Aftermath of city's settlement with New Gold Now that developer will get to build towers at 110-111 First St., what are the consequences?
Jul 28, 2006 | 174 views | 0 
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But area activists are not happy about the potential for a change in the neighborhood.
Rich Tomko, president of the Powerhouse Arts District Neighborhood Association (PADNA), was at the June 28 City Council meeting when the settlement was approved. Last week, the decision still upset him and his fellow residents. Tomko and his wife live at 143 Morgan St.
"Our residents are upset with City Council, not with New Gold," he said. "Asking New Gold not to want to go high is like asking a dog not to bark, but asking our elected representatives to represent the community's wishes is asking them to do their jobs."
He added, "The PADNA, in coordination with all the downtown organizations, is exploring various options relating to this settlement."Finalizing the settlement
Before the settlement can continue, both sides have to sign a consent order that states the terms, and then it has to be looked over by State Superior Court Maurice Gallipoli and U.S. Federal Court Judge Dickinson Debevoise.
The settlement which would end all lawsuits filed by New Gold Equities, a New York-based real estate company with principal ownership by real estate mogul Lloyd Goldman, against the city. In turn, New Gold will be allowed to build one, possibly two 40-plus story towers on the 111 First St. site and one 40-plus story tower on the 110 First St. site.
Both sites were work-spaces for artists until New Gold evicted them.
The city is paying a price for this settlement, from both a financial and planning standpoint.
The city loses out on collecting $76 million in fines, and only receives a $1 million donation to be allocated 50/50 to the Loew's Jersey Theater and the Jersey City Museum and $45,000 for legal and engineering costs.
But more importantly, the towers would be built within the Powerhouse Arts District (PAD), 10 blocks of historic warehouses located that have been designated as arts and entertainment district.
New Gold will be allowed to deviate from current restrictions of the district's zoning that permits buildings to be only 12 to 14 stories and a 90-day marketing period to artists.
Both artists and non-artists who moved into residential buildings within the district voiced their disapproval of the settlement at a June 28 meeting of the City Council.
Their contention is that they moved into area that wasn't besieged by high-rise towers as much of Downtown Jersey City near the Hudson River waterfront.
Their concern is that once New Gold or whomever builds on the First Street properties without having to comply with the restrictions of the PAD, then other developers will sue the city for the right to do the same.
As it stands, the Powerhouse Arts Redevelopment Plan would be amended to create a zone particularly for the 110 and 111 First St. properties called "The Powerhouse Arts Residence Zone." Lawyer: It benefits both
To say New Gold Equities attorney Dan Horgan is happy about the settlement is an understatement.
When he left the June 28 City Council meeting, Horgan was grinning ear to ear.
Last week, he spoke further on the settlement and what it meant for New Gold, or more specifically, company president Lloyd Goldman.
"My client wanted to resolve this in a way that was in his and the city's best interest," said Horgan. "It was nine months of hard work to address some of the issues that both sides had, and I believe everything was addressed."
Horgan referred to a decision set down by Gallipoli in September for the city and New Gold to come to a settlement rather than engage in lengthy and costly legislation.
When asked if New Gold benefited substantially from the settlement, Horgan dismissed that contention as "almost silly."
"I'm certain Monday-morning quarterbacks will have their opinions on why this settlement was one-sided, but I don't think that's fair," said Horgan. The Athena Group
New Gold is currently working with the New York City-based real estate firm the Athena Group to build the towers. The Athena Group is currently building a 33-story, 250 condo development at 389 Washington Blvd., only several hundred feet away from both the 110 and 111 First St. properties.
Based on an estimate done by a real estate appraiser, Chuck Blau, at a meeting of the city's Historic Commission last year, 255 condominium units could be built in 111 First St., meaning that New Gold Equities could stand to gain at least $171 million. Reactions in the aftermath
The fallout from the City Council's decision is still being felt by the residents living in the PAD and others affected deeply by the City Council's decision.
But the harshest criticism came from Bill Rodwell, former tenant in the 111 First St. building, who sent a long letter to the editors of the local newspapers.
The letter, in an unedited version, lashed out at Lloyd Goldman, Mayor Jerramiah Healy, the City Council, and anyone else who had a role in the settlement going through.
"How, one might ask, when so many people were against the settlement and so few in favor, could it turn out like this?" he asked. "What's really going on here? Memo to U.S. Attorney Christopher Christie: are you paying attention to any of this?"
Rodwell also referred to the potential towers as "a testament to Mr. Goldman's mean-spirited bullying, as well as to a failure of resolve by the intellectually lazy and inept Healy Administration." Ricardo Kaulessar can be reached at rkaulessar@hudsonreporter.com
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