The Bayonne City Council passed three ordinances last night to transform the former Texaco site into 1888 Studios, which included a $65 million bond and 30-year payment in lieu of taxes (PILOT) agreement, on the third time they considered the measures.
By Daniel Ulloa/Hudson County View
The complexity of the deal led to it being carried twice in the past month. Togus Urban Renewal is the studio’s owner responsible for the development of the old Texaco site at the end of the peninsula by the Bayonne Bridge.
“In January and February, you did the right thing. You held off to do the research. I’m hoping in today’s meeting, you will do the same. I’m not against this project. I am against the $65 million dollar guarantee. Why does a French financier and his investors need our guarantee? Due to inflation, major changes were made to the design,” Gail Godesky said.
“Can you stick to the topic?” Council President Gary La Pelusa asked.
“$65 million is due to the financial agreement. The project lost some major pieces and doesn’t warrant a $65 million guarantee. Why can’t the group go to outside sources? We have seen a decline in the financial markets. Will it impact the rate?”
Michael Hanley, of NW Financial and an advisor to the city, said that figure reflects on rate at this time and, like anything else, could trend upward or downward.
“This project is a really complex project. It’s an incredible benefit to the city. What we’re doing is providing a certain amount of financing. We have protected ourselves in lots of ways,” Hanley asserted.
“We are providing a small cost of funds benefit to the developer because we have a site that’s been terrible. It requires large amounts of remediation.We negotiated for years to get where we are. There’s been tons of hearings. It’s been improved at the state leve. It will both lower taxes and create local high-paying jobs, which is not common. It’s really going to help the city.”
Hanley reiterated that the deal could not go through without the $65 million bond and eventually Godesky asked how the site can already have construction being done.
“There’s some pre-construction work being done. This is their property. They’re free to do that. If we approve this tonight, they don’t start this project tomorrow. They started this project three or four years ago,” Law Director Jay Coffey said.
“All you have now is the pre-construction work that needs to be done. The DEP [Department of Environmental Protection] work. The remediation. The permits that have been pulled have not been pulled for putting up … buildings.”
He said that compared to the nearly $1 billion total project cost, $65 million is not a particularly large commitment from the city.
“It’s a smart investment. It’s not our obligation to pay back,” Coffey added, also noting that market tumult could cause problems for the project.
“If we have a financial calamity, this doesn’t get built. That would be a tragedy for Bayonne. We’re committed to this. We don’t spend dime one … until they have their financing in order.”
Resident Colin Edwards said that Bayonne has seen an uptick in development in recent years, yet residents never seem to reap the benefits of new jobs.
La Pelusa stated that this project would create 2,700 union jobs and 2,100 permanent jobs.
“The PLA [Project Labor Agreement] said it has to be local unions. There’s a lot of Bayonne people in those local unions,” he added.
“Why not put it out there?” Edwards asked.
Coffey said there is already a 38-page agreement drawn up between the developer and local unions, to which Edwards expressed frustration that non-union workers would not have an opportunity here.
“There’s going to be a job fair dedicated to this to make sure the issue you raised is resolved,” 1st Ward Councilman Neil Carroll said after Coffey mentioned the job fair.
“A lot of these families have been here for years and can’t get a job,” Edwards continued, to which La Pelusa disagreed and said a lot of good things are happening.
2nd Ward Councilwoman Jacqueline Weimmer said there have been several attempts to turn this site around that have been unsuccessful.
“I did do some research. Three or four other projects at that exact site have failed. But for this developer’s interest in our city …. that site might go undeveloped for another 30 or 40 years. I am wholeheartedly in favor of this project,” she explained.
“This cleans up a very large piece of land. 64 acres total. This represents one of the biggest projects in Bayonne’s history. It puts 2,700 people to work. It creates film education for our youth. This will put Bayonne union members to work. There are fail-safes to protect the city and its revenue,” La Pelusa chimed in.
He also said that Togus would be the largest taxpayer in the city.
“One of my main focuses is to create jobs. We have businesses that closed in our town many years ago. We’re approaching the largest amount of jobs not seen in decades. This project is a great addition to town,” the council president also declared.
The three ordinances related to 1888 Studios passed unanimously (5-0).