In 1932, a group of Bayonne businessmen started working on a plan to build a port terminal off the east coast of Bayonne into New York Bay to create additional industrial space for the city. The plan was completed in 1939 and dredging and filling work on the man-made peninsula began the same year.

When the US military became involved in World War II, the Navy was looking for an east coast port location and was very interested in the site. In 1941, the Navy took over the peninsula from the City of Bayonne adding the largest dry-dock on the eastern seaboard, along with dockyards and storage facilities. Opening in 1942, Bayonne’s military base was operated by the Navy as a logistics and repair facility until 1967 when the Army assumed control of the property.

During its years of operation, the Military Ocean Terminal at Bayonne (MOTBY) was a vast naval supply center. Ships carried goods from the terminal for every major US military operation from World War II to the Persian Gulf and Haiti missions in the 1990's. At its peak, MOTBY employed about 3000 civilian and US armed services personnel and handled more than 1 million tons of cargo a year. With the end of the Cold War and decreased need for deploying US military forces, the federal government began closing down US military bases all over the world. In 1995, the Base Realignment and Closure Commission (BRAC) voted to close MOTBY despite strong opposition from local, state, and federal officials.

In 1996, the Army had 2500 employees at the base, many of which were civilians who lived in the area. These jobs were gradually phased out over the next 3 years. Some employees accepted transfers to other bases while others retired early.

On July 1, 1999 Colonel Charles Beck, commander at MOTBY since July 1996, turned the command over to Colonel William Black, the final commander of the base. At that time, there were only about 300 employees remaining.

The MOTBY flag was lowered for a final time during the closing ceremony on Sept. 23, 1999. All civilian jobs were eliminated by Sept. 30, 1999.

On April 25, 2002, MOTBY was officially renamed The Peninsula at Bayonne Harbor by the Bayonne Local Redevelopment Authority.