Plan aims to build on success of Newark arts center

Posted: September 27, 2012

NEWARK, N.J. - The New Jersey Center for the Performing Arts is the shining star of the state's largest city, something that works in a place that has lots of things that don't.

The arts center, a 10-mile straight line from midtown Manhattan, opened in October 1997 and draws nearly 500,000 visitors a year to its 350 to 400 events. It is a warren of activity, a standout performer in an area dominated by wide boulevards of cars and mostly empty sidewalks, vacant buildings, little retail, and few restaurants.

What NJPAC, as it is known, doesn't have is a neighborhood, but it has the land and a plan, and that's where Philadelphia developer Carl Dranoff comes in.

Dranoff Properties will begin breaking ground next year for One Theater Square, a $110 million, 25-story, 250-unit rental apartment building with 20,000 square feet of retail on a parking lot across from the arts center's public plaza.

The area surrounding NJPAC and Military Park - often called Newark's "Rittenhouse Square" - has office buildings built in the 1980s and connected to aboveground parking garages and the train by skywalks "as a concession to the nervousness of white-collar workers," said Lawrence P. Goldman, head of Theater Square Development since June 2011 after retiring as president and chief executive officer of NJPAC from its starting point in 1989.

Goldman said it would be the first ground-up residential construction in four decades in a downtown considered by many to be one of the most challenged in the country.

"People say I'm a risk-taker," Dranoff said, recalling the skepticism that greeted his Left Bank high-end rental project near the University of Pennsylvania and the repurposing of the RCA Victor building on the Camden waterfront as apartments.

"We do our homework on the fundamentals involved in any project," said Dranoff, who was one of 12 developers from around the country to compete to build it. "If I take risks, they are calculated risks."

The One Theater Square project will be designed by Bower Lewis Thrower of Philadelphia. The project picks up architect Barton Myers' design of NJPAC - the steel, brick, and glass that reflect Newark's industrial past and "invites everyone to come in," Goldman said.

Rents will be $2.50 per square foot, 23 percent less than in Jersey City or Hoboken, whose residents Dranoff is hoping to lure to Newark as well as the 50,000 suburban dwellers who now work downtown and commute.

That's "the biggest risk in being the first to build anywhere, whether in Philadelphia, Camden, or Newark," Dranoff said. "There are no comparables to base prices on, so you have to create analogies."

Financing One Theater Square will require a conventional five-year, variable-interest-rate construction loan, $35 million in state transit-hub tax credits, and equity - "me and an institutional investor," Dranoff said.

"There are no residents," Dranoff said, "but a lot of things are there, including the thousands of visitors to NJPAC and the thousands of people who work downtown who want to live there."

Cory Booker, Newark's high-profile mayor, calls One Theater Square a "signature statement," noting that the city of 280,000 people saw, in the 2010 census, its first population increase in 60 years.

"One Theater Square is a critical building block," Booker said last week from Boston, where he was receiving the 2012 National Inner City Mayoral Leadership Award.

"It will have a multiplier impact immediately with construction jobs and then permanent jobs, and will bring thousands of people into the downtown," Booker said. "It's a big momentum-builder."

"My vision of Newark is one of a national model for urban transformation and change, economic empowerment, public safety, and improving the lives of children and families," he said.

Creating a neighborhood with NJPAC has been part of the plan since Gov. Thomas H. Kean commissioned a study to assess needs and sites for a performing arts center. A consultant recommended downtown Newark.

Goldman, then vice president of New York's Carnegie Hall, was brought in as president and CEO "and the only employee," he said, in 1989.

Kean was interested in building a "Lincoln Center-quality performing arts center in Newark," Goldman said. "While greeted with a high level of skepticism, it was also seen as something that could be a real engine to drive Newark."

Kean partnered Goldman with private-equity investor and philanthropist Raymond G. Chambers, a Newark native and one of the owners of the New Jersey Devils hockey team, who figured out how to do it, Goldman said.

A model for NJPAC was not Lincoln Center, but Pittsburgh's Cultural Trust, one of the country's premier examples of how the arts can be a catalyst for development and urban revitalization.

The nonprofit Cultural Trust turned what had been downtown Pittsburgh's red-light district into 14 blocks of arts-and-entertainment venues and residential construction.

Thomas Murphy, who was Pittsburgh mayor in the years after the trust began, said the challenge facing any city is, "How do you build a threshold that creates a magical kind of place, an environment where people linger before and after" performances?

"Just building a performing arts center has to be seen in a broader strategy," said Murphy, now with the Urban Land Institute.

The 12-acre NJPAC site cost $20 million, and the remaining eight acres, comprising three parcels, were targeted for development, Goldman said.

Current NJPAC CEO John Schreiber is a Haverford College graduate and the Emmy- and Tony Award-winning producer who put on the Mellon Jazz Festivals in Philadelphia in the 1980s and early 1990s.

"We want to create a real sense of neighborhood, refresh Military Park to make it like Bryant Park," he said, referring to the New York parkland. "With Prudential adding 2,500 employees to the neighborhood, all of this adds to a sense of energy, activity, fun, and excitement."

Prudential Insurance Co. is planning to build one new office tower and possibly two next to the old Hahne & Co. store on Broad Street, on the side of Military Park opposite NJPAC, while Panasonic's new North American headquarters is rising east of NJPAC on Raymond Boulevard.

"We want it to be commonplace for people to be on the street 24/7," Schreiber said.

Dranoff is looking beyond One Theater Square to the other two NJPAC parcels and the rest of the neighborhood around Military Square, including the Hahne store and the Griffiths Piano Factory next door on Broad Street.

His plans for what's next for him in Newark reflect his strategy for South Broad Street in Philadelphia, and Camden as well.

For his part, Booker said his administration is trying to make life easier for developers to work in Newark.

"Our priority is jobs, jobs, jobs, and we have to empower the private sector and not slow them down with bureaucracy," Booker said. "We created a 'rocket docket' that streamlines systems to help people and banish bureaucracies, to get approvals and push things over hurdles."

Still, Dranoff, the calculated risk-taker, has no illusions.

"I have the playbook," Dranoff said. "I'm well aware that things don't happen overnight."

Contact Alan J. Heavens at 215-854-2472, or @alheavens at Twitter.

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