City officials want to jumpstart long-delayed development plans at two sites downtown, but they claim construction can only begin at the expense of 25 affordable housing units, and the City Council isn’t buying it.
The council has demanded that the city find a way to get construction started – without sacrificing the affordable housing the developer is required to provide.
At the center of the debate are two sites on First Street that were once 110 First St. and 111 First St. Both properties are owned by Lloyd Goldman and the latter property was once home to the ill-fated 111 First St. artists’ studios.
Both buildings were eventually torn down. Today, 110 First St. is a vacant lot, while 111 First is home to a heap of old bricks that once housed the old arts space. The residential housing planned for the two locations has been stalled for the last six years. Unbeknownst to the council, the city attorney has been negotiating with Goldman to break ground at 110 First St. this year.
The development of 110 First St. and 111 First St. is central to the city’s realization of the Powerhouse Arts District.
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“We recommend this to the council because we think the benefits to be obtained from this settlement outweigh what we’re giving up,” Corporation Counsel William Matsikoudis told the council members. “What we’re getting here is a jumpstart to a project that will create hundreds of jobs – 20 percent of the [jobs] will go to Jersey City apprentices – and will increase annual revenue for the city from $110,000 to $1.5 million.”
But several members of the council called this agreement unacceptable and have told Matsikoudis to go back to the negotiating table. The council was supposed to consider a resolution on this new agreement between the city and Goldman last week, but after resistance from several council members the administration withdrew the resolution.
A shrinking dream
The development of these two properties is central to the city’s realization of the Powerhouse Arts District, which covers an eight-block area between the Pavonia-Newport area and Grove Street and could eventually include an extended art-infused plaza and walkway. The Powerhouse District concept is supposed to make Jersey City an arts destination that will bring in tourist dollars and create jobs.
But this dream has never materialized and much of the original plan for the Powerhouse District has been scaled back. For example, plans to have 50 percent of the area’s new housing designated as affordable housing for artists has been cut to 10 percent and the city has granted variances to developers to build luxury housing in the district.
Much of the rest of the area now sits undeveloped and in limbo, partly due to the 2007-2009 recession and weak economy.
More than 10 years ago Goldman waged a bitter legal battle to evict and otherwise remove artists from the 111 First St. lofts, which had been home to artists’ studios since the 1980s. After the last of the artists had moved out, Goldman then fought an equally bitter legal battle with the city for the right to demolish 111 First, which he wanted to redevelop, but which the city said was an historic property.
Goldman and the city eventually settled. Goldman was allowed to demolish 111 First St. and develop both the 110 and 111 properties in exchange for numerous concessions to the city. Among the agreements Goldman made was that he would include 25 affordable housing units in his 35-story development at 110 First St. and contribute $2.5 million to the affordable Housing Trust Fund. (Separate affordable housing units and artists’ lofts are planned for the new 111 First St. development.) The planned development at 110 First St. would have a total of 452 units, including 427 market rate apartments. The 110 First development has already received a tax abatement from the city and has also received site plan approval.
Money woes blamed on affordable housing
According to Matsikoudis, Goldman has claimed that he and his business partners have had difficulty obtaining financing for the 110 development. Goldman has further claimed that the required 25 affordable housing units are the reason the project has not been able to get financing – an argument few on the council believe.
“I know this is a really difficult decision and it’s one that I share,” Matsikoudis told the council. “But what we’ve seen over the last six years or so is nothing. There has been no development…One partner after another has walked away from this deal, in large part because of the insufficient rate of return they would get from these 25 units in this 452-unit building.”
Matsikoudis suggested that Goldman’s $2.5 million contribution to the city’s Affordable Housing Trust Fund could help get home family style housing built in the Jersey City Height or in parts of the inner city. An earlier $2.5 million contribution from Goldman has already helped fund a workforce housing development in the Heights.
Council members, however, were unwilling to let Goldman off the hook for the 25 units and were particularly concerned that the landowner’s $2.5 million contribution to the Affordable Housing Trust Fund would probably be used to build affordable housing in a different part of the city, not downtown.
“Is there anything in this agreement that requires that the $2.5 million be used to create affordable housing near this development,” asked Councilman David Donnelly. “I think the way to do affordable housing is not to concentrate them in one community, but to spread them out throughout the city.” Cities, he added, fare best when they are “economically diverse and mixed.”
Matsikoudis said that if the city continues its demand that affordable housing be included in the 110 First St. development, “there is a major question mark about when we’ll see anything developed on that property.”
“That’s the wrong way to see this,” said Councilwoman Viola Richardson. “The right way to see this is to get 25 affordable housing units built at the site.”
Kevin Pollack, a board member with the Powerhouse Arts District Neighborhood Association was barred from addressing the council last week. But in a statement he released later he stated, “The points brought forth by the council members were accurate and fair. The Powerhouse Arts District Neighborhood Association supports affordable housing on-site and in the district, in accordance with the Powerhouse Arts District Redevelopment Plan. The Powerhouse Arts District plan was developed with broad community involvement, and input from such well respected national organizations as the Urban Land Institute. [We strongly believe] that the Powerhouse Arts District Plan, as written, is viable zoning for the district.”
Construction workers: Get development going
Several construction workers last week said they want to see the 110 First development move forward as quickly as possible.
Ed Pickett said he has been out of work for a year. The loss of his income has not only affected his ability to buy basic necessities and make ends meet, he said, but has also hurt his ability to support local businesses.
Normally, “My disposable income would go to spending money in restaurants, Home Depot, the White Star, [buying] birthday presents. At this point, being out of work as long as I have, you really have to tighten up the purse strings.” Construction at 110 First St., Pickett added, “is not only good for union construction trades, and construction trades in general, but it’s good for the entire economy for the city.”
E-mail E. Assata Wright at awright@hudsonreporter.com.