Home ARC Tunnel In NJ, proximity to rail becomes alluring

In NJ, proximity to rail becomes alluring

by Benjamin Kabak

A few days ago, UBS made headlines when it announced its interest in moving back to Manhattan. While the cynical among us wondered if this was just a ploy to gain more favorable tax breaks by playing Connecticut off of New York, company sources claimed the move is necessary in order to attract young talent. Stamford, after all, isn’t exactly a happening city for good minds right out of college.

In New Jersey, a different story is unfolding: Transit-oriented development has become all the rage. Dana Rubinstein reports in The Journal today:

As New Jersey slowly emerges from the economic downturn, its office market is beginning to transform into one concentrated around train stations. Businesses have been leasing space in areas served by train stations at a higher rate than those only accessible by car, according to real-estate firms. The trend reflects demographic shifts and higher gasoline prices as well as changes in worker priorities.

For example, businesses are beginning to recognize that many employees care less about living in sprawling estates and more about living in diverse areas with restaurants and entertainment within walking distance, notes Robert Puentes, a senior fellow at the Brookings Institution Metropolitan Policy Program. “All these things are starting to add up and companies are very attuned to it,” he says…

The average vacancy rate in so-called transit hubs in New Jersey was 14.7% in the first quarter of this year, compared with 29.7% in areas not considered transit hubs, according to real-estate brokerage Jones Lang LaSalle. The report defines transit hubs as the 40 million square feet comprising office space in Newark, Elizabeth, Jersey City, Hoboken, Paterson, East Orange, New Brunswick, Trenton and Camden, Morristown and Metropark, all cities with rail service.

At the same time, asking rents in transit hubs were higher, averaging $27.43 compared with the rest of the suburban market’s $23.51, according to the Jones Lang LaSalle report. Since 2009, more than 20% of all leasing has occurred in the transit hubs, compared with 15 percent before 2009. Further, of the 52 leases larger than 100,000 square feet signed in New Jersey since 2008, 22 of them were in transit hubs.

Panasonic recently made headlines when it decided to move from Secaucus to Newark. While the decision has been driven, in part, by a generous tax credit, company officials say accessibility played a role in the move as well. “We have literally 1,000 people driving cars every day,” Peter Fannon, a company VP, said. “The key element for us, which really brought the focus back to Newark, were the environmental benefits, specifically the ability to be in an urban center where there are housing, restaurants, hotels, and most importantly, mass transit facilities, all within a three- or four-block radius of our new location.”

With these trends emerging and with policies in place to encourage hub-based growth and transit-oriented development, it would be an ideal time for New Jersey to move forward with a plan that will greatly improve trans-Hudson commuter rail access while cutting down travel time. Unfortunately, private businesses and state leaders aren’t seeing eye-to-eye. As development policies and economic realities push TOD, the ARC Tunnel plans, which will look more and more necessary as time passes, remain dearly departed.

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orulz June 13, 2011 - 12:37 pm

Wouldn’t it make great sense if somebody coming from Long Island or the New Haven Line could stay on a single train and go straight through Manhattan to Newark, to serve these types of commutes?

This could be done with very little capital cost. The only barriers seem to be political, and even those have been overcome to the point where Metro North runs “The Train to the Game” which brings New Haven line trains as far as Secaucus Junction.

tacony palmyra June 13, 2011 - 3:08 pm

It was my understanding that the “Train to the Game” service was sort of a first test in offering more of those kinds of through-routings in the future. But they’re only being done for Sunday 1pm games because there are no capacity issues in the system on Sunday afternoons. It might not be possible to do it on a weekday during rush hour?

Alon Levy June 13, 2011 - 5:16 pm

It is possible, modulo a lot of agency turf. It would require awful things like unifying the ticket sales at Penn Station so that a train from Long Island and a train from New Jersey can both use the same platform.

David June 13, 2011 - 1:49 pm

Proximity to rail and everything else is what makes urban centers the best location for major employment. All services and business are within a short distance for most people adding to the convenience and efficiency.
The suburb is the exact opposite. The garage-faced suburban house is the modern day equivalent to the Great Plains homestead. Socializing and human interaction are nearly non-existent except when at work in corporate culture. The car makes this possible and is now indispensable to our economic functioning.
Company CEOs can justify whatever they do for their own convenience and Panasonic got lucky with their current decider.

ferryboi June 13, 2011 - 2:10 pm

“Company CEOs can justify whatever they do for their own convenience…”

How true. I guess when you make $85 million a year and get picked up and dropped off every night in a black Lincoln Town Car, or have helicopters drop you off when commuting from NYC to CT or thereabouts, commuting isn’t such a problem. Must be nice.

Eric F. June 13, 2011 - 2:09 pm

I saw that article as well. I thought that it wasn’t all too well thought out actually.

(1) Basically, NJ is throwing money at developers to build near rail stations, on the premise that NJ has too much sprawl. Whether you accept the premise or not, this is a story about developers taking incentive money for otherwise uneconomical projects. If there is huge organic market demand for this stuff, the incentive plan would be unnecessary and the wasted incentive money could be applied to something useful, including to NJ Transit itself.

(2) Um, adding thousands of people to New Brunswick is not creating sprawl? It’s an odd way of looking at sprawl. New Brunswick is out there. And moving jobs from secaucus to Newark? Secaucus may not be urban by Manhattan standards, but it has an NJ Transit station and it’s in Hudson County, which is about as urban as anyplace in the United States.

(3) The development is uneven to say the least. Where is the big expansion in Linden, Elizabeth, etc., which are way more transit friendly than New Brunswick? The trend is not terrible uniform.

TP June 13, 2011 - 3:41 pm

1. Yes, but there’s something to be said for jump-starting a real estate market and using subsidies to attract a critical mass that will at some point cease to require subsidies.

2. Disagree on your characterization of both New Brunswick and Secaucus here.

New Brunswick: it’s surrounded by suburbs but it’s a city in its own right–walkable, relatively dense, and “urban” in most senses of the word. A good deal of it is Rutgers campuses (that spill over into adjacent municipalities connected by a massive campus bus network) and student neighborhoods, coupled with some low-income and immigrant communities. It aint cul-de-sacs. Also, NJ’s “Urban Transit Hub” program only gives the tax breaks to development within a half mile of the train station.

Secaucus: Whereas New Brunswick developed around its train station, Secaucus was historically a village along the Paterson Plank Road, which had trolleys running into Hoboken and Jersey City, where people would transfer to the ferries across the River. The NJTransit train station is new and it’s nowhere near the “town”– it’s not walking distance to anything. Of transit users in Secaucus today almost all are taking buses that follow those old trolley routes. That train station’s pretty irrelevant. But really, like that Panasonic rep says, if they’re middle class or up, they’re driving. Not the case in Newark right across from Amtrak, NJTransit, PATH, and walkable to urban amenities.

3. Other than being closer to the City I don’t think Linden and Elizabeth are all that more transit-friendly than New Brunswick, but I would argue that they need the help more because they have economically-depressed downtowns whereas New Brunswick does not.

Eric F. June 13, 2011 - 4:22 pm

On New Brunswick, absolutely is itself a center, but I wonder if the new urbanist types who backed the incetive legislation would be psyched to hear that it’s biggest success would be sticking a luxuiry high rise 40 miles from Manhattan.

I hear you about Secaucus, and totally agree that the town’s population is not next to the station in the swamp. I just mean to point out that forsaking Secaucus for Newark is hardly striking a blow against sprawl. The Panasonic move can be clothed in whatever sells the deal, but this was about a company with some leverage getting a very rich deal. Panasonic was shopping a variety of locations, and transit access was not a selling point for all of them. Had the company moved to Georgia I have no doubt the same guy would have toutesd access to peaches and pecans as being huge incentives for employee relocations.

Douglas John Bowen June 16, 2011 - 1:46 pm

On paper, Secaucus looks to be within the urban core. Out on the street, it’s truly suburban; indeed, residents (such as my barber) think of themselves that way, VERY different than how residents of Hoboken or Jersey City perceive themselves.

And that NJ Transit station in Secaucus? For better or for worse, not one of NJT’s stations with the best local access, and certainly deficient in terms of “walk on traffic” capability.

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