Oct. 14 (Bloomberg) -- Newark, New Jersey, is home to one of the poorest downtowns in the U.S., a once-exuberant commercial retail corridor where many old movie palaces, ornate department stores and grimy storefronts stand empty.
Property is cheap because real-estate profits seem elusive. Developers aren’t flocking here.
Still, a convention-defying $149 million project called Teachers Village is in progress, aided by a long view and deep pockets.
Ron Beit, chief executive officer of Newark-based developer RBH Group LLC, is leading a group of well-known investors behind three charter schools and residential buildings with $800 apartments. Pritzker Prize-winning Richard Meier is the architect.
Newark Mayor Cory Booker, a U.S. Senate candidate, and Governor Chris Christie, a possible presidential contender, thought the project important enough to participate in its Sept. 25 ribbon cutting.
The hope is that good schools, inexpensive housing and well-chosen retail tenants would bring activity to the neighborhood, eventually a full-blown revival and further down the road the prospect of profits from additional 15 million square feet of mixed-use space.
“They understood the value proposition,” Beit said, “and that land is too cheap in Newark considering its assets and access to the Northeast Corridor’” -- the Boston, New York, Washington rail line.
The investors include Nicolas Berggruen of Berggruen Holdings Inc., Warren Lichtenstein of Steel Partners LLC, Frederick Iseman of CI Capital Partners LLC and Jeffrey Gould’s BRT Realty Trust.
The blue-chip lineup attracted Goldman Sachs, which made a $27 million senior loan. Local, state and federal government sources added several varieties of tax credits and subsidized bonds to the developers’ $14 million in equity.
Meier supplied the project’s master plan, doing without the sculptural gymnastics he’s known for -- at the Getty Museum in Los Angeles and elsewhere -- to keep costs down.
The firm designed a clean-lined four-story box, one of the first two buildings that have opened for the present school term.
Rough and smooth brick patterns echo a mix of clear and translucent glass to make a surface composition as rich as a Mondrian painting.
Two charter schools perch above street-level stores. Impeccably proportioned windows pour daylight into the classrooms of the 500-student Spark Charter Academy through alternating clear and translucent panels.
Unlike most inner city schools, there are no bars on these windows. The cheerful interiors were designed by KSS Architects of Princeton, New Jersey.
The 75 students of the Discovery Charter School, which covers grades four through eight, share a large open space painted lavender and dotted with houseplants. A girl named Kayla described an “amazing” curriculum that focuses on the basics while leaving time for botany and cooking skills.
KSS also designed a six-story red-brick building across the street for the middle school students of the Great Oak Charter School, which depends heavily on college graduates to tutor students. There’s also a yet-to-open daycare center.
The KSS design lacks Meier’s unerring sense of proportion and attention to detail and is worrisomely bare-bones inside. A windowless fire stair is the chief way students move from floor to floor. A caged exercise rooftop is a grim place to blow off steam.
Oddly, none of the schools has a ground-level playground in spite of an abundance of nearby parking lots.
Perhaps this can change by the time some 1,000 children attend the schools and daycare center.
New shops Beit is building will appeal to parents, and eventually to residents, when 200 rental apartments aimed at teachers are completed. Steel is rising on the first two of those buildings.
Beit avoided the national chains that lazy lenders prefer. He signed leases likely to make Teachers Village a destination, such as Harlem cupcake store Tonnie’s Minis and Chicken Jones, a casual restaurant created by Manhattan restaurateur Michael Vann. Those magnetic tenancies should fill surrounding storefronts.
I asked Beit how he financed quality architecture and unique rentals in a city developers shun.
He praised early partners who bought land -- not just for Teachers Village, but to eventually accommodate 8,000 residences and millions of commercial square feet that are in the works.
Beit and his investors will really cash in if Teachers Village proves to be a catalyst for a broader Newark revival and the land they’ve banked rises in value.
“Creating financial components that made investors stretch, but were not totally out of the realm of what they were used to, added layers of complexity,” Beit said.
He does not see financing such a catalytic mix getting any easier.
That’s too bad.
Struggling communities can almost never tap Wall Street stars and celebrated architects. Yet these are the places most in need of such transformational investment, not the opportunistic junk they usually get stuck with (think casinos) that fails to ease entrenched poverty.
(James S. Russell writes on architecture for Muse, the arts and culture section of Bloomberg News. He is the author of “The Agile City.” The opinions expressed are his own.)
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To contact the editor responsible for this column: Manuela Hoelterhoff at email@example.com.