INCENTIVES OFFER GATEWAY TO DEVELOPMENT
Devco chief says Urban Transit Hub tax credits powered by New Brunswick project
By Andrew Kitchenman
NJBIZ
August 1, 2011
While Christopher J. Paladino has led New Brunswick Development Corp. through a series of major projects, none of them were planned and constructed in as difficult an economic landscape as the current one.
That may explain why he is brimming with excitement over the Gateway project, a mixed-use development under construction at Easton Avenue and Somerset Street, next to New Brunswick’s train station.
Devco is drawing on a variety of financing sources to build it and a nearby wellness center project for a total of $250 million. One of the key components is up to $55 million in tax credits through the state’s Urban Transit Hub program.
“In the middle of the most difficult economic times in recent history, we’ve invested a quarter of a billion dollars,” said Paladino, Devco president.
Gateway will include 150 apartments, 42 condominium units, 50,000 square feet of office space, 65,000 square feet of retail space – including a Barnes & Noble bookstore – and a 685-space parking garage. The Wellness Plaza will include a Fresh Grocer supermarket, a fitness and aquatic center operated by Robert Wood Johnson University Hospital, and a 1,200-space garage.
In addition to the Urban Transit Hub credits, financing came from Build America Bonds provided through the federal stimulus, federal New Markets tax credits, and participation from conventional lenders like Bank of America and a consortium of smaller New Jersey banks.
The development “would not have been able to be built in the current environment but for the benefits of the Urban Transit Hub tax credit program,” Paladino said. “It has allowed us to bridge a variety of financial challenges.”
The Gateway garage is scheduled to open in November, with the residential units opening in January and the office space to be occupied in the spring. The Barnes & Noble is due to open in time for Rutgers University’s fall 2012 semester – the store also will serve as the campus bookstore.
The projects will total 1.2 million square feet and add pedestrian links on both sides of the station, with Gateway providing a direct pedestrian connection to the Rutgers campus.
Paladino said Gateway will provide secondary benefits to the city’s economy by making visits to the Easton Avenue commercial corridor more attractive through the additional parking, and by easing the strain on commuter parking.
“You’re going to be able to wait in the Starbucks and have a cup of coffee, and watch on a television monitor when your train will be arriving,” Paladino said, referring to a plan to provide real-time NJ Transit information throughout the transit village. The Starbucks will be in the Barnes & Noble, but with a separate entrance, allowing longer hours.
Paladino said he’s seen early interest from commuters who like the idea of being able to shop for groceries, work out and go to work within steps of their homes. This is a strong selling point for the work force market between the affordable and luxury housing markets, he said. The condos are expected to be priced at $250,000 to $420,000.
Rutgers spokesman E.J. Miranda said the university is looking forward to the project’s completion, including the addition of the Barnes & Noble.
“The Gateway will create a dynamic and unique destination that will welcome visitors” to both the city and university, Miranda said.
New Brunswick spokesman Bill Bray said Gateway residents will provide a new year-round customer base for Easton Avenue businesses that face slow summer months.
“The hope there is that more people will choose New Brunswick (train station) and also encourage our own residents, instead of driving, to also tap into our mass transit,” he said. For Paladino, Gateway is just the latest in a string of projects, including Rockoff Hall University Apartments, the Heldrich and New Brunswick High School.
“It shows this is a city on the move – it shows there’s an energy” in New Brunswick, Paladino said.
