NJ Transit and Horizon Blue Cross announced plans to redevelop their Penn Plaza office building sites in to residential and corporate office towers.
Updated: Dec. 02, 2025, 6:18 p.m.The Penn Plaza east complex is home to NJ Transit's former headquarters and Horizon Blue Cross behind it. A joint proposal announced by both on Tuesday calls for redevelopment of the site with residential towers and a new headquarters for Horizon financed by redevelopment of this site.
Two longtime Newark office buildings that have housed NJ Transit and Horizon Blue Cross could be redeveloped with plans for a new residential tower rising up to 30 stories and a new headquarters for the insurer. NJ Transit and Horizon, which share the Penn Plaza East complex next to Newark Penn Station, announced Tuesday that they’ve begun the process of redeveloping the nearly 4-acre site on Raymond Boulevard.under the agency’s plan to earn revenueWhile exact proposals will come from developers, concepts for the Penn Plaza East complex envision a premier mixed-use development including a new up-to-1,000 unit residential complex at 1 and 3 Penn Plaza East that could reach 30 stories. The project also would include developer-funded construction of a new single-tenant 250,000-square-foot Class A building for Horizon’s new corporate headquarters in Newark. That headquarters would be built by the developer of the Penn Plaza site. Nonprofit Horizon employs over 5,000 people in its Three Penn Plaza headquarters. “An essential element of this plan is a new headquarters to be built and financed by the developer that allows Horizon to remain in Newark and continue to serve our members in the most financially responsible way possible,” said Doug Falduto, Horizon’s Vice President Administration and Chief Security Officer.to offices at 2 Gateway Center in Newark, leased for $500 million for 25 years in a deal that sparked controversy. The announcement answers the future use for NJ Transit’s former headquarters building which is now 34 years old.That plan details opportunities to earn non-fare revenue from 8,000 acres of NJ Transit-owned real estate and could produce between $1.2 billion and $1.9 billion in revenue for NJ Transit’s operations over 30 years. “The redevelopment of our former headquarters property is a key step in advancing our real estate strategy and our commitment to unlocking new value from our assets,” said Kris Kolluri, NJ Transit CEO, in a statement.“The development proposals will be assessed on a set of criteria that will include financial rewards to Horizon and Transit, but other important factors such as the capability of the developer, feasibility of proposal, and the impact on the community will also be considered, said Jim Smith, a NJ Transit spokesperson. “Local market demand suggests a future development that is primarily residential with some mixed-use,” Smith said. “We expect the developers to propose how best to achieve this on the site, based on a technical understanding of the asset to be shared in the Information Session.” For the city, redevelopment means additional tax revenue from the NJ Transit headquarters site. Mayor Ras Baraka said the city “embraces this collaboration with full support for the broader public private partnership that it represents.” “Penn Plaza East’s multifaceted, future-facing redevelopment will be a crowning jewel in Newark’s continuing ascent toward next-level vibrancy and prosperity,” Baraka said in a statement. “Their investment will create new spaces for living, working and recreation, enliven our downtown, enhance our riverfront, and attract residents eager to benefit from the most extensive tri-state rail network in the nation. The redevelopment is far from a done deal. The first phase is exploratory to gauge interest from developers in the Penn Plaza site, officials said. Potential developers must register their interest by December 31. “Depending on interest the next step would be a Request for Proposals process and the timeline and logistics would be based on the negotiated outcome of that process,” Smith said. “If there is sufficient interest expressed in this exploratory phase, a formal RFP will be issued, and it will be up to interested developers responding to the RFP to identify the site in Newark they would propose for any future Horizon HQ.” said Thomas Wilson, a Horizon spokesperson. The Penn Plaza site has several advantages: proximity to trains, buses and light rail at Newark Penn Station and its location on Raymond Boulevard and along the Passaic River.also mentions the commanding views of New York City from the site, especially if plans to build 30-story residential come to fruition. The site is located in the Newark River Redevelopment Plan and is zoned to allow future construction of up to 30 stories. Both the redevelopment and office building sites will require approvals from Newark and need to satisfy other regulatory requirements. The potential project anticipates using the New Jersey Economic Development Authority’s ASPIRE Transformative Project program, a tax-credit incentive designed to close financing gaps for large-scale, mixed-use projects that provide long-term urban revitalization. NJ Transit began the relocation process in early 2023. The agency moved from its owned headquarters at 1 Penn Plaza to leased space at nearby 2 Gateway Center. The deal to move to the new headquarters was criticized for keeping details from members of the board of directors until they were asked to vote on it in Feb. 2023. Among the criticisms were that other less costly proposals weren’t considered. That prompted then board Vice-Chairman Cedric Fulton to resign two days before the board ultimately voted. Fulton is now on Gov.-elect Mikie Sherrill’s transportation transition team. NJ Transit officials argued it would be too costly to retrofit the former building. Agency documents identified $118 million in rehabilitation work needed at the then 32-year-old building.that could have reached a budget gap of $957 million by mid-2026.for eight floors at 2 Gateway Center, a deal questioned and criticized by some state lawmakers because it bypassed two lower-priced options.
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