DEVCO plans on opening retail, business hub by end of year
A new development for corporate, retail and residential use, The Hub @ New Brunswick Station, will be established across from the New Brunswick Train Station. Site preparation is complete, but the development timeline has not been publicly released at this date.
The developer is the New Brunswick Development Corporation (DEVCO), which has developed projects such as The Yard @ College Avenue and the Rutgers Academic Building. DEVCO was not able to be reached for comment.
DEVCO’s website describes itself as “a private nonprofit urban real estate development company founded in the mid-1970s to serve as a catalyst for the city’s revitalization.”
The Hub @ New Brunswick Station has been seeking tenants through its website since at least January 2015. DEVCO’s website lists The Hub @ New Brunswick Station’s anticipated completion date as 2019.
The building will house space for retail, dining, business offices and residency. It will also work to connect with Rutgers students and faculty, who are just across the train tracks.
“Occupants will receive an exemption from sales tax on construction and may be eligible for other city and state incentives,” according to the website.
DEVCO has some access to financing from other parties such as banks and investors, said Clinton Andrews, a professor of urban planning and director of the Rutgers Center for Green Building.
It is difficult to get financing until banks and investors are convinced there is demand for the building, he said.
“Because they don’t want to put money into a building that might sit empty, they want to make sure the building will fill and people will start paying rent and they will start making their money back,” Andrews said.
A typical way to convince banks and investors is to find an anchor tenant who really wants to lease space in a building for a long lease, such as 5 to 10 years.
“That has been one of the things that have been hanging up the project for a while, is finding the anchor tenant,” Andrews said.
Also, part of a typical regulatory approval process for any building project is a traffic study, where developer-paid engineers estimate the change in traffic loads and the impact of parking from the project, he said. Then, there will be board meetings in which those estimates are revealed, usually a year before construction begins.
The planning board will make a list of requirements for the project. For example, it must confirm that the water and sewer lines can handle the additional loads, or else it may need to show that stormwater runoffs will not cause problems with the Raritan River, Andrews said.
“The Hub, you know that big hole in the ground, is just one in a long string of redevelopment projects that the city of New Brunswick has undertaken since the 1970s,” he said.
The suburbs were built in the 1950s and 60s because the federal government made it easier to buy mortgages for homes and then built interstate highways connecting the country. This growth of suburbs began to slowly kill off America’s cities at that time, including New Brunswick, Andrews said.
The pharmaceutical company Johnson & Johnson elected to stay in New Brunswick and financially support the town while the city government’s redevelopment authorities condemned certain properties and built new buildings, he said.
This process of redevelopment has gone on all around the world, Andrews said.
“There are heavy-handed, top-down ways to do it and gentler bottom-up ways to it. New Brunswick has tended to be on the heavy-handed, top-down flavor of development,” he said.
Real estate development requires people to put a lot of money in and hope they will be able to earn a return by renting the space out, like gambling, Andrews said.
For instance, it was risky to build condominiums in the 1980s because people were leaving the city. So developers built office buildings first, and then attempted residential because people were working, he said.
“All of that is about managing the investment risk, doing things in the order in which that the market is likely to be interested in them,” Andrews said.
Rutgers, in a statement to The Daily Targum, said in working with DEVCO, it is looking for the best ways to impact its students’ academic experience.
“With respect to The Hub, we continue to work with various entities, including DEVCO and the state, to explore and understand what the best impact would be for Rutgers and our students,” said Dory Devlin, senior director for Rutgers University News and Media Relations.
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