Developers bank on downtown Newark luxury housing market
Thursday, January 26th, 2006JANET FRANKSTON
Associated Press
NEWARK, N.J. - Now that Jersey City and Hoboken have become alternatives to Manhattan as havens for the hip and trendy, New York developers are banking on downtown Newark as the next place for upscale housing.
The latest attempt to accelerate Newark’s long-awaited Renaissance is an Art Deco building at 1180 Raymond Boulevard, just blocks from Newark Penn Station and the New Jersey Performing Arts Center.
Following the successful restoration of another Art Deco tower across the street, Cogswell Realty Group is renovating a 37-story former office building into 317 apartments.
CEO Arthur Stern is trying to lure tenants with valet parking, an 8,000-square-foot health club, a basketball court, a bowling alley, washers and dryers in every apartment, marble bathrooms and, of course, lower rents.
But whether there’s a market remains to be seen.
“That’s the $100 million question,” he said.
Newark has been waiting for years for the housing boom of other northern New Jersey cities to spread its way.
“I don’t know why it hasn’t happened already,” said Linda Epps, president and CEO of the New Jersey Historical Society. “The revitalization effort has taken far too long.”
The largest city in New Jersey struggles with the perception of being poor, crime-ridden and unsafe, spurred from the riots of 1967.
“I am surprised it’s has taken a full generation and them some since the ‘67 riots for the city to have the kind of momentum it seems it has now in its downtown corridor,” said Clement Alexander Price, a professor of history at Rutgers University’s Newark campus. “Newark has incredible infrastructure, a superb location and a lot of bright people.”
The city’s dense downtown and transportation network are an urban planner’s dream.
NJ Transit and PATH funnel commuters into Newark Penn Station. A new transit system expected to open next summer will connect Penn and Broad Street stations, the New Jersey Performing Arts Center, a riverfront stadium and other destinations. Newark Liberty International Airport is about five miles from downtown.
The performing arts center opened in 1997, and a few upscale restaurants have followed. In October, Newark and the New Jersey Devils broke ground on a $310 million, 18,000-seat arena that is scheduled to open in 2007.
While some improvements are visible, the perception of Newark hasn’t changed.
“The riots just scared everyone away from this place,” said Epps, who lives and works in downtown Newark. “People are still frightened.”
Mayor Sharpe James said he believes the perception is changing.
“It’s changing already when we built the arts center,” he said. “It’s changing every day with our airport.”
And Stern hopes it will change with Cogswell’s $109 million project.
“Newark is safe, vibrant and making a comeback,” he said. Stern said his own view of Newark changed since his first visit in late 1997, when he expected to be carjacked.
Now, his company has invested more than $200 million into the city, buying about six acres bordering Military Park for 3,000 units of rental housing planned over 10 years.
The company purchased the Raymond Boulevard building eight years ago, and now construction workers are cleaning the sand colored brick and restoring the terra cotta plates.
Inside, the building has been gutted, fixed up with 1,441 new windows, high-speed Internet and cable lines and four new elevators.
Rent will range from $1,175 per month for a 665-square-foot studio to $2,300 for a two bedroom of about 1,000 square feet, Stern said.
The first tenants are expected to move in July 1, and leases have gone out to three tenants.
One of them, Kevin Ledig, 28, will move from an apartment near the University of Medicine and Dentistry of New Jersey, where his wife is a student. Ledig said living in Manhattan near his job wasn’t an option.
“The rents are ridiculous for shoe boxes,” he said, adding that the commute to work is easy. “I saw a lot of potential (in Newark.)”
But to make others see Newark as an alternative to Brooklyn or Hoboken, developers needed to offer more than a good deal, said John McIlwain, a senior fellow for housing at the Urban Land Institute.
“The building has higher amenities at a lower rent than anything comparable in Jersey City or Manhattan, but they’re trying to offset a worse neighborhood,” he said.
Newark is attracting urban professionals like Haley Peele, 25, who got to know the city as a student at the Rutgers campus.
She lives in a downtown studio apartment and pays $915 per month for the second-floor walk up.
“It’s not so rough,” she said. “It’s kind of like a city that’s trapped in the ’50s and I think that’s charming.”
McIlwain said the developers are betting that getting into Newark early will eventually pay off.
“They may not lose their shirt, but it may take a long time for the value to come,” he said. “It will depend on the stability of the politics of Newark and the perception.”