LINDEN, NJ - Economic and employment growth in New Jersey is currently in a peak phase and will continue to be driven the next few years by public transit-oriented housing and retail redevelopment.
That’s an overall assessment by panelists at the Redevelopment Opportunities for Investors seminar hosted April 6 byCPC/Meridia at Upper Montclair Country Club in Clifton.
Founded by George M. Capodagli in 1970, CPC/Meridia is a leading New Jersey redeveloper with over half a billion dollars worth of development, construction and management projects completed throughout the state, including the Meridia apartments adjacent to the NJ Transit Raritan Valley line in Bound Brook.
“Public transit is becoming more valuable in this area than any other amenity we have,” said keynote speaker, Dr. Joseph Nicholson, chair of the Real Estate Department at Montclair State University’s Feliciano School of Business.
“Public transit provides stability to a redevelopment project and the community it anchors. In 2000, there were twenty U.S. metro areas that had 20% of their population who went to work on public transit. In 2017, the New York City/Northern New Jersey area is the only one with that rate.”
Nicholson presented a range of household, employment, population and mobility data for Bergen, Hudson, Somerset and Union counties. While general economic growth rates for each county were projected to keep on rising, he singled out Hudson County as enjoying potentially the highest growth trajectory in the state.
CPC/Meridia’s vice-president of development Sean R. McGowan chaired a panel looking at trends affecting redevelopment opportunities in New Jersey.
“Urban and older suburban centers with transit hubs are where development will focus,” said attorney Robert S. Goldsmith of Greenbaum, Rowe, Smith & Davis LLP. “At 50%, New Jersey is the most developed state in the U.S., and it’s the third-smallest state. Policies have limited or proscribed development in the highlands, Pinelands, wetlands, farmlands and coastal wetlands, so investment will migrate to the urban and suburban centers.”
Access to quality public transit will play a key role, he added. “Miles driven by U.S. drivers over the last 10 years have decreased, and the number of driver licenses issued have decreased. With Uber and self-driving cars changing the dynamics of daily automobile use, redevelopment should focus on locating in transit hubs, because that’s where their renters will be attracted.”
Architect Christiano Pereira of CPA Architecture foresaw the need for projects offering more 2-bedroom apartments in urban areas, as many new families are staying longer in a city apartment. “People are fine with smaller apartments, as long as they feel their location offers certain amenities.”
The mixed-use retail component that is a staple of downtown redevelopment will be strongly impacted by ongoing changes in the overall retail industry, Pereira said. “Retail of the 1990s is gone. We have to educate municipal planners, engineers and elected officials that retail is evolving and 60-foot deep retail space doesn’t work anymore. It has to be shallow. You want the apearance of a vibrant streetscape, but you don’t want empty stores.”
Commercial real estate appraiser Gary Wade, MAI of Wade Appraisal LLC affirmed transportation as a key driver in upcoming redevelopment and in forecasting its success. He said more landlords are seeing the positive ripple effect on local stores and neighborhoods from new projects.
Wade also believed towns may start awarding PILOT (Payments in Lieu of Taxes) tax abatements to redevelopers for shorter lengths of time, some as limited as five years.
“There are various measures circulating in the state legislature that seek to amend current PILOT regulations,” Goldsmith said. “If implemented, the new formulas would take away any incentive for a municipality to promote a PILOT that might be critical to whether a redevelopment project can be done.”
Pereira cited pending legislation aiming to limit building height and square feet-per-floor in wood-framed multifamily projects that make up most redevelopment construction. “If the standard ‘stick-over-podium’ design model undergoes major changes that affects building cost, it will have a major effect on what redevelopment will be economically feasible for builder and renter.”