T he process by which the city chose a developer for the sprawling 14-acre Jersey City Medical Center site was locally unprecedented.
Never before has the city – or any other New Jersey community, for that matter – staged a developers’ exposition to inform the community about who the major players were. Never before has the Jersey City Redevelopment Agency [JCRA] attempted to accommodate residents’ concerns to the extent it did with the Jersey City Medical Center [JCMC].
But when the JCRA board unanimously selected Manhattan-based Metrovest Equities as the designated developer in a special meeting at City Hall Monday night, community activists and developers alike walked away from council chambers both angry and disillusioned.
They argued that the process was a farcical attempt at making the designation seem legitimate when the city had already decided long ago who would be chosen. Their suspicions were further fueled when the board ignored another developer’s last-minute offer of $17 million for the property – a price estimated to be almost three times the amount Metrovest said it would pay.
JCRA Board Chairman Steve Lipski, however, insists the process was a fair and legal one.
"The [JCRA] has been out there, putting out concrete criteria, having meetings [with developers] and meeting with the community," said Lipski, who is also the Ward C councilman. "And at the end of the day, only three people have a problem. What I say is, ‘Dig out a dozen people who are discontent with the process and the product.’ That’s my challenge."
Lipski added, "Put up or shut up. I’m sick and tired of these generalizations."
A lack of detail and specificity, however, is precisely what disgruntled participants say their main point of contention is. They said they want to know, in concrete detail, what criteria led the JCRA to select Metrovest Equities over other development teams with more imaginative community-sensitive plans.
Start of the race
The race to choose a developer began in late June when a community group organized by city residents Charlene Burke, former Ward F Councilwoman Melissa Holloway and Wayne Anderson convened a meeting at the St. Demetrios Greek Orthodox Church to discuss prospective city plans and the community’s wish-list for the complex.
At that June 24 meeting, Metrovest’s George Filopolous presented his preliminary architectural renderings and building elevations for the Bergen Hill site, which focused on the creation of "affordable luxury" loft-style housing and the introduction of retail, professional and public space. Community members said that although they felt Filopolous was on the right track, they wished for more imaginative re-use concepts that did full justice to the size and importance of the historic site.
They urged city management to both open up and enroll the community into the developer designation process, and the group’s next community meeting, which took place on July 10, was attended by a range of interested parties, including officials like Mayor Glenn D. Cunningham and City Council members as well as city employees in the city’s department of Housing, Economic Development and Commerce.
Other interested developers also attended, but Filopolous was the only interested developer to speak. Filopolous, who had been interested in the JCMC project ever since he came to Jersey City in 2001 to redevelop Downtown’s Metropolis Towers, had previously worked with the JCRA in securing floor plans and performing the requisite environmental due diligence for the designation.
After the community pressed that the process be open to more developers, the JCRA advertised in July a public Request for Qualifications [RFQ], which called for interested parties to show their financial capabilities through responding to a "developers’ questionnaire" along with a $5,000 filing fee.
At the deadline, which community activists complained was unreasonably close to the date the RFQs were solicited, five new development teams joined Metrovest in the race: the Florham Park-based Kushner Companies, Philadelphia-based Pennrose Properties, East Brunswick-based JCMC Redevelopment Associates, Oklahoma-based STET, LLC, and Hewlitt, N.Y.-based ASET, Inc.
A developers’ exposition was scheduled for the weekend after Labor Day, and interested developers set out to work on their presentations. Various persons associated with the development teams, who wished to remain anonymous, complained about JCRA unresponsiveness during their preparations and made allegations that the JCRA shared their ideas with other developers, thereby decreasing their competitive edge. Lipski, who was elected the board chairman in July, insists each team was treated fairly.
As the date of the developers’ expo approached, the Kushner Companies lost interest and a new team, the New York-based Chetrit Group, secured prominent local attorney Rev. Francis Schiller as counsel and signed on to the race.
Med Center extravaganza
At the Sept. 8 developers’ expo, approximately 100 city residents showed up to preview the plans and listen to developers’ presentations, which revolved mainly around three issues: experience in renovating historic structures, commitment to community integration and, most importantly, financial capability. Projected project costs ranged from $150 million to $600 million, with Metrovest’s cost expectations hovering at the lower end. Other developers spoke of partnerships with local educational institutions, the creation of a hotel and convention center, and the re-introduction of streetcar lines linking the complex to Journal Square and Downtown.
As the expo wound down, Lipski said the next step was JCRA staff measuring each presentation against a list of financial, contractual and design criteria in the two weeks following the presentations. JCRA executive director Suzanne Mack said the 13 assessment criteria used by JCRA staff included but was not limited to: financial ability to do the project; past financial dealings; provision of open space within the plan; ability to work within a master plan; past management of projects; experience in large scale historic, urban and rehabilitation projects; sensitivity to community concerns; ability to link the project to the surrounding neighborhoods; recognition of the historic aspects of the site; and the ability to maintain the project.
After making the assessments, JCRA staff would then make recommendations to the board at its regular Sept. 16 meeting on which developer to select. The public was invited to attend.
A bang, then a whimper
The designation, however, never made it onto the JCRA board’s Sept. 16 agenda. When the board went into executive session, community members said they were worried the decision would be made behind closed doors. Some city residents present at the meeting were also prohibited by police from entering the meeting because of occupancy limits, a move they said aggravated their fears.
The board instead announced they would make the decision in a special meeting the following Monday, Sept. 22.
In the meantime, JCRA staff had narrowed down the group of six to two development teams, Metrovest and the Chetrit Group.
"My understanding was that there were two developers that produced the documents that showed they could do the project," Lipski said Thursday. "After that, and all things being equal in terms of experience and credibility, it was [Metrovest who worked most with] the community."
After having arrived at their decision to choose Metrovest, the JCRA’s seven-member board was then thrown a curveball when representatives of the Chetrit Group arrived at City Hall Monday evening, during their meeting, with copies of a letter saying they were prepared to immediately remit payment of $17 million to the JCRA in exchange for all 12 buildings on the site, three of which are owned by the county.
Board commissioners said that it was too late in the process to consider the offer. City residents present at the meeting, however, balked at the board’s refusal to factor Chetrit’s bombshell offer, saying the amount the city receives in exchange for the property should be one of the strongest determining factors in the decision.
Lipski, however, said Chetrit’s actions were offensive to commissioners and insulting to the JCRA’s commitment to the designation process.
"This is not a bidding war," Lipski said Thursday. "[Through that letter, Chetrit members showed they] weren’t interested in the process and that they were bidding… If we wanted to go to a bidding war, we would’ve gone to auction and not have done what we did."
Community members, standing deflated and upset outside City Hall Monday, said the decision was poorly made and based on insufficient criteria, as if it was an uninspired purchase at an ice cream shop.
"Metrovest is like vanilla," said one McGinley Square merchant who wished to remain anonymous. "[George] Filopolous’ proposal was like vanilla all along, and when the other developers came in, we started to think that we might be able to get a banana split. And with this $17 million, we were given the chance to even get a cherry on top. But instead, they chose vanilla."
Assessing the fallout
According to state redevelopment law the JCRA is allowed to make whatever decision it deems most beneficial without being constrained by specifics in criteria.
"[JCRA commissioners] can do whatever they think is reasonable," said Charles Liebling, a redevelopment law attorney, with the New Brunswick-based firm of Windels, Marx, Lane and Mittendorf, LLP, not affiliated with the JCMC project.
"That’s the discretion the government has, to make findings and come to decisions based on them. If their decisions aren’t deemed arbitrary, unreasonable and capricious, they’re valid."
If an interested party was to contest a redevelopment agency’s decision, a judge would have to determine in court if there was any legitimate basis for that decision. This would be done by reviewing the record and the redevelopment agency’s findings in support of their decision, Liebling said.
"If the judge could find a legitimate basis, and that [the decision] was not arbitrary, unreasonable and capricious, she will not act as a substitute governmental body," he added.
In addition, the state’s redevelopment law does not require a redevelopment agency to take in community input in making a developer designation.
"The JCRA was not obligated to do what they did [with the developers’ expo]," Liebling said. "Fair market value is not a constraint, and they can sell it to a developer for a dollar if they wanted. Assuming they have the public interest at heart, they are expressly by statute not obligated."
One representative of a development team, who wished to remain anonymous, said that her team was asked to consider joining another developer in filing suit against the JCRA, alleging lack of due process.
Lipski defended the JCRA’s actions, saying its management of the designation process was above-board.
"We can show how the staff evaluated it," Lipski said. "At the end of the day, we did everything that statute requires. [The vote] was 7-0. We did an RFQ. [Filopolous] didn’t need that. He had worked with [former JCRA board chairman and current board commissioner E. Junior] Maldonado for over a year and he came into the picture and said he was interested. He went into the community and felt their pulse out."
"[Developers questioning our decision] is sour grapes and poor sportsmanship," Lipski added. "That would be sort of like the argument in George Orwell’s Animal Farm, where the pig says we’re all created equal but some of us are more equal than others. We are on public record. If they want to have an inquiry… At the end of the day, we are quite certain the JCRA and the city of Jersey City will be standing pure and the people in Jersey City will be proud of what we’ve done."
But community members aren’t so proud.
"Here’s the kick, and this is where Jersey City will lose in the long run," Burke said Thursday. "In the development community, there are rumors that serve as communication. And when these developers came to Jersey City thinking they were on an even playing field and then left angry, they’re going to tell others in the development community about their experiences here. They’ll think, ‘Is it all going to be the art of the deal?’ or ‘Is it going to be about the best project?’ That’s the concern."
"The repercussions in that regard, that’s what will hurt us in the long run," she added. "Even if Filopolous does the medical center and it’s mediocre and not stellar, it’s not going to really hurt us. But what will hurt us is when the development world gets wind of how Jersey City treats its developers and how we do the job."