NEWARK, NJ—The New Brunswick Development Corporation (DEVCO) is expanding its reach further outside of the city where it started, playing a lead role in the renovation of a Newark skyscraper built in the late 1920's in partnership with Rutgers University.
The project, known as 15 Washington Street, is DEVCO's third development project outside of New Brunswick, and the second in Newark, the state's largest city.
Since 2000, when the Rutgers-Newark Law School left the structure, the impressive building has sat largely unused.
"It was really starting to degrade, it was costing [Rutgers] a lot of money," Chris Paladino, President of DEVCO, told New Brunswick Today.
Once completed, the 263,000 square foot building will be broken down into three components: an apartment-style residential section operated by DEVCO, an academic section operated by Rutgers, and an apartment spanning the 16th and 17th floor, which will serve as a residence for Rutgers-Newark's Chancellor Nancy Cantor.
"Development is never easy," Tony Calcado, Director of Facilities and Capital Planning at Rutgers, told Newark The Star-Ledger.
"It just took a lot of machinations, a lot of thoughts and a lot of ideas. The university realized it has a tremendous asset that was just withering away."
The structure has been a centerpiece of the Newark skyline since it opened in 1930, serving many different uses as tenants came and went over its more than eight decades.
At its beginning, 15 Washington Street was the headquarters for the American Insurance Company.
The company would evenually be acquired by the Fireman's Fund Insurance Company in 1963, which moved their headquarters to suburban Morris Plains in 1977.
The building was briefly owned by the Rutgers School of Law in Newark, before turning it over to the SL Newhouse Center for Law and Justice in 1979. The building was featured in various movie and television clips, such as an episode of The Sopranos.
The $85 million project is scheduled for completion in August 2015.
Financing had run into several road-blocks, with the Board of Governors of Rutgers having to increase the budget by $14 million. The funding will come from various state and private sources.
Rutgers will fund part of the project, including $10.75 million from the Higher Education Facility Trust (HEFT). HEFT, a product of the New Jersey Education Facilities Authority, issues bonds to help finance improvement of New Jersey university facilities.
Rutgers will also redirect $11 million of the $60 million load acquired for the Rutgers merger with the University of Medicine and Dentistry of NJ (UMDNJ) merger. DEVCO in turn borrowed $60 million from TD Bank to finance the renovation.
In addition, DEVCO will utilize tax credits received from the New Jersey Economic Development Authority. Those credits were in turn sold to Citibank, allowing Rutgers and DEVCO to close funding gaps that had provded a challenge to the renovation.
Being that DEVCO financed much of the renovation, the non-profit corporation would own and lease portions of the building for the next ten years. Rutgers will still operate those areas of the building, and be able to buy it back from DEVCO after the ten-year period.
Renovation of the site consisted of removing asbestos from the building, and has been done by Leonardo-based AJD Construction.
The project however, is not without criticism. Members of the Laborer's International Union of America (LiUNA) believed they should have been selected to oversee renovation.
Michael Lockett, a representative of LiUNA's Local 3 Essex Chapter, told the Newark-based Rutgers Observer that employing members of the union could have created a boon for the local economy.
Renovations at 15 Washington Street could have employed anywhere between 50 to 75 workers, according to Lockett.
Lockett said the reason DEVCO would not hire LiUNA was due to the fact that "they wouldn't follow our guidelines." Such rules would have included workers safety and benefits.
15 Washington Street is the second Newark project undertaken by DEVCO, the first being a UMDNJ dorm constructed nearly ten years ago.
In this instance, Paladino was both President of DEVCO, and a member of the Newark-based UMDNJ governing board. Paladino was absent from the October 19th, 2004 board meeting, where the deal with the development corporation was voted on.
According to a 2005 article by The Star-Ledger, the dorm would end up costing nearly $90 million to construct. Ground was broken for the dorm in October, 2004, and construction would continue until the completion of the site in August 2006.
Occupancy during the first year was just 60%. But in later years, with UMDNJ running the dorm as traditional campus housing, occupancy would end up reaching higher levels, closer to 100% .
After the UMDNJ merger, operation and ownership of the building was transfered to Rutgers from Meridian Properties, a private real estate company.
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