After going through a complicated capital stack — “If anybody really knows how to use New Market Tax Credits, I’d like to see you, because we’ve used them three times, and I still don’t necessarily appreciate it” — New Brunswick Development Corp. President Chris Paladino got down to the essence of why massive projects work in New Brunswick.
The town works together.
From global companies (Johnson & Johnson) to major health care systems (RWJBarnabas Health) to flagship universities (Rutgers University) to, of course, Devco, the city has been able to transform itself by becoming a model of economic development that few others have been able to follow.
It seems simple. It should be simple. But, it’s not.
Breaking down how the city has done it was the major focus of the recent Real Estate New Jersey event at the Heldrich Hotel in New Brunswick.
Paladino pointed to the Gateway Transit Village project, which opened in 2012 and featured a new bookstore, new apartments and new market-rate condos by the train station and Rutgers, creating an urban transit hub that many have attempted to follow.
“We pretty much financed three different components of that building in three different ways,” Paladino said — discussing money from the Transportation Trust Fund, Urban Transit Tax Credits and New Market Tax Credits.
Paladino said it was the start of doing complicated public-private projects. Many have followed — including the New Brunswick Performing Arts Center, the new academic buildings, honors college and dorms at Rutgers, and now the Jack and Sheryl Morris Cancer Center — but all follow the footprint, Paladino said.
Of course, the spirit of community goes back much more than a decade. It’s easy to trace it back to the 1970s.
In 1976, Devco was established as a nonprofit development company to initiate redevelopment projects and to serve as the vehicle for public and private investment in the city of New Brunswick.
About the same time, Omar Boraie was buying up properties. He saw a vision for the city when no one else did. That vision is carried on by his sons, Wasseem and Sam Boraie.
Boraie Development has purchased dozens of properties over the decades and has been a major builder of multifamily housing, including the Aspire, a 238-luxury building on Somerset Street that opened in 2015.
“The thing that’s made (New Brunswick) work, from our perspective, is that, when you come to the city with a deal, the city has the sophistication to almost be a part of your deal without actually being in your deal. A lot of other cities aren’t like that.”
The company recently announced it was selected by the New Brunswick Housing Authority to build a 30-story, 342-unit luxury building at 11 Spring St.
Wasseem Boraie told the crowd the single-focus vision of the town has meant everything to his family’s business.
“The thing that’s made (New Brunswick) work, from our perspective, is that, when you come to the city with a deal, the city has the sophistication to almost be a part of your deal without actually being in your deal,” he told the audience. “A lot of other cities aren’t like that.”
Boraie noted the importance of the town’s major players.
“Because you have institutions, there is a sense of determinism,” he said.
These pillars, Boraie said, give investors confidence.
Figuring out how to get things done together is key, RWJBarnabas Health CEO Mark Manigan said.
Read more from ROI-NJ:
When the best place for the system’s new standalone cancer hospital happened to be on a spot that had a public school, all the parties involved got together and built a bigger and better school nearby.
More than that, the cancer center not only is using local workers to build it, RWJBH is working with the local schools to create pathways so all residents can potentially benefit.
“Six hundred people are going to work in the cancer center,” Manigan said. “And the hospital has made investment with Middlesex County to create additional training programs at the magnet schools and at the county college, so that local folks are ready to take those jobs.”
It all seems pretty basic: Get together, solve problems.
Paladino said that has been the essence of the transformation of the city over the past 50 years. New Brunswick was in danger of becoming like many other Northeastern cities — outdated and out of synch with the needs of its residents.
Its leaders wouldn’t let it.
“The president of Rutgers, the president of the hospitals, the CEO of J&J and the mayor would get together on a regular basis, and say, ‘How are we going to get out of this mess?’” Paladino told the crowd.
Today, New Brunswick stands as a model — one in which 150,000 people go to work or to school on a daily basis.
One the state needs to find a way to copy elsewhere.