February 13, 2023

Update from Mayor Bhalla on the transformation of Union Dry Dock into a public park and an FAQ

Below is an update from Mayor Ravi S. Bhalla on the progress of transforming Union Dry Dock into Maritime Park, and frequently asked questions regarding the process:

Dear Neighbor,

We have been working very hard to acquire the site known as Union Dry Dock for the purpose of developing a world-class waterfront park for Hoboken residents and visitors to enjoy for generations to come. As Mayor, connecting this final piece of the waterfront has been among my highest priorities, and I am doing everything possible to move this process forward, balancing all legitimate interests to reach the best result for our community.

In this journey there are many legitimate interests, not all of which align perfectly, which requires a thoughtful approach, patience, and flexibility. However, through this process, my primary interests are (a) municipal acquisition of real estate; (b) for the purpose of a public park to connect the waterfront; (c) at a price that is predictable and amicably negotiated. I am happy to say that through years of negotiations, we are achieving all three of these primary objectives.

There is some understandable lack of clarity among residents regarding the acquisition of this property, and the short-term lease we negotiated with the former owner, New York Waterway (NYWW), in order for them to continue mass transit ferry operations while they develop an upgraded facility outside of Hoboken. The purpose of the Q&A below is to address some questions residents have asked me in person or via email regarding this complex transaction. I hope this information is helpful to you and brings additional transparency to the process. I am grateful to all of the residents who are asking these questions and ensuring accountability and transparency from my Administration; particularly given the historic victory this acquisition brings to the City of Hoboken.

Why is New York Waterway only paying $4,573.00 per month for a lease?

To put it simply, our primary objective is not to generate revenue on a short-term lease. Our primary objective, stated above, is to acquire this property for the purpose of a public park at a negotiated and “locked-in” price. Secondarily, we recognize, appreciate, and value the legitimate interest of the State of New Jersey and NYWW to continue operating a viable ferry service in furtherance of mass transit in the region. With a growing population, and a ferry fleet that needs to be expanded in order to continue serving the region, the current plans NYWW has to expand its ferry infrastructure (at a site outside of Hoboken) are critical to NYWW’s long-term viability.

In the course of negotiations, we kept our eye on the ball, which was acquiring the park, not money on a short-term lease. It was here that we were willing to concede and cooperate with NYWW by requiring them to cover the cost of what NYWW has been paying in taxes during their short-term operations in Hoboken.

At the other end of the negotiating table, we viewed NYWW’s agreement to not tie the lease term to approvals to build their new location outside of Hoboken (of which we had no control) was far more important to developing a park expeditiously, than any concession on the price of the lease (see below).

What if New York Waterway isn’t able to expand its ferry operations at an alternative location outside of Hoboken?

As Mayor, I was not willing to accept a lease that would require an alternative ferry location, outside Hoboken, to have upgrades/an expansion completed before NYWW were to vacate Union Dry Dock. Needless to say, it would be unacceptable for Hoboken to be held hostage to any delays outside of our control, that could have potentially lasted upwards of a decade (or more). That’s why the primary conditions of the lease include approvals for NYWW’s temporary uses in Hoboken at Union Dry Dock, which include Hoboken zoning and building permits, as well as the US Army Corps of Engineers and the New Jersey Department of Environmental Protection permits, all of which we are fully confident will be issued. NYWW has the ability to request an additional two years on top of the initial three-year lease, if and only if the expansion at an alternative location outside of Hoboken were not yet completed. This would be a maximum of two additional years, if needed. If these two additional years were warranted and requested by NYWW, even if the expansion at the conclusion of the additional two years was not completed, NYWW would be required to vacate Union Dry Dock at the end of two years (and a total of five) no matter the circumstance, a hard line that we insisted on that incentivizes NYWW to complete their expansion elsewhere on a timely basis.

Why wasn’t Hoboken Terminal considered?

While my administration did initially suggest Hoboken Terminal several years ago for ferry operations as a compromise solution, ultimately, both the State and NYWW do not believe it to be a feasible location and have repeatedly communicated that to my office. This, to me, is no longer an option. The development of NYWW’s operations at a singular location, outside of Hoboken, was a policy decision made by the Governor’s office and communicated to me directly. In short, Hoboken is “off the table” for NYWW’s expansion, a major victory for our residents.

If a new Governor comes into power, couldn’t NJ Transit exercise eminent domain over Union Dry Dock?

Technically, the State could attempt to condemn any property in Hoboken, Hudson County, or New Jersey for a public purpose. However, given the history established by residents: a grassroots-driven movement for a public park at Union Dry Dock, I believe it to be highly unlikely a State level land grab would even be contemplated, much less succeed at the Union Dry Dock property. Through years of advocacy, Hoboken residents have made their voices heard loud and clear, and your efforts are bearing fruit both now as well as protecting our waterfront in the future.

Moreover, as a practical matter, the fact that Hoboken will likely have broken ground on the creation of a public park before a new Governor even takes office would make future condemnation unrealistic as a practical matter. Given these facts on the ground, our attorneys believe that even if this remote, theoretical possibility were to occur, Hoboken would have a strong legal case to oppose the State’s takeover given the new use of the site for a park, as opposed to before when the land sat unoccupied and without any public purpose.

Put simply, this possibility falls in the same far flung chance NJ Transit would condemn Pier A or another park along our waterfront for an industrial purpose.

Doesn’t Hoboken have access to the land? Why don’t we just build a park as soon as possible and forget any other uses of the site?

The City of Hoboken officially has title to the land and has acquired the property, as we filed a Declaration of Taking with the Hudson County Registrar, pursuant to a Hudson County judge’s order, and deposited the appraised value of the land ($13.36 million) with the court. Given this, other than a temporary Stay automatically in effect until a judge determines the condemnation action was validly filed, I believe we certainly do have the ability to utilize the site as we see fit, and begin building out a park as soon as a design has been completed.

Importantly, given the substantially improved relationship between my administration and New York Waterway over the past two years, we were able to come to an agreement of an acquisition price of $18.5 million, which is roughly the middle of our appraised value of the land, and New York Waterway’s claimed value of the land. As you may recall from reading above, (a) acquisition of real estate (b) at a price certain, were two of our three overarching objectives.

However, if we didn’t negotiate, if we were not flexible, we would be putting our primary objectives at risk. Specifically, if Hoboken were to continue the route of an adversarial condemnation of the property, which we could pursue, NYWW would challenge our legal authority to have acquired the land through eminent domain, seeking to have the property returned to them. In fact, NYWW filed such a challenge in court, although that was merely to preserve their right to defend the property while the City and NYWW teams negotiated the settlement described elsewhere in this letter. While I believe it to be a highly remote chance that NYWW would succeed on the merits of such a challenge, in the outside chance they prevailed, then essentially everything would be lost - a risk, albeit a small one, I am not willing to take.

Another risk avoided through amicable settlement is the ultimate price we would pay for the property. If we proceed with contested eminent domain litigation, a court of law would ultimately provide the final acquisition cost, which could be above the $18.5 million we amicably negotiated. For me, obtaining certainty on the price of the land is a more fiscally prudent approach than “rolling the dice” and leaving it in the hands of a court, which could very well have an adverse impact on taxpayers who would have to front the bill. Risk avoidance and predictability, for both sides, prevailed through these negotiations.

Is the property at risk of current condemnation by the State and the Murphy administration, which could then provide the land to New York Waterway?

In short, the answer is no. Governor Murphy and his staff have been extremely helpful and cooperative and have strongly supported Hoboken’s position that Union Dry Dock should become nothing other than a public waterfront park. They have given their commitment that they will not condemn the property, which I greatly appreciate. The State is also supporting New York Waterways’ efforts to expand ferry operations at alternative locations. It would seem much more likely that, if necessary, the State would pursue condemnation in a different municipality.

Does New York Waterway want to utilize Union Dry Dock permanently?

New York Waterways’ sole goal, in my direct and honest conversations with them over the past two years, is to now expand their ferry operations at a location other than Union Dry Dock, outside of Hoboken. NYWW views the temporary use of Union Dry Dock as a stopgap measure in their efforts to expand and improve ferry operations. I strongly believe, and take NYWW at their word, that they want to and will leave Hoboken as expeditiously as possible, and earlier than the terms of their lease if their alternative facilities are expeditiously approved and built. However, as stated above, NYWW must vacate Union Dry Dock after three years, or no more than five years, if they request an extension, regardless of whether the alternative sites and facilities are ready. Hoboken’s lease with NYWW is not contingent in any way, shape, or form on the alternative locations being approved or built, an extremely important consideration that I insisted, and NYWW agreed to, in our cooperative discussions.

Can we prevent New York Waterway from refueling at all on Union Dry Dock?

A critical sticking point for Hoboken was that refueling must only be a last resort, or during emergencies, and not a regular use. NYWW already conducts refueling at an alternative location, outside of Hoboken, which they plan to continue utilizing on a regular basis. The only time that NYWW requested refueling at Union Dry Dock is when their refueling operations are likely to be temporarily postponed for a short period of time at their alternative site during the transition to new fueling infrastructure – a request I felt was reasonable and we should accommodate. Additionally, we required in the lease for all temporary refueling, during this short period of time, to take place on land as opposed to through the water, unless in the case of an emergency or an unforeseen circumstance.

The primary functions at the Union Dry Dock site will be for maintenance and repair operations of their ferries.

There are a lot of recreational activities, including boating, paddle boarding, and more, that take place in the Hudson River. Will that be negatively impacted?

The lease makes every effort possible to minimize the impacts and ensure safety for recreational users of the Hudson River, treasured activities that I fully agree must be protected. NYWW will be moving ferries off of Union Dry Dock before 6 a.m., and bringing ferries back to the site after 10 p.m. In addition, NYWW is agreeing to follow all current rules and regulations designed to protect individuals and other boats in the Hudson River, which we plan to continually monitor and help regulate. NYWW has agreed to regular meetings with Hoboken, which we plan to utilize in part to ensure the ferries are not adversely impacting other users. If NYWW violates these regulations, or any other regulations in the lease, Hoboken has the legal authority to cancel the lease. As a result of this risk, we believe NYWW will be compelled to comply with all current rules and regulations regarding safety protocols.

Will temporarily leasing the site for ferry operations to New York Waterway delay the creation of a park at Union Dry Dock?

Over the next year and a half, Hoboken will conduct a thorough public process to determine the amenities of the Union Dry Dock site, with residents driving this process. Our goal is to break ground on the first phase of the park in 2025 on the 2/3 of the site that are not leased by NYWW. We plan to construct the park in phases, where 2/3 of the park could be built out in the period of time after the groundbreaking, and finish the construction of the other 1/3 of the park after NYWW’s lease has been completed, or they vacate the land.

What happens if New York Waterway is not able to utilize Union Dry Dock?

If NYWW is not able to utilize Union Dry Dock, it has represented to the City that their ability to expand elsewhere would be severely jeopardized, and that their operations may not be viable in the long run, and they could go out of business. I believe it would be irresponsible as Mayor to ignore this very real risk and refuse to support NYWW, now that they are working cooperatively with the City. A short period of inconvenience to ensure our transit system is supported and expanded, especially given the large number of ferry commuters each day from Hoboken, is a small price to pay for Hoboken to have both a waterfront park and a stronger transit system in the long run.

Why wasn’t anyone else at the negotiating table for the lease with NYWW?

In Hoboken’s form of government, the Office of the Mayor is responsible for negotiating leases and contracts, and for the City Council to authorize me to execute those agreements. While I respect various advocacy organizations for helping fight for Union Dry Dock to remain public, open space, and we wouldn’t be where we are without their support, I believe it would have severely hindered our ability to successfully achieve our primary objectives had others been simultaneously negotiating terms. As a lawyer, I know that a good settlement is one where neither side is fully happy – which is the case here with NYWW wanting more provisions in the lease to support their transit operations, and residents that want a public park built as soon as humanly possible. I respect and value both sides of this issue, and ultimately, the compromise in the form of the lease, is the best outcome from a highly complex challenge.

I hope this information has been helpful to you. Again, I am grateful for your support and for standing by my side in making history, together as a unified community, to accomplish something we can be proud of in the years to come.


Ravi S. Bhalla