Huh, the _JAVA_OPTIONS environment variable is set. If you're on Mac/Linux, try running export _JAVA_OPTIONS= in a terminal to get rid of that...
Oh sorry, I'm confising heap with permgen :P In that case, I'm honestly not sure. Try manually setting the -Xms (minimum) and -Xmx (maximum)...
Heap space? Sounds like you're using Java 7. Update to Java 8 and see how that goes.
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