A new 250,000-square-foot headquarters for Horizon Blue Cross Blue Shield of New Jersey.
A new mixed-rate multifamily project by the waterfront to replace the outdated former headquarters of Horizon and NJ Transit at Penn Plaza East.
It was all Newark Mayor Ras Baraka could hope for and more.
Baraka, reacting to the announcement Tuesday of a multi-step plan (here are all the complete details) said the idea would breathe even more life to the business district around New Penn Station.
“Penn Plaza East’s multi-faceted, future-facing redevelopment will be a crowning jewel in Newark’s continuing ascent toward next-level vibrancy and prosperity,” he said.
Baraka said the effort represented the all-together philosophy he has preached to the business community.
“By continuing to call Newark home and redoubling their commitment to our community, Horizon and NJ Transit serve as national models of corporate social responsibility,” he said. “Newark embraces this collaboration with full support for the broader public private partnership that it represents.”
Doug Falduto, Horizon’s VP of administration and chief security officer, said the proposal is a big win for everyone.
“Horizon is excited to work together with NJ Transit to support the mayor’s vision and create new opportunities that bring more residents and retail businesses to the area around Penn Station,” he said.
“We have called Newark home since our founding nearly 100 years ago. An essential element of this plan is a new headquarters to be built and financed by the developer that allows Horizon to remain in Newark and continue to serve our members in the most financially responsible way possible.”
NJ Transit, which moved its headquarters to the nearby Gateway complex earlier this year, was just as excited by the prospects.
“The redevelopment of our former headquarters property is a key step in advancing our real estate strategy and our commitment to unlocking new value from our assets,” NJ Transit CEO Kris Kolluri said.
“Aligned with the recent launch of our LAND Plan, this project reflects our disciplined approach to generating incremental revenue for NJ Transit, while contributing to economic growth across the state and in cities such as Newark through new jobs, housing and long-term investment.”
The project came about when two key facts about NJ Transit’s former home become apparent:
- The NJ Transit building at Penn Plaza East, which became vacant after the agency completed its move to Gateway earlier this year, could not be renovated for modern office or residential use in a cost-effective manner;
- The NJ Transit building could not be demolished and rebuilt at an appropriate scale without including the building of its neighbor, Horizon, in the redevelopment plan.
- The financing for the projects also has multiple steps, Simoncini said.
- The brokers expect the project will be eligible for Aspire Transformative tax credit award status from the N.J. Economic Development Authority. Simoncini said the team is exploring additional financing options, including issuing bonds to facilitate the monetization of the tax credit award.
To get to the multiple finish lines — potential ribbon-cuttings of the Horizon headquarters and the multi-family project along the waterfront — there are a domino series of plays that need to be made, including:
- A developer will need to be selected to construct the Horizon headquarters building, a project that is expected to take more than two years to complete;
- When the new office building is complete, Horizon will need to move its operations to the facility from its current office at Penn Plaza East, less than a mile away;
- Once Horizon moves, its current office building at Penn Plaza East — as well as the building that previously housed NJ Transit — will need to be razed, taking 1.1 million square feet of office space out of the market. The NJ Transit building has been all but empty since NJ Transit completed its move into Gateway earlier this year;
- The 4-acre lot that currently contains both buildings on Penn Plaza East will then need to be redeveloped into the multi-family project.
Steps to do this are underway.
NJ Transit, through its real estate broker JLL and in conjunction with CBRE representing Horizon, is inviting potential developers to register their interest by Dec. 31 to request a copy of a Confidential Information Memorandum (Do so here).
Interested developers who receive the CIM may be invited to attend a future Information Sharing Event hosted by JLL and CBRE. The Information Sharing Event will provide an opportunity for JLL and CBRE to share further details of the anticipated timeline and to answer questions submitted by participants in advance of or during the ISE.
The vision is clear.
NJ Transit and Horizon see 1 Penn Plaza East and 3 Penn Plaza East, as a prime opportunity for premier mixed-use, multi-housing development on three acres with sweeping, unobstructed views of the Passaic River and Manhattan skyline.
Located within the city’s Newark River Redevelopment Plan, the site could accommodate up to 1,000 units of residential development in addition to integrated retail and structured parking. It is also within proximity to Newark’s historic Ironbound neighborhood, known for its restaurants and vibrant community.
Baraka can’t wait for it to become a reality.
“Their investment will create new spaces for living, working and recreation, enliven our downtown, enhance our riverfront, and attract residents eager to benefit from the most extensive tri-state rail network in the nation,” he said.
