Investors who redeveloped and leased a historic Newark department-store site have secured more than $100 million in financing to revive another city landmark.
L+M Development Partners Inc. and Prudential Financial Inc. have closed on funding that will allow the venture to convert the old New Jersey Bell headquarters building at 540 Broad St. into a mixed-use tower with 263 market-rate and affordable apartments as well as office and retail space.
The partners are hoping to continue the city's development momentum, which has brought residents to its downtown, revitalized parks and spurred plans for more office and retail space.
State and city leaders are pitching Newark, along with up to $7 billion in tax incentives, to Amazon.com Inc. as the tech giant conducts a countrywide search for a second headquarters location.
Part of the venture's mission is to revitalize Newark's downtown as a round-the-clock neighborhood, injecting a residential element, said Ommeed Sathe, vice president and head of impact investments at Prudential.
"We wanted to be fuel for that momentum," said Jonathan Cortell, vice president of development at L+M Development Partners. "This is a great city that has long been overlooked and has such great infrastructure."
Citi Community Capital is providing a $71 million construction loan and will provide $14 million in funding through historic tax credits. Goldman Sachs Urban Investment Group is providing $13.5 million in funding through various tax-credit programs.
The venture and its financing partners are no strangers to complex historic redevelopment projects. L+M, Prudential and Goldman Sachs Urban Investment Group teamed up to redevelop the Hahne & Co. building, where Rutgers University, Whole Foods Market and a bookstore operated by Barnes & Noble Education Inc. are tenants. The project included 160 apartments, 40% of which are designated affordable. Marketing began last winter, and those apartments were quickly leased, Mr. Cortell said.
"There is strong continued demand on the residential side," Mr. Sathe said. "And you are starting to see projects in surrounding municipalities start to advertise the proximity to Newark. It's a great sign of where we think the city is heading."
The 1929 art deco Bell building, purchased last year from Verizon Communications Inc., was designed by architect Ralph Walker of Voorhees, Gmelin & Walker, a firm known for designing buildings for the Bell companies, according to federal documents. Rising 20 stories, the building's facade features massive sandstone figure reliefs representing telephone company workers, such as a lineman, operator and a repairman.
When the building is converted, 20% of the apartments will be affordable at levels up to 50% of the area's median income. The building will feature apartments ranging from studios to three-bedroom units, a fitness center, ground-floor retail and about 80,000 square feet of office space.
The venture will replace the windows and remove a stairwell from the east side of the building, which has views of the New York skyline, and is considering a corporate auditorium space for options such as a community theater, Mr. Cortell said.
The project "represents a commitment to jobs, development, and to bring quality housing and economic growth to our downtown," Newark Mayor Ras Baraka said.
Write to Keiko Morris at Keiko.Morris@wsj.com
(END) Dow Jones Newswires
October 17, 2017 20:18 ET (00:18 GMT)