At the time, Hoboken was starting its revival, though the spread of New York wealth and development across the Hudson was slow, said Max Herman, director of the urban studies program at New Jersey City University. “In the 1980s, Hoboken had fallen so low that people were setting buildings on fire for the insurance money,” he said. In the ’90s, professional New Yorkers saw opportunity in the inexpensive brownstones that remained in Hoboken, as well as its compact, neighborhood-like footprint. An established working-class Irish and Italian community in Hoboken offered “an already-existing infrastructure of bars and taverns,” Mr. Herman said.
By contrast, Jersey City was sprawling, covering an area almost the size of Manhattan. With its abandoned buildings, long-neglected waterfront and larger minority communities, it was seen as a rougher place and more risky for investment. What passed for night life in many neighborhoods took place in “social clubs” in peoples’ basements and backyards, where the membership rules skirted the licensing laws. According to Dr. Herman, artists slowly occupied the old buildings; cafes, bars and restaurants followed.
Mattias and Alice Gustafsson moved to the area in 1990 and opened their first restaurant, Madame Claude, in 2002. It sat alone on a corner far from public transportation, its charming yellow walls covered with framed photographs of French film stars of the ’50s and ’60s.
“There was nothing there,” Mr. Gustafsson said, “except the drug dealers around the corner. The streets were empty at 8 o’clock. On the first night we opened, we had our windows broken. But then we even created a friendship with the drug dealers. We learned their names. We earned their respect.”
The restaurant soon became a go-to date spot, serving moules-frites, crèpes and other classic French comfort food.
“Everything was word of mouth, and people started venturing out,” Mr. Gustafsson said. “They had a hard time finding us — the streets were all dark — then they saw our string of little fairy lights around the awning.”
Opening a restaurant or bar in New Jersey, rather than in New York, comes with its own challenges. Nowhere is this more evident than in New Jersey’s byzantine liquor laws, helpfully explained in an 85-page document on the state’s Division of Alcoholic Beverage Control website. These rules are the reason the honest strip-club owner must choose between hard liquor and full nudity.
Most important, the laws govern the sale and distribution of liquor licenses, which are pegged to the size of a municipality and must be purchased outright rather than leased, as they can be in New York.
The original Madame Claude had no liquor license but allowed customers to bring their own wine, the only economical course for such a small establishment.
“B.Y.O.B. was good for us as long as the rent was O.K.,” Mr. Gustafsson said. “But Jersey City has a lot more corporate than family restaurants because they have deeper pockets.”
Mr. Harrison, the real estate investor, agrees, pointing out that rising rents, combined with such a big start-up outlay for a license, can be crippling.
“The boom is unreal; the price per square foot has tripled,” said Mr. Harrison, who said he has lost over 20 real estate bids in this intensely competitive market. He explained that investors are buying buildings at high prices with low returns, which means that they are increasing rents significantly. This, in turn, is pushing out small-business owners.
The current boom has occurred under the watch of Jersey City’s dynamic young mayor, Steven Fulop, 40, who has encouraged large-scale development while simultaneously championing small businesses. According to the mayor, there are 10,000 new residential units under construction and another 17,000 approved. At the same time, he says, 650 new small businesses have opened within the past three years, many of them bars and restaurants.
The Gustafssons saw the change coming. When they were given an opportunity to open a larger space nearby, they leapt at the chance, closing down the first restaurant and finally purchasing a liquor license for $150,000. They opened Madame Claude Bis, a basement bar with high ceilings, brick walls, a round-the-corner speakeasy entrance, Gypsy jazz and a full menu of French wines.
The Golden Cicada’s genesis, on the other hand, was something of an accident. Driving past a for-sale sign, Mr. Tan called and bought the nearly burned-out building. Discovering that the purchase came with a liquor license, he found himself a bartender and kept at it.
“Having a liquor license in New Jersey is like owning an asset,” said Shen Pan, an owner and manager of the new Pet Shop, Jersey City’s first exclusively vegetarian bar and restaurant, the realized ambition of 10 local investor-friends who have all lived downtown for at least a decade.