NJ Transit Signs 25-Year Lease For New Headquarters In Newark

NEWARK, NJ — NJ Transit has signed a lease for a new corporate headquarters building in Newark, administrators recently announced. But the move is raising questions among some pundits, who question its timing and efficiency, reports say.

Earlier this month, the agency announced that it signed a 25-year lease for offices at Two Gateway Center, including about 407,000 square feet of space in open floor plates, which will be “built to suit.”

According to NJ Transit, its current headquarters at Penn Plaza East is more than 30 years old and would require nearly $120 million in repairs and renovations over the next six years, including complete overhauls and replacements to elevators and the HVAC and other systems. The repairs and reconstruction would take several years, and require temporarily relocating employees, which would “significantly disrupt the work environment, productivity and the efficient management” of the entire system, which is the third-largest in the country.

“Two Gateway has just been newly renovated, and the lease allows the potential to expand or contract NJ Transit’s footprint as needed,” the agency said in a news release earlier this month.

Two Gateway Center also provides direct access via the Gateway Center’s pedestrian bridge to one of the state’s busiest transportation hubs, Newark Penn Station, which is undergoing more than $190 million in renovations.

• See Related: New Jersey Will Spend $190M To Renovate Newark Penn Station

Onyx Equities, the owner of Two Gateway, has agreed to provide $130 per square foot toward design and construction – currently valued at approximately $53 million, NJ Transit said.

“We are grateful to be participating the renaissance of the City of Newark, and providing a home to the next generation of NJ Transit employees,” Onyx spokespeople said, adding that the first NJ Transit employees are expected to arrive at the space by early 2024.

The fate of the current Penn Plaza facility is still undetermined, NJ Transit said.

A copy of the lease can be viewed online here. Its signing came after a “competitive procurement process,” the unanimous approval of the NJ Transit board of directors, and authorization to proceed from the Office of the State Comptroller, the agency said.

“NJ Transit has always been committed to keeping our presence in Newark, the city which has been our home since our creation more than 40 years ago,” president and CEO Kevin Corbett said.

“NJ Transit has now negotiated a lease agreement that provides the best value for New Jersey’s taxpayers, for our customers and our employees,” Corbett added.

However, the decision has raised concerns among some pundits, who are questioning if it was a good move for an agency that is facing a budget gap of nearly $1 billion over the next two years, reports say.

As first reported by NorthJersey.com, NJ Transit rejected a less costly option at the nearby Panasonic building, located at 2 Riverfront Plaza, which would have been about $20 million cheaper over a 20-year lease than the Gateway option.

Citing unnamed sources who have knowledge of the bidding process and new lease, NorthJersey.com reported that the owners of two other buildings also responded to a request for bids: the old PSE&G building at 80 Park Plaza, and the Horizon building next door to NJ Transit’s current headquarters at 3 Penn Plaza East.

Onyx Equities is co-owned by “politically connected donors” of Gov. Phil Murphy, the report states.

Republican lawmakers have since called for hearings on the lease decision and for more transparency in the process, NJ Spotlight News reported.

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