A plan by 260 Washington St Urban Renewal LLC calls for building 207 apartments and 4,000 square feet of ground-floor retail space at 260-272 Washington St. in Newark. — Courtesy: 260 Washington St Urban Renewal LLC
By Joshua Burd
A project that would bring more than 200 new apartments to downtown Newark is moving ahead with expanded support from the state, securing approvals for up to $74 million in Aspire tax credits from the Economic Development Authority.
The agency this week said the project, located at 260-272 Washington St., would create 67 units of affordable housing as part of a 23-story tower that also includes 4,000 square feet of ground-floor retail space targeting businesses owned by people of color. Those components were critical to securing the tax credit package, which the EDA approved last week at its monthly board meeting and marks an increase from a prior award.
The location of what will become The Metropolitan, a 207-unit building with an estimated cost of $123.8 million, is within walking distance of Newark Penn Station, the Newark Light Rail and several bus stops. Applicant 260 Washington St Urban Renewal LLC is slated to begin construction in late October, with the project slated to last 28 months.
“Thanks to Aspire’s flexible design and Governor (Phil) Murphy’s commitment to reinvigorate communities, mixed-use projects will help spur development in neighborhoods across the state and create good-paying jobs,” said Tim Sullivan, the EDA’s chief executive. “The added bonus of The Metropolitan’s downtown location and proximity to several major transit options makes it ideal for families and commuters.
“The development will help generate economic activity in the neighborhood, with dedicated retail space aimed to attract diverse businesses and clientele. With this latest approval, the Aspire program continues to support the expansion of affordable housing, while creating stronger communities.”
The subsidy takes the place of an award approved by the EDA in May 2023, which called for up to $49.8 million in tax credits for the project. According to an authority board memo, the applicant has since indicated that it would need additional Aspire proceeds to make the plan viable, citing inflated borrowing and construction costs and syndication pricing of Low-Income Housing Tax Credits that fell below its initial projections.
State lawmakers recently accounted for inflation and higher borrowing costs as part of a law amending the Aspire program, which Murphy signed last July. The EDA noted that the statute immediately made The Metropolitan eligible for a significantly larger award.
“When we created the Aspire program, it was designed with the intention of producing projects like The Metropolitan that benefit Newark families and commuters alike through job creation, transportation access, affordable housing, and business empowerment,” said Senate Majority Leader M. Teresa Ruiz, a Democrat representing parts of Essex and Hudson counties. “This forward-thinking project is an exciting step forward in revitalizing downtown Newark in an inclusive, innovative way that respects the unique needs of our community. Its careful consideration for promoting equity in redevelopment will greatly benefit Newark residents and bring new visitors to our growing downtown.”
According to the EDA, the $74 million tax credit allocation represents 60 percent of eligible project costs. The authority added that the development would incorporate the Good Neighbor Program, which will allow tenants to receive credits toward their rent in exchange for volunteering at a local nonprofit organization in Newark.
The development team, a partnership between The Hanini Group LLC and Shift Capital, has demolished the site’s existing buildings but will retain the historic façade on the new development. The firms received both preliminary and final site plan approval prior to their initial application last year.
Chris Murphy of Murphy Schiller & Wilkes LLP represented the joint venture as tax credit counsel in connection with the Aspire application and award.
“The Metropolitan embodies the spirit of the Aspire program,” said Assemblywoman Eliana Pintor Marin, a Democrat representing parts of Essex and Hudson counties. “It is our commitment to ensure that all residents have access to quality, affordable homes. As sponsor, I am proud to see the impact it is having in fostering economic growth and community in Newark and across the state of New Jersey.”
Newark Mayor Ras J. Baraka added: “This mixed-use residential development project contributes to many of our goals: revitalizing our downtown, offering more affordable housing for our residents, and helping to strengthen our economy. With a nod to our past, this development project also retains historic features of the previous building’s façade and with eyes on our future, it encourages tenants to give back to Newark as volunteers with incentives connected to its partnership with the Good Neighbor Program.
“This is a win-win for our city. I thank the New Jersey Economic Development Authority, the Hanini Group, Shift Catalyst and their partners for creating this project. They and the tenants who will live and volunteer here are what make us Newark and proud of it!”
Officials have noted with past approvals that Aspire, which was created by the New Jersey Economic Recovery Act of 2020, is a place-based economic development program to support mixed-use, transit-oriented development with tax credits to commercial and residential projects that have financing gaps. As a performance-based program, projects must certify that all commitments established at time of approval have been met before receiving their first disbursement of tax credits.
EDA pledges Aspire tax credits for major Newark, Camden and Morristown housing projects
