As Bayonne continues to rebound from the devastation wrought by the 2008 financial crisis and recession, there may be no better indication of the city’s development recovery than the kick start of a project cast aside for years because of that economic downturn.
Baker Residential of White Plains, N.Y., has resurrected the residential project slated for the former site of the Hi-Hat Caterers, 190 West 54th St., according to President Christopher Baker.
The original project was greenlighted in 2003, getting its initial city approvals that year and subsequent state approvals up to and including 2007. Construction on it started in the fall of 2007, but the project was shelved the next year.
“We had an initial sales offering in spring 2008, but then came the market slowdown and we concluded we should suspend the project,” Baker said. “So it sat abandoned – mothballed, if you will – from 2008 to 2013.”
Following that period, Baker said the city of Bayonne did a study that designated the site as an area in need of redevelopment.
A new site plan was then developed by Baker and resubmitted to the city. What had been plans for 158 large two- and three-bedroom condominium homes was changed to 248 apartments [studios, one bedrooms, and two bedrooms], more in line with what residents are seeking today.
Since approval of that plan in the summer last year, the $60 million project is moving ahead, with Baker currently arranging funding.
PILOT approval was key
Part of what allowed Baker to move forward was the city’s approval of a PILOT (payment in lieu of tax) agreement, according to Baker.
“So it sat abandoned – mothballed, if you will – from 2008 to 2013.” – Christopher Baker
The City Council approved the ordinance for the PILOT at its Oct. 21 meeting.
“We’ve got the PILOT; a 25-year term, but the term doesn’t start until the building is finished,” Baker said.
Even though the city okayed the PILOT, the move will be good for the city, according to Tax Assessor Joseph Nichols.
“The project was originally designed in 2006 for 150 condominiums, but the market for new condominiums died and the project has been dormant for many years, producing only $149,643 in total taxes, only $62,850 of which goes to the municipality,” he said.
But with the new development, the tax revenue on the property will likely be about $750,000.
“Another key rationale for PILOTS is to attract high-quality construction or development for which nearby cities are competing and which would not be built in Bayonne without the incentive of a PILOT agreement,” Nichols added.
Nichols said the financial benefit of the PILOT agreement is even greater when you factor in that it allows for 95 percent of the money paid under the PILOT to go to the municipal budget, rather than the 42 percent that otherwise would. Therefore, under the terms of the PILOT the city will receive much more money than it would have under conventional taxation.
“In short, the developer pays less, but the municipal budget receives more,” Nichols said.
Next steps for development
The next step for the project is the Baker’s creation of construction drawings, which are then submitted for a building permit. The drawings are expected to be completed in the spring.
Then construction would begin within 45 to 60 days after issuance of the building permit.
Project amenities include a fitness center, club room, pool, planted area, and roof terrace.
Joseph Passantino may be reached at JoePass@hudsonreporter.com.