The City Council at their Wednesday meeting approved by a 6-2 vote a settlement with the owners of the 110 and 111 First St. buildings. Ward E City Councilman Steven Fulop and Ward F City Councilwoman Viola Richardson voted against the settlement. Both received standing ovations for their votes.
The settlement, rumored for months and only made public after an article in a June 25 edition of this newspaper, would end the litigation between the city and New Gold Equities, the New York-based company operated primarily by real estate mogul Lloyd Goldman. It would also allow New Gold to build luxury apartment towers in place of the two buildings, and escape paying more than $70 million in fines.
The 111 First St. building is especially controversial because it used to hold artists’ lofts, but the artists were evicted by Goldman after a series of court battles.
After that, the city was in both state and federal court for over a year with New Gold over a number of issues, including New Gold’s wanting to get around the special zoning in the city’s Powerhouse Arts District (a special district that includes both buildings). The zoning would restrict their right to build a high rise.
New Gold also filed a $100 million federal lawsuit claiming that their civil rights were violated.
But in December 2005, litigation was put on hold by State Superior Court Judge Maurice Gallipoli to allow both sides to achieve a settlement rather than exhaust time and legal expenses.
Gallipoli also set a June 30 deadline for the settlement to take place.
That meant the city had to beat the clock. Wednesday night, the settlement was passed.Controversial
But the resolution did not mean satisfaction for everyone.
A number of residents who have moved into other buildings within the Powerhouse Arts District – 10 blocks of historic warehouses that have been designated as arts and entertainment district – as well as their supporters, were upset that the city was settling with a building owner and seemingly allowing him whatever he wished.
“Six hundred stories of glass and people is not an arts community, but a developer’s dream,” said Jonathan Wolf, an artist who resides in the Arts District. Details of the settlement
The settlement will stipulate from New Gold the following:
* Build one if not two residential towers within the 111 First St. area that could range in height from 40 to 60 stories. They could contain up to 710 units.
* Build one 40-plus story tower on 110 First St. with 345 units.
* Both buildings would have to be designed by a “world class” architect. (Suggested were Rem Koolhaas and David Childs.)
* Reconstruct the original façade of 111 First St. * 117 units will be affordable housing, with 59 within the towers and 58 off-site. If the 58 aren’t built, then New Gold is liable for $150,000 per unit, or up to $8.7 million.
* 120 artist work/live lofts or studios to be constructed at 111 First St., with 60 of them to be discounted by 30 percent for certified artists.
* The base of 111 First St. must have 16,000 square feet of art gallery space and about 6,500 sq. ft. area for live entertainment. The base of 110 First St. is to contain a gallery and restaurant overlooking a proposed sculpture garden between 110 First and the building currently under construction next door.
* A $1 million donation to the city to be divided between the Loew’s Jersey Theater in Journal Square and the Jersey City Museum on Montgomery Street.
* $45,000 to be paid to the city for legal and engineering inspection costs.
But the settlement unfortunately also frees New Gold from paying any of the $76 million in fines as the result of fire violations in the 111 First St. building cited between 2001 and 2005.
The city’s corporation counsel, Bill Matsikoudis, pointed out in a memo that it would be difficult to collect the fines is that there a limited time frame to collect the fines. It would have to be ordered by a Municipal Court or State Superior Court.
Also, the settlement allows New Gold to be allowed to deviate from the restrictions of the PAD, which allows for buildings 12 to 14 stories and a 90-day marketing period to artists.
As Matsikoudis stated in the memo, “In short, this settlement is not only reasonable and in the best interest of the city, but will be to Jersey City’s great benefit.” They disagree
Matsikoudis made a presentation to the council and the audience in the city council chambers about the Powerhouse Arts District and revealed some details about the settlement, to emphasize the positives.
Matsikoudis pointed out the city was “engaged in six different lawsuits” that the settlement would put to rest.
He said the city could lose millions of dollars.
But at least 50 people who came out to hear the settlement either voiced their displeasure while seated or at the speakers’ podium.
Many had stickers on their shirts and dresses that read “NO TOWERS IN THE PAD.” Nearly three hours of the 5.5 hour meeting were spent on discussion, public comment, and voting on the settlement.
There were 23 speakers who spoke out on the settlement, as they tried to implore the city council to not capitulate.
Carrie Craft lives with her husband Robert Chu at 140 Bay St. Both Craft and Chu spoke out, pointing out that the Powerhouse Arts District is not just artists but also professionals with over $75 million investment in the area. They also asked of the council to table the settlement to allow it to be studied further.
“We will be heard and taken seriously about the matter or we will take appropriate action,” said Craft.
But the highlight was Elizabeth Onorato, a former artist who had an arts studio in the 111 First St. building when it was occupied by artists.
Onorato read from a transcript of a City Council meeting from November 2004 when the Powerhouse Arts District was approved by a 9-0 vote.
She wanted to remind the four remaining members of the council who were in the council chambers Wednesday – City Council President Mariano Vega, Ward D City Councilman Bill Gaughan, City Councilman at-Large Peter Brennan, and Ward F City Councilwoman Viola Richardson – that they had approved the PAD back then.
Onorato received a standing ovation when she finished and a smile of recognition from Richardson and Vega. Ricardo Kaulessar can be reached at rkaulessar@hudsonreporter.com.