In 2018, plans were announced for a new hotel property on the Hoboken waterfront. After several years of litigation, project negotiations, and work with the city, the project’s developers have announced plans to begin work in 2023. The Hilton Hoboken Waterfront will be located at One Sinatra Drive. The hotel will have over 300 guest rooms plus space for private events and meetings. Read on to learn more about the project and the latest developments.
About the Project
In October 2012, the Hoboken City Council approved the rezoning of a parcel of land located on Sinatra Drive between 1st and Newark Streets, declaring it an ‘Area in Need of Rehabilitation.’ This started a long process of other efforts to study possible uses for the property, which was owned by the US Postal Service. In 2018, KMS Developers were conditionally approved by the City of Hoboken to redevelop the site. The final site plan was approved in 2020.
The team behind the project, KMS Developers, specializes in public-private partnerships. This is a type of project where the government works with a private sector company to create agreements for financing, building, and operating projects. The government will offer concessions such as tax credits or special permits in exchange for the operator’s commitment to community-driven goals such as certain building standards, hiring quotas, and discounted rent for local businesses. These are often extremely beneficial when a large project is involved such as a sports stadium or transit hub, because of the size and complexity of the project.
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While these PPP agreements are often pointed to as a successful collaboration between the private and public sectors, things can get sticky in the process. Critics say that these agreements blur lines between incentives and outright bribery, are ripe for self-dealing for the parties involved, and other negative aspects.
In the case of the Hilton Hoboken Waterfront, a lawsuit about some of those agreements was the cause for a significant delay in moving forward. Once KMS was conditionally approved by the City in 2018, two businesses that owned land near the parcel sued. The two businesses claimed that the payments made to the City were more of a ‘giveback’ than anything supporting community interests. The case was resolved in 2019 in favor of the plaintiffs: the Court found that the payments made by the developer to the City did not have a close enough nexus to the actual development. The City and the developer reworked that aspect of the contract and were sued again by the same plaintiffs. This time, the Court found in favor of the defendant, the City, saying that the new agreement, creating a $3.2 million escrow fund for future projects, had enough of a nexus to the project.
At the same time, over several years, the developers were in negotiations to purchase the parcel of land from the US Postal Service. The plans for the development maintain the post office in its current location and plan for renovations for the space. The post office is Hoboken’s main post office and was renamed in 2003 as the Frank Sinatra Post Office. It was built in the 1930s and is 30,000 square feet.
The Latest Update
In early August, it was announced that the sale of the parcel of land owned by the US Postal Service was complete. In a statement, the developer said:
“After 10 years of working with the USPS and pursuing local permitting approvals, the purchase of the property on August 3rd marks the latest in a long list of project development milestones and brings the project one step closer to becoming a reality. The hotel will be located on the subdivided lot facing the waterfront and will have the address of One Sinatra Drive.”
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“As part of this redevelopment, the Post Office will be the beneficiary of significant improvements and operational upgrades that will improve its ability to efficiently continue to serve the Hoboken community. With the purchase of the property completed and local approvals secured, we are now working to finalize project drawings and to secure the remaining pieces of construction financing” said Dennis Martin, Principal at KMS Development Partners.
What’s Next
In the same statement, KMS said that work is anticipated to begin in Spring or Summer 2023. The hotel is anticipated to have 349 guest rooms and will be 20 stories tall. There will be valet parking on-site, 9,000 square feet of meeting and event space, and a 6,000 square foot rooftop deck and terrace for events.
In a statement to TAPInto Hoboken, Mayor Ravi Bhalla said, “The Hilton Hotel Project will directly benefit residents across the City creating hundreds of jobs, millions in tax revenues, and critical improvements to neighborhood infrastructure. This project is a win-win for the City and I look forward to breaking ground on the new hotel next year.”
