N.J. Bell Building in Newark to Be Redeveloped for Housing
18 October 2017 - 9:48AM
Dow Jones News
By Keiko Morris
Investors who redeveloped and leased a historic Newark, N.J.,
department store site have secured more than $100 million in
financing to revive another city landmark.
L+M Development Partners and Prudential Financial Inc. last week
closed on the funding that will allow the venture to convert the
old New Jersey Bell headquarters building at 540 Broad St. into a
mixed-use tower with a mix of 263 market-rate and affordable
apartments and office and retail space.
The partners are hoping to continue the city's development
momentum, which has brought residents to its downtown, revitalized
parks and spurred plans for more office space and retail space.
State and city leaders are pitching the city, along with up to
$7 billion in tax incentives, to Amazon.com Inc. as the tech giant
conducts a countrywide search for a second headquarters location.
Part of the venture's mission is to reknit and revitalize Newark's
downtown as a round-the-clock neighborhood, injecting a residential
element, said Ommeed Sathe, vice president and head of impact
investments at Prudential.
"We wanted to be fuel for that momentum," said Jonathan Cortell,
vice president of development at L+M Development Partners. "This is
a great city that has long been overlooked and has such great
infrastructure."
Citi Community Capital is providing a $71 million construction
loan and will provide $14 million in equity through historic tax
credits. Goldman Sachs Urban Investment Group is providing $13.5
million in equity through various tax-credit programs.
"People are starting to see real growth and it's [Newark] losing
those misperceptions about crime," said Margaret Anadu, managing
director of Goldman Sachs Urban Investment Group. "People are just
stopping and taking notice."
The venture and its financing partners are no strangers to
complex historic redevelopment projects. L+M, Prudential and
Goldman Sachs Urban Investment Group teamed up to redevelop the
Hahne & Co. building, where Rutgers University, Whole Foods
Market, and Barnes & Noble Education Inc. are tenants. The
project included 160 apartments, 40% of which are designated
affordable.Marketing began last winter, and those apartments were
quickly leased, Mr. Cortell said
"There is strong continued demand on the residential side," Mr.
Sathe said. "And you are starting to see projects in surrounding
municipalities start to advertise the proximity to Newark. It's a
great sign of where we think the city is heading."
The 1929 art deco Bell building, purchased last year from
Verizon Communications Inc., was designed by architect Ralph Walker
of Voorhees, Gmelin and Walker, a firm known for designing building
for the Bell companies, according to federal documents. Rising 20
stories, the building's facade features massive sandstone figure
reliefs representing telephone company workers, such as a lineman,
operator and a repairman.
When the building is converted, 20% of the apartments will be
affordable at levels up to 50% of the area's median income. The
building will feature apartments ranging from studios to
three-bedroom units, a fitness center, ground-floor retail and
about 80,000 square feet of office space. The venture will replace
the windows and remove a stairwell from the east side of the
building, which has views of the New York skyline, and is
reimagining a corporate auditorium space for such options as a
community theater, Mr. Cortell said.
The project "represents a commitment to jobs, development, and
to bring quality housing and economic growth to our downtown,"
Newark Mayor Ras Baraka said.
Write to Keiko Morris at Keiko.Morris@wsj.com
(END) Dow Jones Newswires
October 17, 2017 18:33 ET (22:33 GMT)
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