Development Remains Stalled at Peter Mocco’s Liberty Harbor North
When a developer working on a decades-long, billion-dollar project says that “recession, war and famine” may well come between the development’s start and completion – as Jeff Zak, working on Peter Mocco’s Liberty Harbor North development plan, reportedly said back in 2000 – it will no doubt sound like the hyperbole that it is. Yet we’ve seen two out of three of those things in the 12 years since Zak made that off-the-cuff comment, which goes a long way to explaining why progress has lagged in a development that promised to be a huge boost to the city’s Downtown neighborhood.
What the city hasn’t seen, according to Jersey City Redevelopment Agency head Bob Antonicello, is what “the taxpayers, the residents deserve.” That, he says, is realistic progress comparable to that by other developers in the city.
“Nobody has been given so much and done so little,” Antonicello says.
Zak’s prescience can, of course, be taken as a way of putting the “20- to 40-year” timeline, as he estimated at the time, into perspective – a lot will change, there are global factors that are out of his hands, the world doesn’t sit still while a construction crew puts down concrete foundations, etc. In other words, if the city wants a potentially transformative development project for a neighborhood ripe for it, there has to be some flexibility. As the saying goes, a certain ancient city wasn’t built in a day.
But Mocco has sat on the 80-acre project since 1985, when he bought the property from the Jersey City Employees’ Retirement Fund for a pittance (as far as land deals in prime real estate go) at $880,000. In the time since, he’s filed for bankruptcy (in 1995), and filed suit against the city, saying their incompetence in handling a blighted piece of land within the 80-acre property prevented development back in the 80’s. The courts, however, sided with Jersey City.
But that doesn’t mean his project wasn’t, in fact, potentially transformative.
“This was a period of time when we were coming into the boom of the real estate market, when New Urbanism started to come into fashion,” says Jeffrey Kaplowitz, the chair of the city’s planning board from 1994 to 2002. “Newport, for example, was a suburban-style development plopped in the middle of the city, which is why there’s a sterile feeling down there.” New Urbanism would move away from building “for the sake of building,” according to Kaplowitz.
When Mocco, a former mayor of North Bergen, was given the property that has become known as Liberty Harbor North under the McCann administration in what Kaplowitz calls a “sweetheart deal,” the city grew frustrated that no development took place. Jersey City would eventually sue to rescind redevelopment status from Mocco, recalls Kaplowitz, and lose.
Failing in the courts, they insisted he develop a master plan, which is when he hired Andreas Duany – “the father of New Urbanism,” as Kaplowitz puts it.
This revolved around creating an urban center around strong downtown retail stores with mass transit, explains Kaplowitz. Density would be created in this center that would lessen the further it gets away from this center and moves into other neighborhoods. As Kaplowitz recalls, Duany invited public officials and the community to address their concerns, incorporating what he learned at these meetings into the plan.
The problem, says Antinocello, isn’t with the plan. It’s that still so little has been done.
At present, about 30 percent of Liberty Harbor North has been completed since the city signed onto the current plan back in 2000, and yet Mocco says it remains impossible for him to predict when the entire project will be complete. After all, even if you know a recession has to come at some point, “you can’t plan for what happened in 2008,” he says. “So you can’t make a timeline with accuracy.”
It’s a start-and-stop strategy by necessity, he adds.
“What happens is when the economy is good you attempt to grow and develop as aggressively as you can,” Mocco says. “When times are bad and you can’t build and sell luxury units, then you slow down and wait for the market to catch back up. It’s a long project and it’s going to take a long time.”
But these explanations – of market unpredicability, of the wisdom of sitting still until conditions are perfect – have run out of mileage, at least for Antonicello, who has called the pace of construction “ridiculous” based on what Mocco was given.
Consider what the LeFrak Organization has accomplished in the same amount of time, says Antonicello, who points to LeFrak’s 4,700 housing units and more than 4 million square feet in office space as the benchmark for development. He says the “315 units and beer hall” – Zeppelin Hall and Biergarten – constructed by Mocco is troubling by comparison. To his credit, Mocco is also responsible for developing the Hamilton Park Health Care Center in Downtown Jersey City, which is adjoined by the Atrium, an assisted living facility. He also owns new bar Surf City, plus businesses A-1 Self Storage and Liberty National Mortgage, both of which are in the Hamilton Park neighborhood.
“With great entitlement comes great responsibility,” says Antonicello, and because that responsibility has not been met, he says the city plans to take action.
“This redevelopment requires a new, specific time frame,” he says. “We’re going to be having a serious conversation with Mr. Mocco sometime soon about it.”
And it’ll be a time frame “with teeth” – should the requirements not be met, the agency can potentially take back the redevelopment from Mocco, a “draconian action we don’t want to do,” he says, but which remains a possibility.
This new agreement will likely mean no more timeframes ranging in the decades, no more tongue-in-cheek global predictions, no more excuses about what the market wants or doesn’t want. This timeline, says Antonicello, will be based on facts, such as reports from engineers and construction crews explaining the costs and lags of development. He’ll also collect financial documents regarding the hardships Mocco has cited regarding his difficulty finding buyers, all of which was required to be kept since the project’s inception.
It’s a frustration borne, no doubt, out of the latest “progress” for the redevelopment project. This came just last week when an appellate court put to bed an 8-year-old question over the value of a property the JCRA acquired via eminent domain on behalf of Mocco.
The agency had estimated the 3.4 acres at being worth $3.9 million back in 2004, a figure that was seen as far too low by the property owners, whose experts said it was worth more than $25 million.
What was clear to all was the importance of the property to a redevelopment plan that could potentially net the city millions in revenue each year. By comparison, Antonicello says, the redevelopment of Newport brings in about $30 million in revenue while only using $10 million in public services. “There’s no reason Liberty Harbor North can’t do the same thing,” he says.
For that to happen, Kaplowitz says that property had to be acquired one way or another.
“You can’t just build around a single property if you’re looking to transform a neighborhood,” he says. Though he noted eminent domain is not always popular, and it was never the city’s intention when they initially approved the plan, he says it’s sometimes “necessary for the public good.”
Located at Jersey Avenue and Grand Street, it was clear the property – near a light rail stop and a short walk from both Liberty State Park and Jersey City’s own “Wall Street West” – would have a lot of value at some point. It also just so happened that Duany’s plan was at the time on display as a shining example of “New Urbanism” at the National Building Museum in Washington D.C. To say the city was excited by the project would be an understatement – one person in attendance at the planning board meeting when the project was approved said the city’s planners asked Duany for his autograph before he left.
As it turned out, the courts’ assessment of the value was much closer to the estimate given by the professionals hired by Ronald, Kathryn and Lynn Kerrigan, the family that had owned the land before it was condemned. And when a jury said the property was worth $18.6 million, all the JCRA could do was appeal, which itself was expensive – with interest at about $2,000 per day, the total pricetag of the property has since ballooned to more than $21 million. The four-year appeal process was only resolved last month when an appellate judge affirmed the 2008 decision by a court that sided with the Kerrigans’ claim that the land had been taken from them at far less than it was worth.
But before he could pay, Mocco said he had to resolve a “cloud” on the title of one of the properties, and to do so, he made the controversial decision to file for bankruptcy. At the time Antonicello slammed the decision, saying contractors wouldn’t get paid, but ultimately the Essex County bankruptcy court did end up resolving this “cloud,” giving Mocco uncontested ownership of the property.
According to the consent agreement with the appellate court, Mocco has until 2018 to complete payments, but $10 million of that is required by the end of the year.
And yet Mocco himself said it wasn’t the question of the land’s value that held up its development.
“We’re years away from developing that plot,” he says. Instead, the developer has “a number of projects where the iron is in the fire, and we will be moving them forward, we’re just not ready to pull building permits yet.”
But that was as specific as he would get. There are “alternatives that are being evaluated,” but what goes first will depend on “where the market is,” which includes evaluating “what the market is looking for and what it can support financially.”
“All the basic questions of what goes into any decision-making,” he says. “In today’s economy, they become much more critical and sensitive. We don’t want to design or build something the market doesn’t respond to.”
Although Liberty Harbor is far from complete, it would be wrong to say there hasn’t been some significant progress at the site. One of the buildings, 225 Grand Street (pictured at right), began leasing apartments in May of 2010 and is filled up, according to Jeff Persky, the executive vice president of KRE, one of the developers responsible for the building. The 15-story building has amenities like a 24-hour doorman, fitness center and rooftop pool. For that, KRE partnered with Ironstate, a Hoboken-based firm, not Mocco.
A similar success can be found at Gull’s Cove, a 16-story building with more than 300 condos for sale which opened in 2007 and was developed by Metro Homes. According to its website, there are only 10 units still available.
But of these, only Gull’s Cove is condo, while the other developments are rental. “The rental market is much stronger right now,” Persky acknowledges.
Still, KRE and Ironstate broke ground late last month for yet another residential-retail high-rise which will incorporate a new Boys & Girls Club. Though it will not be completed until 2014, the group has not slowed its pace, says Antinocello.
But on the phone Mocco sounds upbeat and said he remains optimistic about Liberty Harbor North.
“We’re looking to create a real, viable community. This is a shining example of real quality urban housing in a dynamic city.”
“But, he says, “it’ll take time.”
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Photos by Jennifer Weiss