Jersey City, N.J., granted a 30-year tax break for a New Jersey City University expansion project for which the city also plans to issue bonds.
The city council unanimously approved the tax break for a $97.7 million mixed-use development at the state university campus Wednesday. It also agreed to issue $16 million in negotiated bonds or notes to pay for infrastructure enhancements.
The nearly $100 million project will feature two five-story buildings with around 330 market-rate housing units and 21,520 square feet of commercial space. The initiative is part of a $400 million expansion planned on NJCU's west campus that will feature new dorms, academic buildings, a performing arts center, pedestrian plaza and retail.
NJCU president Dr. Sue Henderson said during the city council meeting that the entire expansion project of seven new buildings will create $141 million in economic activity from new residents and businesses along with $108 million in tax revenue to the city over the 30-year abatement period. Henderson added that $500 million in economic activity will also be generated during the construction period.
Jersey City Business Administrator Bob Kakoleski said the bonds will result in around $900,000 in annual debt service payments. He estimates the project will bring in around $2.8 million in annual revenue to the city.
The New Jersey Economic Development Authority issued $50.6 million in tax-exempt and taxable student housing revenue bonds last year on behalf of the NJCU Foundation for the university's planned new residence halls. S&P Global Ratings assigned the bonds a BBB-minus rating citing construction risks and cash flow projections.
Jersey City general obligation bonds are rated A1 by Moody's Investors Service and AA-minus by S&P. NJCU is rated A3 by Moody's and A-minus by Fitch Ratings.
