The City Council of East Orange has voted to approve a PILOT agreement with developer Blackstone 360 LLC for its proposed luxury residential building at 260 S. Harrison Street. With the approval of the PILOT, the Newark-based developer is expected to break ground on the building in January 2019.
The building, known as “Allure 260,” is Blackstone 360’s fifth major development in the City of East Orange and is expected to cost $45 million, bringing the developer’s total investment in the city to approximately $150 million in the last 10 years. The largest project in the city to date by Blackstone 360, Allure 260 will rise 18 stories, encompass 325,000 sq. ft. and contain 201 luxury residences.
Prior to the development of Allure 260, the site was an assemblage of parcels, including an uninhabitable single-family home. Blackstone 360, also known as B-360, will continue to pay assessed taxes on the property to the City of East Orange during the course of development. Once the building is occupied, the annual payments in lieu of taxes, or PILOT, to the City of East Orange will reach approximately $400,000 per year. This figure represents more than 10 times the annual revenue currently collected under assessed taxation, partially a result of the historical underutilization of the underlying lots. The luxury high rise is expected to be completed by the end of 2020.
On a macro basis, the total PILOT revenue to the City of East Orange derived from all of B-360’s developments will eclipse $1.5 million annually once Allure 260 is occupied. The same underlying real estate was producing $1.2 million less in annual revenue under assessed taxation prior to development of those properties by B-360.
“This is a major win for the city and the community,” said Daniel Jennings, Director of Policy, Planning and Development for East Orange. “This property was an abandoned blight. Now, this new luxury high rise will be part of the renaissance of East Orange. B-360 has made a sustained commitment to the City of East Orange and this partnership, step by step, has helped build the road to revitalization— a road that other investors, including Goldman Sachs, are now happy to walk with us because they know the demonstrated value of East Orange and this administration’s commitment to its future.”
Groundbreaking on Allure 260 is expected to precede the grand opening for Lotus 315 at 315 S. Harrison St. by approximately three months. Lotus 315 will be the fourth luxury B-360 development on S. Harrison St., with this development incorporating a significant retail component to serve as an amenity to the thousands of residents in the immediate vicinity.
“Our partnership with the City of East Orange has allowed us to take land and buildings that nobody wanted and transform them into vibrant and flourishing communities filled with amenities and easy access to major highways, mass transit and New York City,” said S. Airaj Hasan, President and CEO of Blackstone 360. “Everyone said it couldn’t be done, but one building at a time we have demonstrated the extraordinary value proposition of East Orange and B-360.”
Blackstone 360 purchased its first property in East Orange in 2006, buying the abandoned 10 story shell at 141 S. Harrison St. from the city at auction for nearly $1.5 million. The design, development, and construction processes included the structural steel and concrete expansion of the existing structure to yield 105 high end apartment units — increasing the building’s unit capacity by more than 40 percent.
“All of our existing buildings are more than 98 percent occupied, and the wait-list for Lotus 315 is already at more than 800 unique residents,” said Ibrahim Hasan, Managing Member at Blackstone 360. “B-360 residents are afforded a similar lifestyle, largely via a contemporary urban aesthetic and high-end amenities, as is afforded to residents in some of the most high profile new developments in New York City and the Gold Coast of New Jersey – all at compellingly lower rents.” He continued, “The grand opening of Lotus and the construction of Allure are in many ways a culminating moment. In 2006, we took on an extraordinary long-term challenge, made continual extraordinary investments, and most importantly executed on our promises to all of the stakeholders in our East Orange developments. By over-delivering on our projects, we have proven that our commitment to a community can serve as a catalyst for positive change in potential-rich urban American cities.”Related Articles: