The latest chapter in the saga to redevelop one of Journal Square’s most prominent properties has created yet more intrigue, and more questions were raised last week about the viability of one of Jersey City’s biggest redevelopment projects.
One Journal Square, a vacant lot directly next to the neighborhood’s PATH station, was purchased by KABR Group and Kushner Companies in 2015. The following year, the companies won approvals for 1,725 residential units spread out over two towers, one rising 79 stories and the other 46. 910 parking spaces, over 88,000 square feet of retail, and almost 127,00 square feet of office space occupied by co-working giant WeWork were set for the development.
But problems with the project started showing up early last year. WeWork pulled out of the deal and took $59 million in tax breaks from the New Jersey Economic Development Authority with them. Controversies surrounding Kushner’s solicitation of Chinese investment under the EB-5 visa program also drew criticism, and the companies later dropped their request for a 30-year tax abatement they were seeking from the city.
The project was scaled back and approved again following the issues, this time featuring two 56-story towers totaling 1,512 units of housing between them. A Kushner Cos. spokeswoman stated that they planned to be “shovel ready” for One Journal Square sometime in 2018, but the company has only secured $57 million in financing for the project as of January.
One Journal Square now apparently does not meet the requirements of a redevelopment agreement they entered with the city. The Jersey City Redevelopment Authority (JCRA) sent a letter to KABR Group attorney Laurence J. Rappaport last week informing them of several issues that could leave the project ineligible for a tax abatement and redevelopment area bonds the developers were originally seeking.
The JCRA cited several violations of the redevelopment agreement in their letter, saying that Kushner Companies and KABR Group have failed to start construction by January 1 of this year, have failed to submit firm financing commitments to them, have failed to obtain or waive redeveloper contingencies before they expired, and have failed to submit an annual administrative fee that was due last April.
In addition, the JCRA voiced concerns about the many changes that have been made to the project such as the termination of the joint venture with WeWork, which was considered a unique aspect of One Journal Square.
After the letter was revealed, Mayor Steven Fulop tweeted that city officials are “tired of delays” on the One Journal Square project and added that “hopefully this will now move to a different partner that can complete the project.” The mayor had previously tweeted last year that “we don’t see support for incentives or abatements from the city for this project” following the initial controversies surrounding the development.
Separately, foundation work is underway on the 72-story second phase of KRE Group’s nearby Journal Squared development. There has been little activity at the One Journal Square property and another bad week of news has cast fresh doubts about a property with a history of bad luck.
