Council hears settlement to transfer Sixth Street embankment parcels, allow Block 1 development

City officials presented a settlement agreement and related ordinances that, if approved, would transfer most of the Sixth Street embankment parcels to Jersey City ownership and allow limited residential development on Block 1 under the existing zoning rules.

City staff said the package before the council includes three linked items: a settlement agreement, a pilot application for the Block 1 development site, and an amendment to the inclusionary zoning ordinance. The administration asked the council to carry the related ordinances so they can be heard together at a November 12 second-reading hearing.

The settlement would transfer Blocks 2 through 8 to the city as publicly owned land while allowing Block 1 to be developed under the zoning in place since 2012. Under the agreement the owner may convert 200 hotel units to residential and the developer must provide 15% affordable housing on those converted units. City staff said the project will include a continuous 30-foot public walkway along the embankment, a grand stair and elevator, public restrooms on Block 1, a bridge connecting Block 1 to Block 2 and a rebuilt Roberto Clemente ballfield with improved drainage.

City counsel explained the transfer is contingent on settlement conditions, termination of pending litigation and federal Surface Transportation Board actions related to abandonment by the rail owner. The mechanism described by counsel would trigger transfer of title to Blocks 2–8 on the sooner of the closing on Block 1 or five years after satisfaction of the settlement conditions and completion of the STB/abandonment steps.

NW Financial presented a preliminary financial review of the pilot. NW said the project produces an internal rate of return in the mid-to-high single digits under the settlement structure, and estimated roughly $40 million in public benefits and about 30 affordable units arising from the package. The consultant also said the pilot would generate an estimated initial stabilized benefit to the city and larger tax revenues over the pilot term.

Developer representatives described community outreach efforts, including petitions and public meetings, and said they will build parks, playgrounds and commit to local hiring plans. One presenter described the settlement as the result of “hundreds of hours of discussion” and said, “This truly is a historic day.”

Council members were told the package resolves roughly two decades of litigation that involved multiple court cases and STB filings. Staff warned that the agreements and ordinances must be coordinated — the settlement, pilot, redevelopment agreement and planning approvals must all align for the transfer and public improvements to occur.

Next steps outlined to the council include carrying the ordinances to a single November 12 second-reading meeting, Planning Board review of site plans, and negotiation of a redevelopment agreement that will set details and timelines.