WEEHAWKEN -- Seemingly everyone knew this tiny cliffside town -- all 1.4-square miles of it -- would one day become a dynamic real estate market.

Barbara Tulko, a Weehawken resident since 1974 and a realtor since 1984, remembers diverting bubbly first-time buyers in the 1980s looking to live in Hoboken up to neighboring Weehawken. It had the same key features the more well-known community had -- views and easy access to Manhattan -- but was less crowded and considerably less expensive.

Mary Ciuffitelli, a 37-year Weehawken resident, would advertise various properties she owned as the "extreme West side" -- because it was nearly an extension of Manhattan.

"Suburban living on the footsteps of the city," echoed Ciuffitelli's realtor Andrew Sanderson.

With the New York City skyline in the distance, people wait for the Macy's fireworks show to begin in Weehawken. (Photo by Yana Paskova/Getty Images)

But in 2017, Weehawken requires no diversionary tactics or aggressive sales pitches.

Because of demand from buyers who have been priced out of New York City, Hoboken and Jersey City -- and who are now scooping up luxury waterfront condos -- median home values in the town of under 15,000 residents increased nearly 25 percent over the last year. It's the highest surge in the state.

Median home values are now at $757,500, compared to $488,000 in 2012, and Zillow predicts that figure will hit $809,000 by July 2018. The price continues to rise as a surge of waterfront development has taken place in the town through which the Lincoln Tunnel and it's daily 50,000 number of drivers pass, including construction of The Estuary (589 rental units), The Avenue Collection (177 condos), and RiversEdge (236 units) and RiverParc (280 units).

Yet the spoils of gentrification are rarely evenly distributed -- and a closer look at the boom in Weehawken reveals tensions and fault lines. In a town where 55 percent of students in their school system are on free or reduced lunch, the largest property value increases have largely been concentrated near the waterfront.

And with the cliffs of the Palisades sharply dividing longtime residents, who live at higher, inland elevations and share a western border with Union City, from new city transports down along the Hudson River, some say that the town has split into two.

"You could say you know everyone in Weehawken," says Enrique Romero, who grew up there. "Before you go down there."

"We created now a new city," says Gabe Pasquale, senior vice president of marketing and sales for Landsea Homes, one of the developers of the waterfront.

How Weehawken got so hot

As far back as 1804, when Alexander Hamilton and Aaron Burr rowed across the Hudson River from Manhattan to conduct their famous duel atop the Palisades, Weehawken's immediate access to New York City was its greatest selling point.

Atop the Palisades were the homes, the post office, the schools -- everything that makes a community. The waterfront -- 180 feet below -- housed the thriving Weehawken Terminal, an intermodal that featured ferry slips, passenger train tracks and rail yards. The Lincoln Tunnel opened in 1937, creating a connecting point between Midtown and New Jersey by automobile.

Abandoned Weehawken pier in March 1981. (Hudson Dispatch archives)

But in the 1950s, the railways closed shop, and for decades the area withered. In 1981, Arthur Imperatore swooped in and bought 2.2 miles along the Hudson River waterfront hoping to transform it into his vision of "a bustling European-style mini-city," according to a 1999 Star-Ledger story.

The problem: Imperatore, then a titan in the trucking industry, had very little experience in real estate development. He did go on to found the NY Waterway ferry service from Weehawken to Manhattan in 1986, which would ultimately become an anchor for Weehawken's development. But for years the land he owned remained empty. Meanwhile, Weehawken's mayor, Wally Lindsley, was convicted of trying to extort developers who planned to build chicken-processing and coal-handling plants along the waterfront -- leading to the state seizing control of the town's finances in 1982.

Arthur Imperatore, founder of New York Waterway, pictured in 2006. (Steve Hockstein/for the Star-Ledger)

"It was desolate," said Marsha Mancini, who grew up in Weehawken and eventually worked at an aviation center along the waterfront in the 1980s. "You could have killed somebody down there and no one would have ever found the body."

Enter Roseland Properties, founded by Marshall Tycher and Carl Goldberg. They bought the northern mile of Port Imperial (West New York, Guttenberg) in 1995, and then acquired the southern mile of Port Imperial -- 96 acres in Weehawken -- with plans for a mix of commercial and residential properties. (Roseland sold parcels in Weehawken to developers Lennar and Landsea Homes to help diversify the development.)

Corporations also saw opportunity in this "irreplaceable real estate" as Tycher described it then. In 1985, the Lincoln Harbor development, which is owned by Hartz Mountain Industries, became the headquarters for UBS, the Swiss global financial services company.

A tale of two cities

Yet the seeds of division were unintentionally being sown. Ben Goldman, who moved to Weehawken in the late 1990s, said it felt like people in town didn't comprehend the asset they had -- because the waterfront was never truly part of the community.

Along with other Weehawken residents, Goldman wanted to see the town's waterfront developed into a world-class destination. The Friends of the Weehawken Waterfront formed in hopes of working with the developers to maximize the waterfront by incorporating public parks and vertical access to upper Weehawken.

They hired renowned architect Craig Whitaker, who designed Hoboken's southern waterfront, to craft an alternate plan to the one Roseland and the town of Weehwaken were then proposing.

In short, it didn't work. The group filed a lawsuit in February 1999 against Mayor Richard Turner, the township, the Planning Board and the developers of a proposed waterfront development project, according to the Hudson Reporter. Their lawsuits and multiple appeals all failed.

"Our Community Plan envisioned a waterfront that would become a world-class destination," said Ciuffitelli. "(The current development) is designed to be the opposite of that, a private enclave."

Weehawken Mayor Richard Turner (middle) stands with developers from Landsea, who are building the luxury housing complex, Avora. (Cahn Communications)

Mayor Turner and the developers felt -- and continue to feel -- otherwise.

"We were able to craft a development that was satisfying to the vast majority of residents," Turner recently told NJ.com. (In 2015, Turner celebrated his 25th year as the town's Mayor. He's next up for reelection in 2018.) He noted that waterfront development has preserved the views from atop the Palisades, built public park space and provided parking.

"We have made Weehawken desirable in the last 30 years," he added.

A missed opportunity?

Yet compared to successfully redeveloped areas like Hoboken or downtown Jersey City -- with their mix of residential properties, restaurants and grocery stores -- modern-day Weehawken does indeed seem disjointed. Sure, there are a few restaurants sprinkled throughout the development, like Chart House, a high-end seafood chain that offers stunning views of Manhattan. A Whole Foods is coming, slated to open for the end of 2018. There is a concert series and other activities on the waterfront open to the public.

But walk around the mostly empty streets at night and the overwhelming feeling is one of a sleepy bedroom community -- a place people are resting their heads before heading into the big city for work in the morning. The current plan makes no real effort to connect the two parts.

If you live in upper Weehawken, you either have to drive to the waterfront, or walk down a 12-flight staircase, or wait for a public bus. Access from the Palisades to the waterfront is especially problematic for the elderly, disabled or parents with strollers.

During the planning process, residents bartering for better access -- like a funicular or elevator-- pointed to the fact that even in the early 1900s, the town had a wagon elevator to transport people from the waterfront to atop the Palisades and vice versa.

The master plan endorsed by Turner and the Planning Board was approved in 2001. Some of the projects had to be stalled because of the economic turmoil of the late '00s, but in the last five years building along the waterfront has hit a blazing stride.

It appears development is beginning to top out -- Mayor Turner claims the waterfront is about two-thirds complete. He also recently said the notion that the waterfront development is a separate community from the Weehawken above is an "asinine remark" and anyone who describes it that way "should be ashamed of themselves."

A view from RiverParc, located at 1300 at Port Imperial, in Weehawken. (Kathryn Brenzel | NJ Advance Media)

But while the mayor says the public parks along the waterfront -- and developments like RiverParc, a 10-story, 280-unit luxury apartment building that will open its gym and pool to township residents for a fee -- are reasons to celebrate the waterfront's connectivity to the upper part of town, it's difficult to ignore how developers and residents, old and new, discuss the waterfront.

"It's easier to get in and out of Manhattan than it is to get to the waterfront - even if there were a reason to go there," Mary Ciuffitelli said.

Nick and Eric Clearly, a musician and a Wall Street banker, moved into RiverParc from Harlem in 2015, said they rarely venture to the community above, calling it "two different worlds."

The couple said their social life is still spent in New York, and then they trek back on the 18-minute ferry ride to Weehawken to relax, walk the dog and sleep in a quiet community.

Why property value isn't always everything

One other, lesser noted effect of the Weehawken boom: Some longtime renters in the community are being forced to flee. Gabriel Agostini's family moved to Weehawken when he was 7. Now in his mid-20s, the Agostinis moved to Morristown in two years ago. The increase in rent was the "driving force," he said.

"For me, it was a huge hit," Agostini said. "This is my home. Having to leave Weehawken was a huge deal."

"Weehawken is not getting richer," he added. "People are just moving away."

For longtime home owners, the boom in development will also likely lead to increased taxes. The town had the highest average tax bill for the third straight year in Hudson County in 2016. But that average tax bill could soar even higher as the town awaits a tax revaluation, after a group of waterfront property owners sued the town to force a revaluation.

The group successfully argued that the failure to update assessments on older properties -- while assessing new ones, specifically the waterfront, at market value -- has created an unfair burden for owners on the waterfront.

Whether one welcomes the boom or detests it, though, there's no holding it back. And for all the frustrations of longtime city residents, there are probably worse fates than living in the hottest real estate market in New Jersey.

"It is shaking up the ground, but on the flip side, the value of their homes has doubled," said local realtor Sanderson. "It is all perspective."

Joe Atmonavage may be reached at jatmonavage@njadvancemedia.com. Follow him on Twitter @jatmonavageNJ. Find NJ.com on Facebook