Newark luxury apartment construction begins
For the first time in more than half a century, luxury apartments are being built in Newark,another sign of revitalization in the state’s largest city.
The builder, Dranoff Properties Inc. of Philadelphia, is betting that the demand for luxury rentals that has fueled a building boom in Jersey City will spill west and help revitalize Newark’s downtown. The company held a ceremonial groundbreaking Monday for the building, One Theater Square, a 245-unit, 22-story apartment tower to be built across Center Street from the New Jersey Performing Arts Center.
The $116-million project is a public-private partnership financed in part by $33 million in tax credits from the New Jersey Economic Development Authority, as well as tax breaks and bond financing from the City of Newark.The project also is supported by NJPAC as part of the arts center’s mission to revive downtown.
The tower is one of a number of recent developments pointing to a revival in the state’s largest city, including the construction of buildings for corporate stalwarts Prudential Financial Inc. and Panasonic Corp., plans to expand the campuses of the New Jersey Institute of Technology and Rutgers Newark and a proposal to redevelop the long-shuttered Hahne’s department store, according to Rutgers University economist James W. Hughes. “There are a lot of good things going on,” he said.
“If [One Theater Square] rents up quickly, you may see more action,” Hughes said. But, he said, it may take a while for downtown Newark to create enough restaurants and other amenities to make it a “cool place for millennials and empty-nesters.”
One of the speakers at Monday’s event was former Gov. Thomas Kean, who supported the creation of NJPAC. “Very few people live to see their dreams come true,” Kean said of NJPAC and the apartment construction.
Lt. Gov. Kim Guadagno called the apartment building “a major piece of Newark’s renaissance, Newark’s recovery, Newark’s next life.”
One Theater Square was first proposed about a decade ago, but was delayed by the housing crash and recession. By the time the economy began improving, construction costs had risen and financing agreements had expired and had to be reassembled, according to Carl Dranoff, president and founder of Dranoff. The company has done most of its luxury apartment building in Philadelphia.
The tower is expected to open in summer 2018, with rents starting at $1,250 for a studio and $2,000 for a one-bedroom unit. Dranoff estimated that those rents are one-third less than similar apartments along the Hudson River waterfront.The building will also include 24 affordable units.
Dranoff said that the building will appeal to people who now commute to jobs in Newark, as well as young households who like city living but want an affordable alternative to New York, Jersey City or Hoboken. He said that Newark’s transit connections make it “the next renaissance city.” The project is within walking distance of the city’s light rail as well as NJ Transit, Amtrak and PATH rail lines.
One Theater Square, he added, is a “walk-to-everything location.”
Asked whether potential tenants would hesitate because of concerns over Newark’s schools or crime, Dranoff said he expects many tenants will not have school-age children. And, he said, there will be a police substation in the building.
Patrick O’Keefe, an economist with CohnReznick in Roseland, said the apartment building is an example of how the “Hudson County renaissance has spillover benefits to other places in the northeastern part of the state.”