The $800 million One Journal Square project, which is being developed by Kushner Companies and the KABR Group, is in limbo right now as the Jersey City Redevelopment Agency appears apprehensive about granting a significant tax break for the project.
By John Heinis/Hudson County View
A series of letters and emails were obtained by HCV after submitting an Open Public Records Act request to learn about the status of One Journal Square.
“Despite many and repeated efforts, not to say the pleas, of One Journal Square, substantive discussions among the parties never resumed except for a single meeting on August 10, 2017,” Genova Burns Partner Eugene Paolino wrote in a February 20th letter to Jersey City Housing Economic Development and Commerce Director Marcos Vigil.
“Interestingly, at that point in time, the Restated RDA [Redevelopment Agreement] was nearly complete and ready for signature … As the direct result of failure of the City and the Agency to meet its responsibilities in connection with the completion of the restated RDA, One Journal Square has clearly been harmed and the project has undoubtedly been delayed, if not more.”
Paolino also reflected on some of the history of the 56-story, two-tower project, noting that the JCRA entered into a Redevelopment Agreement with Kushner Companies and KABR Group back on April 21st, 2015 – back when Jared Kushner was the President and CEO of Kushner Companies.
Kushner has since moved on from the company to become President Donald Trump’s (R) senior advisor and is also his son-in-law.
Furthermore, the local planning board gave One Journal Square full site approval by the end of that same year: November 10th, 2015.
Paolino goes on to say that “the massiveness and the complexity of the project required multiple amendments to the site plan approval,” though the city and the JCRA appeared to be in agreement since the changes would make “the project better, more attractive and more iconic.”
In his March 12th response, Vigil didn’t pull punches, exclaiming that “your claims that inaction by the City is harming the project are completely without merit.”
He continues that the project is not a city matter, the JCRA is a separate, autonomous entity, further stating that “no approvals are guaranteed to any party.”
The correspondence continues to devolve from there, as Joseph P. Baumann, Jr., of McManimon, Scotland and Baumann, corporation counsel for the JCRA, places the blame on the developers for the delays since they made significant changes to the building complex.
“We agree, that as originally conceived, the Project was ‘iconic’ and innovative,”he wrote on March 15th.
“However, the significant proposed reconfiguration of the Project, after the loss of the joint venture partner, which contrary to your correspondence, materially changes the ‘general scope and essential nature of the project,’ [and] raises questions about the impact and viability of the resulting proposal.”
With that, Baumann also disputes the notion that a redevelopment agreement is almost finished and ready to be signed.
As of eleven months ago, WeWork, a co-working and rental space, was an anchor tenant at One Journal Square, but they ended up backing out.
However, in an email sent the next day, Paolino called Baumann’s recollection of the project history “disingenuous,” asserting that “WeWorks [sic] was not part of the original Harwood site plan approval nor the later METP approvals for the very same site.”
The Jersey City Planning Board most recently approved a revised version of the project back in September (h/t The Jersey Journal).
Baumann’s follow-up email on March 27th was even more succinct: “Gene, I respectfully disagree.”
In correspondence from earlier this month, an April 6th letter from Paolino to Mayor Steven Fulop, the attorney reveals some of the more intricate details of the project – including the proposed payment in lieu of taxes (PILOT)/redevelopment area bonds (RAB).
“From an economic perspective, the Project today generates annual real property taxes of approximately $395,720.20,” explained Paolino.
“Is is estimated that, upon completion and financial stabilization of all Project components and based upon a rate of five percent (5%) of annual gross revenues, the project will produce a PILOT of $3,488,768.00 per year, the City of Jersey City and $172,438.00 per year for the County of Hudson.”
He continues that the project is seeking an $8,897,593 RAB. In order to achieve this amount, the developers are requesting 18 percent of the PILOT: which comes out to $620,778.
Paolino insists that the benefits of the project “are incontestable and significant,” pointing to thousands of temporary construction jobs, as well as many permanent ones at Journal Square.
After Nicole Meyer, the current owner of Kushner Companies and Jared Kushner’s sister, went to China to try and solicit $150 million for the project last spring, Fulop came out against a tax break for the project.
Shortly thereafter, a U.S. Senator from Iowa called on federal authorities to investigate since potential One Journal Square investors were offered EB-5 visas – which would allow them to immigrate to the United States in exchange for contributing to the project.
Paolino, a spokeswoman for Kushner Companies, and officials from the JCRA did not return emails seeking comment.