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While construction has yet to begin, he expects that to change soon as the firm prepares to submit a formal plan to the city in early 2023, with a “spirit and vision of ... having a community- anchored institution, commercial space and housing that’s within reach for local folks that want to live there.”
Its plans also include a new 78-unit apartment building in East Orange that is set to go vertical, along with a 135-unit project in Plainfield, among others.
“In Jersey City or the Gold Coast, there are plenty of top-notch developers building all kinds of high- end product. They didn’t really need another developer,” said Kelman, Blue Onyx’s founder and CEO, later adding: “We have an affordable housing shortage in New Jersey, so by building good-quality properties and upgrading units in areas that are typically run-down, you’re providing a great service and you’ll be able to do just fine.”
The firm, meantime, is building
a team to support its growth,
with recent hires ranging from a chief operating officer to a head
of development and acquisitions. Kelman projects that the firm, currently at about 20 full-time employees, will grow significantly in the coming months “as we ramp up and make that change from one business model to another.”
Kelman’s plan to become a developer and real estate investor goes back nearly 15 years, he said, and he knew the importance of being patient and starting small. That meant getting a “day job” of buying two- to four-unit properties out of foreclosure to renovate and rent, often with investors, starting in Paterson around late 2008 after others encouraged him to look in New Jersey.
His earliest deals included small multifamily homes often clustered in the same neighborhood, such as Jackson Street in South Paterson, where he amassed around a half- dozen properties on one block. Doing so provided a real-time
look at the impact of upgrading a neighborhood’s housing stock.
“Very often, our residents were moving from homes on the
same block that are just poorly maintained, so we didn’t even have to heavily market our units,” Kelman
said. “We just gave them a good, quality product — brand new —
and they just moved in, sometimes before the carpet was tacked down.”
Blue Onyx built a sizable portfolio in Paterson and Passaic County over the next five years — as an owner and manager — but also grew in Bergen, Essex, Union, Atlantic, Rockland and Westchester counties. And it managed to scale while preserving affordability for its residents, he said, largely by maintaining construction, leasing, property management and other functions in-house.
“I like to touch and feel things,” Kelman said. “I’ve heard a lot of success stories of people who went into a company that worked in the mailroom or as a custodian.
“I don’t know if they’re true,” he joked, “but that story has always resonated, that you really have to start at the bottom and work your way up.”
He was especially drawn to Paterson after having heard stories of “placemaking” in areas that had untapped or unrealized potential, he said, citing the types of case studies
created by organizations such as the Urban Land Institute.
“When you go on tours where
they show areas that have really revitalized, and you listen to the developers, the stakeholders and the community members that have lived through that, it’s given me a lot of insight into how we can replicate that process as well,” he said. “And
I saw a lot of the raw material ingredients in Paterson, particularly around the (Great Falls), which
gave me the confidence to begin that process here, through acquiring a site with a general concept in mind
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