of high-powered law firm McManimon, Scotland & Baumann, explained that Togus Urban Renewal, LLC has an extensive plan for a movie studio at the old Texaco oil refinery site.
“It was a collective effort to get us here today. Bayonne has been trying to get this property back on the tax roll for decades,” he said.
Baumann, who explained details of the project at a special meeting last month, said the land laid foul for decades.
1888 Studios will be at the base of the Bayonne Bridge and includes a riverfront walkway to accomodate bikes and emergency vehicles around the peninsula.
The ambitious $925 million project estimates creating 2,600 union jobs during construction, with a tentative completion date somewhere between the third or fourth quarter of 2025.
“That’s almost unheard of in New Jersey,” Baumann said regarding the scale.
He continued that 1888 Studios would create a range of jobs for 2,100 people once finished.
Those include full-time jobs in management, crew, stunts, editing, production, casting, makeup, transportation, special effects, and camera work. Many of them would be union jobs as well.
He also asserted that the project would inject over $190 million into the economy annually.
“The PILOT would pay an average of $3.9 million a year to the city for 30 years.”
A consultant on the project, Baumann also explained that 1888 Studios would be the largest employer in the city after the Bayonne Medical Center, offering a total of 1,867 annual jobs.
Jerhel Plastics, which employs 500, is the Peninsula City’s largest private employer.
Furthermore, there will be an annual service charge paid to the city to pay off the $65 million bond, which he assured wouldn’t be passed off onto taxpayers.
The agreement has provisions to allocate $2 million for stormwater improvements, along with a large contribution to the affordable housing stock.
“It will be the largest fee Bayonne will receive probably ever,” Baumann exclaimed.
Gail Godesky, who spoke out against the project last month, noted that the original proposal had seen significant alterations in the new year.
“The mayo r… did say there would be a lot of benefits. By no means am I against this project. But I am against the $65 million fund,” Godesky said.
“We, the City of Bayonne, are going into the lending business. It is wrong. We were promised the same benefits with a lot of projects. What will we get if we give you $65 million?” she asked.
Baumann said the changes to the redevelopment’s plan did not change the overall financial projections of the project.
“There’s the public park and walkway. There’s the ratables. They’ll be substantial. They’ll be the largest or second largest taxpayer in the city,” he rationalized.
Baumann noted that having no residential units means the costs to the city would be marginal.
Godesky was concerned about the potential financial burden to the city, which Baumann said was understood, continuing that he felt the changes were relatively minor.
“There will be plenty of immaterial changes until the project is finished,” he added.
Godesky accused him of deceiving the public, to which Baumann took offense.
“I will not have you challenge my integrity. I have not deceived anyone. We were truthful throughout the entire process,” Baumann replied.
She responded that she meant the process had been deceitful, not Baumann himself, to which he said he appreciated the clarification.
Political consultant Pat Desmond, speaking as a private citizen, said he still did not support the bond, though he is still in favor of union labor on the project.
“I don’t support the $65 million bond. I support the union. How much does your firm stand to make from the $65 million bond?” Desmond asked.
“I may not be the firm handling the bond,” Baumann said, though indicated the largest theoretical sum they could charge is $65,000.
“The PLA (Project Labor Agreement) was actually negotiated and executed. A lot of effort went into this. It’s 100 percent union labor,” Law Director Jay Coffey noted.
Resident Mike Resigno asked if the walkway would connect to Dennis P. Collins Park. Baumann said they’d need to the Port Authority of New York and New Jersey to sign off on that, but Mayor Jimmy Davis is pushing for it.
“There’s a security issue on the Port Authority part of people walking under the bridge. At a later date, hopefully, we can arrange it,” Coffey stated.
“The $65 million we’re going to be bonding here. How are we going to get that money?” questioned Dave Solari.
Baumann said they would get an underwriter that would lend it.
“If this belly ups, things do belly up, who will be liable if it does?” Solari asked.
“We planned for it bellying up. The developer keeps paying,” Baumann said.
He further stated that Togus would lose the property if they didn’t keep up their payments, which would allow the city to sell it to someone else.
He also wanted to know how much revenue would go the schools, to which attorney Mike Hanley said they would get about 35 percent of the revenue generated for the city.
Council President Gary La Pelusa, who expressed dismay with the changes to the project at the special meeting, said he didn’t feel comfortable moving it forward just yet.
“We are not moving on this resolution this evening. We’re a little concerned. We hear the public talking about changes being made. I want to see this redevelopment agreement before we vote. There’s been a lot of moving parts. We want more time to review all this paperwork.”
Hudson County Building and Construction Trades Council President Pat Kelleher thanked the council for their support of the PLA, which was signed yesterday, noting that he said 20 percent of the labor force would be residents and minorities.
Additionally, financial consultant Bob Benecke said parking was moved from underground to above ground to save $100 million created by inflation.
“We raised the elevation of the ground between 12 and 14 feet. We moved around the film studio space,” he explained.
“Where are the utility buildings?” La Pelusa asked.
Benecke said they didn’t need the utility buildings because they eliminated the underground garage.
“We do have leads on leases,” he added.
“Could you expand on the $190 million benefit annually? La Pelusa asked.
“The average employee … is going to make at least $65,000,” Benecke explained.
He noted that 2,100 people would then make $130 million and spend it locally. The places where they do business will then do business with others to make up the difference.
“We actually brought them down to be more realistic … This is not a self-contained studio,” he added.
Benecke also pointed out that Togus would rent out studio space to a range of film and television production companies.
Ultimately, the ordinances related to the project were carried unanimously (5-0).
“It was supposed to be ready, and it’s not,” La Pelusa said.
“The thing that wasn’t ready was the Redevelopers Agreement (RDA) and the LPA. They’re saying they want time to look at this,” Coffey explained.
There will be a special Council Meeting Regarding these three ordinances for studio 1888 on Wednesday, March 1. I hope the public attends this meeting as it is vital to the taxpayers of Bayonne. As a citizen of BAYONNE and a taxpayer I am not against the project, however I am against going into the lending business and giving a developer $65 millions Via a redevelopment area bond. Keeping in mind they are still getting the pilot as well. We have all been hit with inflation and they would be getting the bond at the municipal rate. Can you get your mortgage at the municipal rate? Please show up.