Joseph A. Panepinto Sr., CEO and president of Panepinto Properties – Photo by LDO Photo/Courtesy: Panepinto Properties
By Joshua Burd
It was 1971 when Joe Panepinto, an aspiring criminal lawyer, took a job representing patients at a newly established methadone clinic in Jersey City.
In less than a year, he found himself with an offer for a much different type of legal work. Dr. Paul Jordan, the 30-year-old co-founder of the clinic, had won the city’s mayoral election against the infamous Hudson County Democratic machine and asked Panepinto to become the planning board attorney.
Admittedly, Panepinto knew nothing about real estate, but Jordan insisted on having someone he trusted in a position that had been especially prone to corruption.
“I was a young lawyer,” Panepinto recalled. “I said, ‘Sure, I’ll take it.’ ”
As it turns out, his first exposure to real estate came as Jersey City began to devise plans to redevelop its tired industrial waterfront with Mel Simon, Herb Glimcher, the LeFrak family and other titans of the industry. And it quickly became a passion for Panepinto, a native of the city, who would eventually transition to private practice and his own development firm.
“I just liked the positive approach,” Panepinto said. “You’re building something, you’re creating, actually benefiting the whole community and you’re employing a lot of people. So I started representing different developers and started developing myself.”
More than 40 years later, Panepinto Properties remains an anchor in Jersey City and a central player in the city’s emergence as a hotbed for real estate investment. The firm has ties to virtually every major project in the city since the late 1970s, whether as the lead developer, a joint venture partner or through Panepinto’s law practice early in his career.
That involvement is poised to continue through new development downtown and in the resurgent Journal Square neighborhood. What’s more, the firm is moving ahead with a high-profile plan well beyond the borders of Jersey City — namely, in South Korea — where it is serving as the lead developer in a 2,200-acre redevelopment project.
It’s an exciting endeavor for Panepinto, whose firms have completed more than 4.2 million square feet of development, with another 5.5 million in its pipeline. But he seems equally excited about everything else going on in his native city, including projects by other developers along the Hudson waterfront, Journal Square and other neighborhoods.
“My business barometer has always been: If it is good for Jersey City, it’s good for us,” said Panepinto, CEO and president of Panepinto Properties. “I keep this in mind for development to this day.”
Panepinto recalls the long, slow decline that was underway in Jersey City during his youth in the 1940s and 1950s before coming to a head in the early 1970s, as he was starting his law career. That perception continued in the late 1970s as he was raising money for his first buildings, which included a Burger King on Central Avenue and a renovated office building for his practice.
“Everybody said, ‘You’re crazy. Why are you putting all this money into Jersey City?’ ” Panepinto recalled. But the answer was rather simple: “Well, this is where I live … We live down the street and this is where I work. I don’t want to commute.”
But along the way, he also witnessed firsthand the burgeoning interest from the developers that would become synonymous with the city’s rebirth. Panepinto spent six years in key positions in the municipal government, first as the attorney for the planning board and later for the redevelopment agency. During that time, he was part of the team that drafted plans for redevelopment and saw the potential for transforming the city’s abandoned railyards and factories along the waterfront, along with sites near public transportation such as Journal Square.
He would also develop a client list for his law firm that included the likes of Cali Associates, the LeFrak Organization, Hartz Mountain Industries and Applied Development Co. While representing those firms in their plans on the waterfront, Panepinto turned to Journal Square for his own projects, starting with the former site of a railway car repair station on Summit Avenue, which he bought at an auction in 1977 in order to build his new law office.
In 1984, he completed a 50,000-square-foot office building at 1 Journal Square Plaza that served as Maher Terminals’ corporate headquarters and as the new home of his practice. Four years later, he joined Hartz Mountain in building 2 Journal Square Plaza, a 270,000-square-foot office building that housed the payroll giant ADP.
Panepinto continued to grow his portfolio through acquisitions and new construction as he became a full-time developer in 1997. The firm also expanded to the waterfront with projects such as The Gotham, a 220-unit luxury rental property built in partnership with Ironstate Development, and the 600,000-square-foot office tower known as Harborside Financial Center Plaza 10, which it built with Mack-Cali Realty Corp. and is home to Panepinto’s headquarters.
As those projects show, choosing like-minded partners has been an important part of Panepinto’s success. He also pointed to the importance of having a local government that has “good politics” and is willing to offer incentives or other assistance, as the city has for decades.
“Jersey City is an example of how we all can work together for a greater good,” said Panepinto, who has long been active with St. Peter’s University, Christ Hospital and other city institutions. “It’s an example of how commerce and business combined with an enlightened government can bring people together and raise the economic wellbeing of all our citizens.”
Most recently, the firm is celebrating the success of 50-90 Columbus, a massive multiuse project with Ironstate that includes nearly 1,500 apartments in three towers, a 152-key hotel, street-level retail space and a luxury health club. Last June, Panepinto and Hartz opened 3 Journal Square, a now fully leased, 240-unit apartment building alongside the former ADP building.
Panepinto has amassed millions of square feet of residential, commercial, hospitality and retail space. He has rarely sold his properties over four decades, but the exceptions have been rather notable. For instance, the firm partnered with a local construction company in 1980 to acquire 27 waterfront acres near the Pavonia PATH station, where it would operate a lucrative parking lot. But it sold the property to LeFrak through condemnation proceedings five years later.
The site ultimately became the centerpiece of LeFrak’s landmark Newport development.
Otherwise, Panepinto has always viewed long-term ownership as being “the most efficient way to build up a portfolio of wealth” and the best way to lay the groundwork for a multigenerational business. The company’s leaders include his daughter Stefania Panepinto and son Joseph Panepinto Jr. — who oversee the affiliates Panepinto Fine Art and Panepinto Global Partners, respectively — along with sons-in-law Gerald Taufield, Daniel Reiser and Joe Rodrigues.
“It’s a family business,” Panepinto said. “When we have meetings here, people say it’s like coming to my house for a Thanksgiving meal.”
He has been waiting for Jersey City to achieve a critical mass as he has watched the skyline change over the past three decades. He believes that is now happening along the waterfront, which is now established and will benefit from additional investments from major landlords like Mack-Cali Realty Corp.
“We’ve reached critical mass,” he said during a recent interview in the firm’s 12th-floor conference room. “Now you can come down here. We’re becoming a 24/7 area.”
Journal Square is also “just coming off the ground” and poised for growth on the heels of successful developments like the 538-unit first phase of Journal Squared, a major apartment project by Kushner Real Estate Group, along with Panepinto’s own recent project with Hartz.
“These are social programs as well as business ventures, and they’re all good for the city,” Panepinto said, pointing to job creation and tax revenue for the city.
He now sees “explosive development” in Jersey City’s future over the next two decades and has major plans to be a part of it. Those plans include two sites in Journal Square that could house an additional 800 to 1,000 units. Panepinto also hopes to build a 1.2 million-square-foot office tower on a separate parcel, which he concedes will not be easy, but he believes it’s an important complement to the neighborhood’s growing residential pipeline.
“The office building is going to take a little longer, because the problem is that the office market is shrinking,” he said. “So in order to induce a developer to take the risk and spend the money, we’re going to need a lot of government help and we’re going to need a socially conscious company that would want to relocate in the inner city. And I think we can get that.”
Meantime, the firm’s decades of experience have translated into a major opportunity in another coastal city. Through its affiliate, Panepinto Global Partners, the developer has been tapped to help oversee a $2.1 billion project in Incheon City, South Korea, where plans call for creating a mixed-use medical tourism hub with residential, commercial, hospitality and health care space, among other uses, capitalizing on a metropolitan area with 23 million people.
Panepinto said the relationship is more than a decade in the making, stemming from when he was introduced to a group of Korean-American businesspeople who sought to invest in the U.S. When those plans were derailed by the Great Recession, the group instead sought Panepinto’s help in reviving one of their own aging waterfront areas.
Led by Joe Panepinto Jr., the firm joined Daewoo Engineering & Construction Co. in a project outside Seoul known as the Songdo Global Campus, which consisted of a high-rise complex of more than 1,700 residential condominiums and 600 commercial condominium units, with 250,000 square feet of retail space. In the newest project in Incheon, Panepinto Global Partners is overseeing the acquisition, master planning, land sale and development of what will be known as the GangHwa Medi-City.
Panepinto sees many parallels with Jersey City, including the fact that the government is using incentives to support the waterfront rebirth. The GangHwa Medi-City is a 10-year project, but if it comes to fruition, he believes “it will become internationally recognized.”
“Real estate development is like a roller coaster ride and you must have a long-term vision,” Panepinto said. “Our relationship with South Korea and our development projects there are a perfect example of this reality.”