As former shipyards across the country reinvent themselves, the site in Kearny, N.J., is being made over as a mixed-use industrial park, called Kearny Point, that favors startups making products like bath oils, piñatas and chocolates.
KEARNY, N.J. — Though small, Kearny has played an aircraft-carrier-size role in naval history.
Numerous warships set sail from Federal Shipbuilding and Dry Dock here on the Hackensack River. And after tours in areas such as the South Pacific and Korea, famous vessels were sliced up and sold as scrap here, too.
Now, the facility is embarking on a new mission. As former shipyards across the country reinvent themselves, the site in Kearny is being made over as a mixed-use industrial park, called Kearny Point, that favors startups making products like bath oils, piñatas and chocolates.
“We had a decision to make,” said Wendy Kelman Neu, chief executive of Hugo Neu Corp., the landlord, referring to the time after Hurricane Sandy swept through in 2012. “What should we do with the site? What could we do that would be transformative?”
The storm significantly damaged the property, which then housed the types of businesses one might associate with a gritty industrial parcel in a remote corner of the Meadowlands: a trucking company, an electrical-inspection firm and a nut importer.
Adding smaller-scale offices and workshops, plus stores, a food hall and public parks — and better flood protections — was a bet made with an eye on the modern economy, Neu said. A decline in the electronics-recycling industry, a previous Hugo Neu business, was also a factor, company executives said.
Hugo Neu started its $1 billion, seven-year project in 2014. Through a combination of razing some crumbling structures and renovating others, the company hopes to eventually remake its entire 130-acre property.
The initial step was gutting a four-story, 1930s warehouse and renovating it as an office building by polishing its concrete floors, installing a stylish ground-floor bistro and creating a roof deck with Manhattan views. The family-owned Hugo Neu tapped its own reserves for the $30 million renovation, said Steve Nislick, the company’s chief financial officer.
Today, the 160,000-square-foot structure, called Building 78, is home to about 175 companies with berths from 120 square feet to 12,000 square feet, Nislick said.
Rents at the building, which is 95 percent leased, range from $14 to $25 a square foot, steeper than rates for comparable real estate in nearby Newark but below the average in Brooklyn. Tenants at Building 78, including several manufacturers, can opt for leases as short as six months, somewhat unusual in commercial real estate.
Companies have flexibility to expand as they grow, said Alak Vasa, founder of Elements Truffles, a startup in Building 78 with eight workers. They make chocolate bars, some flavored with cardamom and lavender, and cranked out as many as 1,000 a day around Christmas.
Started in Jersey City in 2015, when the company used a deli’s kitchen after hours to make its desserts, Element Truffles moved to a 400-square-foot room in Kearny in March 2016.
Three months later, the company traded up to an 800-square-foot space, said Vasa, who added that landlords elsewhere had wanted inflexible 10-year leases.
“You don’t want to make a big investment in real estate and stress about it,” Vasa said, “but grow as the business grows.”
Despite its infusion of small entrepreneurs, Kearny Point is not showing its larger tenants the door.
“We want a mix,” Nislick said. “Small tenants bring more energy.”
Hugo Neu picked up the $26 million tab for the second major project at Kearny Point, Building 197, a 197,000-square-foot development to open next year.
Nislick said he was also talking to lenders about helping pay for the repurposing of a third site, a towering 150,000-square-foot column-lined structure where ship boilers were made, with a ceiling 62-feet high.
As housing nibbles away at manufacturing zones and the military has less demand for an armada, former naval facilities have become targets for redevelopment, though they are sometimes in out-of-the-way spots.
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For instance, the Brooklyn Navy Yard, one of six federal yards established around the end of the 18th century to fortify a national navy, has become a popular industrial park. The 300-acre site, now owned by the city after closing in 1966, offers a mix of tenants akin to Kearny Point: a whiskey distiller, a glass engraver and a furniture-maker, but also a cement company and traditional dry docks, where tugboats are repaired.
Once employing about 70,000, the yard has about 7,000 workers today.
Philadelphia’s Navy Yard, a 1,200-acre former base that closed in the mid-1990s, is home to 165 companies — most of them with big footprints — that employ more than 13,500 people, a spokeswoman said. The Navy retains 200 acres for storage and maintenance of old ships, like the aircraft carrier USS John F. Kennedy, as well as research.
In the Charlestown section of Boston, another yard was redeveloped to provide a home for the MGH Institute of Health Professions, a graduate school founded by Massachusetts General Hospital, as well as a section of a national park.
Three other federally owned naval yards — in Kittery, Maine; Portsmouth, Virginia; and Washington — have more traditional maritime uses.
“One of the great things about the redevelopment of the Navy yards is that there’s been so much preservation of the historic character,” said Andrew Gustafson, who has led tours of the Brooklyn Navy Yard since 2010. “The history’s a selling point. It makes the place unique and attractive.”