The $600 million, three-tower residential project that Jersey City believes will transform Journal Square is set to receive a 30-year tax break, in addition to $10 million in bonds issued by a city agency that will pay for infrastructure improvements in the area.

The deal is the first for a market-rate project since Mayor Steve Fulop implemented a new policy regarding the tax breaks – known as tax abatements – that Fulop says will encourage development in areas of the city that aren’t located along the lucrative Waterfront.

The city's deal with developer KRE Group, up for initial approval by the City Council tomorrow night, includes $2.5 million to help revamp the Landmark Loew's Jersey Theatre. During his campaign for mayor, Fulop said he wants the Loew's, once a premiere destination for films and live shows, to rival the New Jersey Performing Arts Center in Newark.

Construction on the $240 million first tower, which will rise 54 stories and include 540 rental units and ground floor retail space, is scheduled to begin by the end of the year. KRE expects to complete it in two years.

“It's going to change, obviously, the entire landscape in Journal Square,” Fulop told The Jersey Journal.

This isn’t the first time a Jersey City mayor has promised a Journal Square renaissance. In 2009, then-Mayor Jerramiah Healy said a twin-tower project on a lot directly across from The Jersey Journal office was imminent, but that property remains empty. Healy has said that project stalled because of the economic downturn.

“The public has seen groundbreakings before that didn't come to fruition,” said Fulop. “People are going to see steel coming out of the ground very, very soon.”

The three-tower project is set for a 2.5 acre lot at the northwest corner of Summit and Magnolia avenues. KRE has pledged to make improvements to the sewer lines and sidewalks, as well as creating and maintaining a new public plaza on the eastern side of the Journal Square PATH station.

KRE, fronted by developer Murray Kushner, received $33 million in state tax credits for the first tower.

Instead of traditional taxes, KRE will pay about $650,000 annually, as well as a service charge to the city and to Hudson County, for either 35 years from the date the ordinance is adopted or 30 years from substantial completion of the project, whichever comes first.

In addition, the developer will give $2.8 million to build affordable housing in the city.

The $10 million in bonds will be issued by the Jersey City Redevelopment Agency, but city officials say KRE already has a purchaser for the bonds, and the developer will be tasked with paying them back. The bonds will not be considered city debt, officials said.

An earlier version of this story should have said the tax break is planned for 30 years.