Take 2 For Hoboken Hilton Hotel; New Agreement Approved

HOBOKEN, NJ — The possibility of a Hilton hotel on Hoboken’s waterfront is once again on the horizon.

Last week, the City Council approved a new version of an agreement with KMS Development Partners, which would bring a 20-story hotel to the area behind the Frank Sinatra Post Office near Pier A Park.

The hotel proposal has been getting airplay in Hoboken even before October 2018, when the City Council approved an agreement negotiated by Mayor Ravi Bhalla with KMS. The deal paved the way for the developer to build a 350-room hotel.

However, last March, the project hit a major speedbump when a Superior Court judge allowed a lawsuit against the city and KMS to proceed. That lawsuit – filed by the owner of properties adjacent to the Hilton hotel site – cited concerns about the terms of the project and sought to have it nixed.

In May, the Hoboken City Council unanimously voted to void the redevelopment deal, sending the entire project back to the drawing board.

• See related article: Hilton Hotel Proposal Dies, But Hoboken Mayor Not Giving Up

According to the Hudson Reporter, many of the details of the new agreement are similar to the previous arrangement:

• 20 floors and 350 rooms
• Ground floor retail space with a lobby bar/restaurant, and a rooftop bar and terrace
• Renovations to the existing post office
• Creation of a 1,880 square foot pocket park on River Street
• Using union labor on the project, creating about 550 regional construction jobs and 130 hotel jobs
• Provide about $2 million in annual real estate and hotel taxes to the city and school district

KMS praised the council’s decision to give the hotel deal a second try.

“We will deliver a state-of-the-art hotel with world-class amenities, conference room space and a rooftop bar with panoramic views of the Manhattan skyline,” KMS stated. “This redevelopment will be union-built and operated, will fund major infrastructure upgrades, generate economic activity for local businesses, create good paying jobs for local residents and will become the gateway to the waterfront.”

KMS credited Bhalla, the Hoboken Planning Board, Council President Jennifer Giattino, First Ward Councilman Michael DeFusco and the rest of the council for lending support to the proposal.

• See related article: Hoboken Hotel Workers Unionize, Win Better Wages And Benefits

COMMUNITY GIVEBACKS

The lawsuit against the city and KMS claimed that $4.85 million in planned "community givebacks" from KMS to the city – a major part of the negotiation process during the first go-round – "violated clear New Jersey public policy."

KMS was granted increases for maximum gross floor area and maximum number of allowable rooms during the original deal’s approval in exchange for the givebacks, Jersey Digs reported.

The givebacks included:

• An allocation of $2 million to revitalize the former Hoboken YMCA at 1301 Washington Street that will include a municipal pool, an uptown branch of the Hoboken Public Library, and additional classroom space for the Hoboken Public Schools
• $1.16 million towards "infrastructure upgrades," which includes the area adjacent to the hotel
• $1 million for the Hoboken Public Education Foundation to establish a permanent endowment
• $484,000 to 3 Hoboken Charter Schools, divided among the schools
• $200,000 contribution to Hoboken's Affordable Housing Trust

As part of his decision to allow the lawsuit to continue, Superior Court Judge Anthony D'Elia wrote that the "risk of bad faith, favoritism and the unlimited range of discretion, which would be afforded to municipalities in exacting off-tract contributions from redevelopers, is too great."

• See related article: Hoboken Hilton Hotel Hits Speedbump, $4M 'Givebacks' Questioned

A spokesperson for Bhalla’s office offered Patch the following statement about the new version of the hotel deal:

“Mayor Bhalla is pleased that the City Council adopted the updated hotel redevelopment agreement as put forward by the administration. The agreement maintains robust community givebacks agreed to by the redeveloper, that will provide a benefit to the city and residents. While the givebacks have not been identified at this time, it will have a direct connection to the impact of the hotel project as it advances to comply with the judge’s request.”

In a Monday email, Hoboken Councilwoman Tiffanie Fisher offered some additional details about the new deal and the hotly contested “givebacks”:

“The administration has now agreed with the developer to keep the same amount of the community benefit, but restructured it so that $3.2 million of it is put into an escrow account and can be used by the city after the hotel opens for a broad range of improvements generally tied to the new hotel.”

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