Hoboken City Council to Vote on New Yard Redevelopment Plan at Next Meeting

Hoboken City Council will vote on the new Yard Redevelopment Plan on Nov. 5. The redevelopment area will feature about 2.3 million square feet of new office space, residential housing, and retail space.

The new plan is drastically different from the originial plan proposed by NJ Transit in 2008; a 9 million square foot project featuring a 70-story tower. In light of the damage caused by Hurricane Sandy, the new plan also includes flood mitigation details.

“This plan represents the results of an extensive City Council and community process to find consensus,” Mayor Dawn Zimmer said. “It is my hope that all of the parties will objectively evaluate this project and move forward in the best interests of our State and our City.”

City officials added that the revised plan would diversify the local economy, support local businesses, and revitalize the Hoboken Terminal area and Observer Highway area - an essential gateway to Hoboken.

The proposed project would also create thousands of construction and permanent jobs, bring new companies to New Jersey, and add millions of dollars of revenue for the State of New Jersey, Hoboken officials added.

“Hoboken is the 4th most densely populated City in the country, so we are quite sensitive to the burden that excessive new residential density would place on our City’s infrastructure.”

The Planning Board will review the redevelopment plan, should the City Council choose to approve the measure on Nov. 5. The Council would review the board’s recommendation before a final vote to approve the mixed-use project.

Two-thirds of the overall plan is for office space and one-quarter for residential space, with the remainder for retail space.

The City’s revised Plan calls for a baseline 2.176 million square foot, mixed-use project. An additional 125,000 square feet of commercial space will be permitted if the commercial space is architecturally creative and designed to LEED Gold standard.

Zimmer also expressed that NJ Transit will receive a fair return on it’s original interest in the project.

“While NJ Transit will not receive the enormous revenue that it hoped to receive when it originally proposed its 9 million square foot plan back in 2008, it will receive a fair return on its real estate asset enabling it to make overdue and vitally necessary improvements to its Hoboken facilities,” Mayor Zimmer added.

Economic Viability

The City’s Economic Analysis conducted by Freeman/Frazier & Associates, Inc., New York City-based firm, states that the implementation of the plan is economically viable.

The economic experts considered, among other factors, the value of the land, soft costs, construction costs, flood resiliency costs, relocation costs, infrastructure costs, and the fair market value of the residential, retail, and office space improvements.

“The cash flow model indicates that the Internal Rate of Return of the project will be 12.9 percent, which is at the high end of the minimum range of pro forma rates of return in the New York-New Jersey Market as reported by the ‘Realty Rates’ survey in the 3rd Quarter of 2014,” representatives from the Firm stated.

This is a conservative estimate that does not include the additional 125,000 square feet of potential commercial use.

The public is invited to view the plan, plan presentation, economic analysis, and overview of changes compared to the 2012 draft plan at the following links:

• Redevelopment Plan: www.hobokennj.org/docs/communitydev/Hoboken-Yard-Redevelopment-Plan-October-2014.pdf

• Redevelopment Plan Presentation: www.hobokennj.org/docs/communitydev/Hoboken-Yard-Redevelopment-Plan-Presentation.pdf

• Economic Analysis: www.hobokennj.org/docs/communitydev/Hoboken-Yard-Redevelopment-Plan-Economic-Analysis.pdf

• Plan Changes Since 2012: www.hobokennj.org/docs/communitydev/Hoboken-Yard-Redevelopment-Plan-Changes.pdf

Photo courtesy of the City of Hoboken