An effort to construct a second hotel in the Mile Square City has turned into a never-ending saga that just added another chapter, as Hoboken’s city council recently signed off on a new redevelopment plan that still includes substantial community investment.

The chronicle of bringing a Hilton to a waterfront parking lot at 1st Street and Sinatra Drive goes back to last October, when KMS Development Partners and the city agreed to a deal that would construct a 20-story, 349-room hotel on the parcel. That first redevelopment agreement contained a total $4.85 million in developer-funded givebacks to the community that included a $2 million payment towards renovating a former YMCA at 1301 Washington Street.

The initial pact hit a snag the next month when we broke the news of two local property owners suing over the agreement, arguing that the giveback payments were “unrelated to legitimate land use concerns” and “constitute a blatant quid pro quo for the City’s acquiescence to the Redevelopment Agreement.” KMS was granted increases for maximum gross floor area and maximum number of allowable rooms during the deal’s approval in exchange for the givebacks.

Hudson County Judge Anthony D’Elia ruled in March that allowing the deal to go forward “would create unacceptable possibilities for abuse and fraud and cannot be permitted for reasons of public policy.” As a result, the deal was voluntarily voided by KMS and Hoboken last month, but both sides had pledged to work out a new pact.

Supporters are hoping the second time is the charm for this project, as the city council approved a new redevelopment plan with KMS at their June 19 meeting. The details of the hotel portion remain mostly the same; the structure can include up to 350 guest rooms on 20 occupied floors, will include a 6,400-square foot rooftop terrace lounge accessible to the public, a gym, meeting and banquet spaces, on-site and off-site parking, a combined lobby bar and public restaurant, and a retail sidewalk café use on the ground floor.

The biggest giveback in the latest version of the deal involves a $3.2 million payment into an escrow account that will go towards “one or more projects with specific public purposes within or about the Post Office Rehabilitation Area, as determined by the city.” The allowable uses for the funds listed under the redevelopment include “infrastructure improvements and maintenance designed to improve, update, beautify, make resilient or otherwise enhance public facilities or rights of way; flood control; enhanced stormwater retention; improved bicycle and pedestrian access and safety; improved access to and safety of local parks and recreation areas; conservation of energy and potable water; furthering open space initiatives; and/or transit/transportation/traffic/parking improvements.”

Besides that, KMS will be contributing $165,000 towards First Ward improvements that will be chosen by the city. Additionally, an investment of $1.5 million for streetscaping, paving, sidewalks, lighting, utilities, landscaping, stormwater control, and the creation of a pocket park with the project are included in the deal.

Both a renovation to the neighboring Frank Sinatra Post Office plus the construction of an underground loading facility are still included in the new pact. However, there are no funds allocated towards a YMCA renovation this time around. Perhaps learning from the past, the agreement has a provision regarding a possible lawsuit that states “any legal challenge to the City’s directives with regard to how the Escrow Funds will be utilized shall not affect the City’s issuance or the continued effectiveness of any Certificate of Occupancy for the Hotel.”

Dennis Martin, Managing Partner at KMS Development, hailed the new agreement. “This is a great day for the City of Hoboken because this means that the waterfront hotel project is back on track,” Martin told Jersey Digs in a statement. “This redevelopment will be union built and operated, will fund major infrastructure upgrades, generate economic activity for local businesses, create good paying jobs for local residents and will become the gateway to the waterfront.”

The plans for the actual hotel itself will still need to be approved by the planning board before shovels hit the ground on the project.

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