A rendering of 540 Broad St. in Newark, following a planned restoration that will create new apartments and commercial space. — Courtesy: Inglese Architecture & Engineering
By Joshua Burd
A joint venture has started construction to restore a historic office tower in downtown Newark, with plans to create 265 apartments and 80,000 square feet of office and retail space.
The development team — whose principal members are L+M Development Partners, Prudential Financial Inc. and Goldman Sachs Urban Investment Group — gathered Monday to mark the ceremonial start of the project at 540 Broad St. They will spend the next several months rehabilitating the landmarked New Jersey Bell building, which was designed by Ralph Thomas Walker and was built in 1929.
Newark Mayor Ras Baraka was among several public officials and dignitaries who joined the developers on Monday at the 21-story Art Deco building.
“The rehabilitation of 540 Broad Street is a milestone in our strategy to reinvent a downtown where nobody once lived as a mixed-use neighborhood incorporating affordable and market-rate housing as well as a thriving office and retail hub,” Newark Mayor Ras Baraka said. “540 Broad is a majestic symbol of Newark’s past and Newark’s present with its magnificent landmarked art deco design, history as the nerve center of New Jersey Bell, and future as a vital mixed-income, mixed-use architectural treasure.”
The residential component calls for 20 percent of the units to be affordable, which will target families earning between 40 and 50 percent of the area median income, according to a news release. The apartments will be located on floors six through 21 — comprising a mix ranging from studios to three-bedroom units — while the lower floors will consist of office, retail and other nonresidential uses.
The New Jersey Bell building has been home to the regional offices of Verizon, which will continue to occupy the fourth floor.
The project follows the high-profile rehabilitation of the former Hahne & Co. department store, another well-known building in the city, by the same team of investors and organizations. As a result, the Hahne’s building at 609 Broad St. is now a mixed-use complex with 160 apartments, along with the city’s first Whole Foods, Express Newark, a Rutgers University-Newark arts incubator and other tenants.
“L+M is proud to once again invest in downtown Newark’s long-term future and its existing assets and we couldn’t be prouder than to break ground alongside Mayor Baraka,” said Ron Moelis, CEO of L+M Development Partners. “As with Hahne’s before it, we celebrate this formidable city by restoring one of its great buildings.”
The developers are again working with Rutherford-based Inglese Architecture & Engineering for the new design and repositioning of the 436,000-square-foot tower. The design team also includes CetraRuddy, a Manhattan-based firm that has converted other Ralph Walker buildings.
The developers, which make up an entity known as 540 Broad Street Owners LLC, have received a tax abatement from the city of Newark in conjunction with pledges to hire local and create affordable housing. The funding structure also includes a mix of public, private and nonprofit sources, including $15 million in tax exempt bonds provided by the New Jersey Housing and Mortgage Finance Agency.
Meantime, Citi Community Capital provided some $70 million in debt construction financing and $14 million in equity from the sale of Historic Tax Credits through the National Trust Community Investment Corp., the news release said. Additional financing was sourced through proceeds from the sale of Low-Income Housing Tax Credits from Goldman Sachs UIG, as well as financing from Prudential Financial and sponsor equity.
“Prudential has been a part of Newark’s civic fabric since our founding, and we are deeply committed to helping revitalize the city and spread economic and social opportunity,” said Ommeed Sathe, head of impact investments at Prudential. “540 Broad Street’s redevelopment is another important milestone in Newark’s resurgence and will bring a historic gem in a critical location back to life.”
The development team is also relying on a $14 million allocation of New Market Tax Credits, made available by Goldman Sachs UIG and New Jersey Community Capital, to facilitate the lease-up of the nonresidential components of the project.
Amenities at 540 Broad will include a modern fitness center, game room, bicycle storage, in-unit laundry and a 24/7 doorman.
“540 Broad Street is an exciting public-private partnership that will continue to enhance Newark ongoing revitalization, creating jobs, boosting the economy, and providing much-needed market rate and affordable housing units,” said Charles A. Richman, the HMFA’s executive director. “The adaptive reuse of the New Jersey Bell building, with a mix of housing, retail and office space, not only preserves a strategically-placed historic building, but helps anchor the downtown neighborhood, giving residents walkable access to shopping, transportation, dining and other amenities.”
