The sky’s the limit for Jersey City’s Journal Square neighborhood. Literally.
Situated in the western half of Jersey City, three PATH train stops from Lower Manhattan, Journal Square was once one of city’s most prosperous quarters. The area, though, has largely missed out on the waves of development that have, over the last few decades, transformed the Jersey City waterfront along with the downtown stretches around the Grove Street PATH stop.
Seeking to remedy this, the city government has, in recent years, passed a number of initiatives to drive development. First came a 2010 rezoning plan eliminating height density restrictions in certain portions of the neighborhood. Then, upon winning office last May, Mayor Steven Fulop changed the city’s tax-abatement program.
The mayor’s new scheme aims to incentivize developers to locate their projects within key inland spots like Journal Square — which sits one PATH stop from downtown Jersey City and two from the waterfront. Under the new rules, downtown and waterfront developments are eligible, at most, for 10-year abatements. A Journal Square project, on the other hand, can snag up to 30 years of tax abatements.
“We wanted to incentivize people to move more into the inner portions of the city, and Journal Square seemed like a natural place to focus on,” Fulop says. “It was the former center of the city, the heart of the city. It has great bones, mass transportation. The PATH system is right there, there’s a major bus terminal right there. So it really has all the components.”
And, of late, there have been signs suggesting that the neighborhood’s real estate potential is finally turning into concrete reality. According to Fulop, there are currently 10 development projects under construction in the area, with another 23 currently in the planning or approval process.
Among the most prominent is Journal Squared, a 2.4-million-square-foot mixed-use residential and retail project under development by the New Jersey-based KRE Group. Adjacent to the Journal Square Transportation Center, the complex — upon completion — will house 1,840 rental apartments spread across three towers of 54, 60 and 74 stories. The first tower is slated to open in late 2016 and will feature 540 rental units ranging from studios to three-bedrooms.
Like much of the rest of Jersey City’s appeal, KRE’s main interest in the site is “based on the incredible transportation,” says Jonathan Kushner, the firm’s president, noting that roughly 30,000 PATH riders and 1,200 buses pass through every day. “From that station, you can go direct to downtown [Manhattan], direct to Midtown,” he says. “You can connect at Newark to Amtrak. You can go right to the Newark Airport.”
Gus Milano, managing director of developer Hartz Mountain, which has a 13-story, 240-unit rental planned for 3 Journal Square, likewise notes the neighborhood’s centrality. And its affordability — rents at 3 Journal Square should be 20 to 25 percent lower than in comparable waterfront buildings.
KRE, Kushner says, plans to price its Journal Squared rentals at around $300 less per unit than its downtown Jersey City project, and at around $500 to $600 less per unit than its waterfront rentals. He expects rents will begin at roughly $1,500 a month for studios and go up to $3,500 for three-bedrooms.
And this discount extends to the Journal Square sales market, as well. Weichert broker Achim Borkeloh cites a four-bedroom Victorian home he sold in the neighborhood last year for $565,000. A similar property downtown “would cost over a million dollars,” he says.
While new development has lagged in Journal Square, Borkeloh says the area still benefits from its affluent past. Indeed, the area’s stock of Victorians and townhomes draws steady interest from buyers.
Urban planner Ya-Ting Liu and her husband, Wayne Titus, are one such buyer pair. Last October, the couple purchased a four-bedroom Victorian in the neighborhood in the $500,000 range. Before that, they spent a year renting in downtown Jersey City, having moved there in 2012 from Crown Heights.
“We were renting on Grove Street [in downtown Jersey City], and we wanted more space for our baby who was becoming a toddler and becoming more active,” Liu says.
What they found in Journal Square reminded them of Crown Heights, Lui says — only with a better commute. On a good day, she can make it from home to the WTC PATH station in 15 minutes.
Still, Liu says, amenities remain a drawback.
“It’s definitely not there yet,” she says of the area’s businesses and services. “There isn’t a sort of large grocery store in the neighborhood. It’s mostly bodegas, takeout, pizza joints. There’s still not a lot of retail and the mix of business you would like to see.”
But that’s changing, too. In May 2011, for instance, the art space Mana Contemporary opened in a 500,000-square-foot former industrial space on Newark Avenue (with plans to ultimately expand to 1.8 million square feet).
And Kristen Scalia, owner of downtown Jersey City lifestyle store Kanibal Home, is betting that Journal Square will one day have additional amenities like Mana that were once missing in other parts of the city. She purchased a three-story rowhouse in Journal Square with her boyfriend last month for far less than a downtown Jersey City rowhouse — which can easily run $1 million.
Having lived off the Grove Street PATH for the previous 10 years, Scalia says her new neighborhood feels much like downtown did when she first moved there. “There are a couple of boutiques here and there, a couple of restaurants here and there, and then you have a lot of closed storefronts as you did in downtown,” Scalia says. “But now you have a lot of people coming in and really revitalizing the area.”
Projects like KRE’s Journal Squared are clearly helping lure potential buyers, suggests Coldwell Banker broker Bridget Cleary.
“In the past six months to a year, you’ve been seeing people who never knew what Journal Square was — now they know,” she says. “People say, ‘I can’t afford downtown, but I can afford Journal Square. And I can get a cute little house for a decent price.’ ”
A lack of available units, however, is beginning to drive prices higher, Borkeloh says. “There are a lot of qualified buyers, and interest rates are good right now, so there are a lot of people looking and not a lot of inventory and prices are starting to go up.”
Indeed, according to numbers from Cleary, the average sales price of single-family homes in Journal Square was up 7 percent, rising to $253,583 from $238,100 in January 2013. Multi-families were up 16 percent, from $269,208 to $313,265. Condo and co-op prices were up 3 percent, from $209,586 to $215,477.
On the other hand, Borkeloh notes, these rising prices could bring more sellers to market. “We’re hoping that inventory will pick up in the coming spring market.”