Garage may be replaced by 12-story building
City moves to be able to sell Observer Highway facility to developer

03/27/2006 Hoboken Reporter

The Hoboken Planning Board voted Monday to label the city's Municipal Garage on Observer Highway an "area in need of redevelopment." If the City Council accepts this recommendation at a special meeting Monday at 6 p.m., the council can choose a developer to build on the site and then sell the property to that developer for a needed cash infusion.

The city is already anticipating $5 million in this year's proposed $72 million municipal budget from the sale. A similar situation occurred last year, but a council minority balked at the deal, forcing the budget to be held up longer and city government to temporarily shut down. The minority did not want to be rushed into the deal. For the current fiscal year, a proposed city budget was introduced in December but has still not been finalized, even though the year began last July 1 and ends in three months.

Many people agree that the current garage, which is used to store and repair the city's fleet of cars, is an archaic use for a piece of prime real estate near the train station.

But they are debating how big and dense to let a developer build, should the property be rezoned.

Fred Bado, the city's director of community development, said they are hoping for 250 residences there, possibly in a 12-story tower with smaller buildings around it.

Last April, the City Council created the Observer Highway Advisory Committee, made up of city residents, tenants of the Neumann Leather building nearby, and several members of the City Council. They have been talking about what they would like to see built in that area.

A balancing act

For 15 years, the municipal government has struggled each year to close budget deficits. To fill these budget gaps, the government had to come up with creative one-time deals.

However, such deals are controversial because they are short-term fixes that sometimes result in the loss of public land.

Last year, the city reaped $7.9 million from selling the municipal garage to the Hudson County Improvement Authority, a quasi-governmental agency, and then leasing the garage back from the HCIA. Now the plan is to place the garage property into a redevelopment area, where in the HCIA could then sell the property to a redeveloper.

The city would then receive any money above the $7.9 million that it has already collected from the original sale. But according to redevelopment law, the City Council, as the redevelopment authority, can zone the garage property however it wishes. How the council zones the land will impact how much it can sell the property to a redeveloper for. The denser and higher the zoning, the more the property will be worth.

What might happen?

Fred Bado, the city's director of Community Development, said Wednesday afternoon that the City Council will likely hire the firm Phillips, Preiss, Shapiro Associates, Inc. on Monday to help the city craft the redevelopment plan. That is the same firm that drafted the city's master plan for future zoning, with suggestions from local residents.

Bado added that the planner and City Council will consider the need to generate a "certain amount of money" from selling the property to a developer.

To prevent future negotiations with prospective redevelopers from being compromised, Bado did not disclose the amount they are hoping for.

But he did talk about the possible size of the project.

"What has been talked about are 250 units on the site," Bado said. He added that it might be a single building with a number of residential towers rising from the base. He said that they want the tallest tower, which could be around 12 stories in height, to be on the Observer Highway side of the property. He added that the other towers' height would decrease as they move toward Newark Street and away from Observer Highway.

Already banking on $5M

The city is already anticipating $5 million in revenue from the sale of the property. To realize that money the city must write a redevelopment plan, hold public hearings before the Planning Board and City Council, designate a developer, and then sell and close on the property, all before June 30, which is the end of the 2005-2006 fiscal year.

With such a tight deadline, there are those concerned that the City Council could be presented with a developer-led ultimatum for high-rise zoning.

But if the city isn't able to finish the redevelopment plan by June 30, it is working on a contingency plan. At the last City Council meeting, a resolution was introduced to refinance the deal with the HCIA, in which the HCIA could give the city an additional $5 million without selling to a developer.

Bado said he consulted with attorney Gordon Litman, who specializes in redevelopment law, and the planners at Phillips, Preiss, Shapiro Associates and they said that, despite the number of steps needed, "it is doable if we stick to the timetable."

"We are working under the reasonable assumption that it will be done by June 30," Bado said.

Observer Highway residents involved

The biggest concern from area residents is that the garage property, without careful planning, could turn into another 77 Park Ave., a massive 15-story, 300-unit building.

In the late 1990s, 77 Park Ave. was part of a redevelopment area, and many believe now that the city failed the community by allowing a project to grow that was well out of scale with the surrounding neighborhood.

Now that the city is creating a redevelopment zone at the garage property, neighbors do not want to see the situation repeated.

Lane Bajardi, the chairman of the Observer Highway Advisory Committee and the condo association president of 70 Park Ave., said Monday night that the Municipal Garage property certainly needs redevelopment, but the city can't allow its fiscal problems to be the only consideration.

"We need sound planning of this redevelopment," Bajardi said before the Planning Board Monday. "Though the city's financial considerations are very important in this process, they are not the only goal to reach. We also need to approve a plan that we can all look back on and say was a good compromise that did not destroy the character of the neighborhood."

He added the Observer Highway Advisory Committee has been working with planners and architects for months to bring a development proposal to the Planning Board and City Council that "will meet the city's needs, but not destroy the neighborhood like another high-rise would."

Bajardi did not like Bado's comments that the city is looking to build around 250 units of housing.

"Mr. Bado's comments are very surprising, as they ignore the work the committee has been doing for several months," Bajardi said. "The City Council said no to high-rise towers on the [municipal] garage and Neumann Leather a year ago, and asked the community to come together for a better plan."

Neumann across the street

How the City Council zones the Municipal Garage property will have a ripple effect on the Neumann Leather building across the street.

The Neumann property is over 95 percent occupied and houses over 100 artists and small businesses. The City Council has already begun the redevelopment process for Neumann.

If the city can reach a compromise plan for the Municipal Garage site, the tenants of the Neumann Leather Building might not have to leave. But if the city goes for a cash grab and zones the site for a dense high-rise development, the Neumann businesses could have reasons for concern.

"The committee would like to work closely with the Planning Board to ensure this municipal garage planning comes to a happy end, so we can move on to a much more complicated situation at Neumann Leather," Bahardi said.