The New Jersey Economic Development Authority is currently working with Bayonne officials on how best to transform the site known as the Peninsula Project, a former military base, into a mixed-use development with high-rise housing, port expansions, and commercial and retail development.
The relationship is in its beginning stages, with the EDA meeting with municipal officials over the next two months to learn more about the scope of the 430-acre site - the former Military Ocean Terminal - the potential development opportunities, and how city officials and the Bayonne Local Redevelopment Authority would like to proceed with the large-scale development. The BLRA oversees the Peninsula Project.
"If there's a continued rule for us in continuing to provide technical assistance, we'll do that. If there's an immediate role for us to play in development, maybe we'll do that," said Tom Lizura, senior vice president for senior management at the EDA. "We would wholly expect that at the outcome of this project, probably in the next 12 months or so, that there would be a financing for infrastructure. But that's really quite far down the road at this point, and it's fairly speculative and it all depends on how the recommendations come out and how the town fathers want to move forward."
The U.S. Army sold the former Military Ocean Terminal to Bayonne in 2001 for $1, yet restricted the city from receiving land-sale proceeds until July 2008. Late last month, BLRA officials agreed to extend that memorandum of agreement with the Army through October. While local officials have been evaluating different development ideas over the past few years, now state officials - through the EDA - can participate in the discussions and offer their insight.
"It gives the EDA the opportunity to get a better understanding of the project ... and then as individual financing opportunities arise, whether it's oriented towards infrastructure or towards project financing, they are better oriented or more knowledgeable in order to move forward," said Daniel Kurtz, BLRA's deputy executive director.
Officials say the Peninsula Project will require bonding at some point, yet which entities would issue the bonds and what type of borrowing is best suited for the site remains to be seen. Several issuers could issue bonds for the development, including the city of Bayonne, the BLRA, which, like the EDA, acts as a conduit issuer, and the EDA itself.
Lizura said financing options could range from general obligation borrowing to revenue-allocation bonds, which would securitize payments-in-lieu-of-taxes agreements, or redevelopment area district bonds, which are similar to tax increment financing debt. With RAD bonds, special assessment fees tied to a specified area or future property tax increases secure the debt.
"The whole suite of financing tools are on the table and that's kind of what we have to do over the next 60 days, " Lizura said.
Converting the former military base will require infrastructure upgrades to electric, water, and sewer service, along with roadway, and environmental improvements. It is anticipated that developing the site would yield increased property, business, and other taxes for Bayonne.
"It certainly is going to be transformative to Bayonne, and it could go in many, many different directions in that the mixed-use piece of it provides you some terrific and interesting options," Lizura said. "Everything from commercial to lodging to conferencing and residential to being at the crux of a major port operation. And so you really have the whole gamut and to get that right is a challenge, but it's certainly paramount for us to make sure that we maximize the value for Bayonne, as well as the state."
