When Larry Wainstein purchased Tonnelle Liquors in the K-Mart Tonnelle Avenue shopping center in North Bergen in 1999, he set out to establish a business that would flourish for the rest of his life.
The Union City businessman, who is also the vice chairman of the Union City Urban Enterprise Zone, bought the store and the liquor license from John Stalknecht, who is an aide for Commissioner Frank Gargiulo in the Department of Public Works.
But there was one thing he didn’t know.
“I was never made aware of a proposal for redevelopment at the site,” Wainstein charged. “I never knew anything about it. No one ever told me. The business was sold to me in bad faith.”
Around the same time that Wainstein was purchasing his business, the township of North Bergen decided the shopping center that housed K-Mart, Marshall’s and three other businesses, owned by the Shiva Properties of Yonkers, was in need of redevelopment.
The township reached a deal with a developer, Related Retail, a subsidiary of the famed Related Companies of New York. The deal was for them to first build a new shopping center at the site called “The Commons of North Bergen.” It would resemble the Clifton Commons shopping center built by Related Retail in 1999.
“But I had no knowledge of a plan being in place,” Wainstein said. “You would think that someone would let us know.”
The initial plan to build an entire shopping center at the site eventually fell through. But last September, the township’s Planning Board gave approval to Related Retail to build a Home Depot on the site.
Home Depot plan
The strategy of placing a Home Depot at the site would seem a bit peculiar, considering there is a Lowe’s Home Improvement Center directly adjacent to the Shiva Properties’ land.
“It’s poor planning and makes no sense,” Wainstein said. “It only makes sense for the developer.”
“The developer believes that the best use of the property is for a Home Depot,” North Bergen Township Administrator Chris Pianese said. “It is common in other places to have the two stores close to each other. They tend to feed off each other.”
However, that idea isn’t sitting well with Shiva or with the tenants who own and operate stores at the site. They are suing the town and the developer in an attempt to block the demolition of the existing buildings and the construction of the new Home Depot.
Wainstein doesn’t want to see his business moved or altered.
“I put a lot of work into this business,” Wainstein said. “I worked 16-hour days and weekends to see it succeed. I put a lot of my heart and effort into the business. I invested my money in the business in good faith. It’s easy to see that the town’s plans are much different than the owner’s.”
Designated a redevelopment zone
Back in 1999, following state laws for redevelopment, the township designated the entire area, from 83rd Street through 69th Street, along Tonnelle Avenue, as the area in need of redevelopment.
In accordance with the state laws, a municipality can choose struggling or underutilized areas and reconfigure them into redevelopment zones. The municipality can then use its powers of eminent domain to purchase the properties by paying a fair market price and then redeveloping the area.
However, Shiva Properties, represented by Hoboken-based attorney John Curley, believes the township violated redevelopment laws by allowing Related Retail to set its own purchase price for the property.
The current bid for the property – estimated at $11 million – is said to have been set at the 1999 market price, based on an appraisal made by Related Retail. Curley firmly believes the property currently is worth as much as $20 million, since the recent increase of property values.
However, since the township filed condemnation papers, it will utilize its eminent domain rights and move the process along, giving Shiva 90 days to either agree on a selling price or watch Related Retail redevelop the property.
“We always felt that the Shiva Properties, as it exists, was an area clearly in need of an upgrade,” Pianese said. “Home Depot was very interested in coming into North Bergen. The fact that the Shiva Properties has not upgraded that site forced us to move in this direction. North Bergen wants to upgrade the site. We’re working with the developer to do that. The developer has been able to solicit bids and find that Home Depot is willing to pay. We’re certainly not going to stand in the way of the developer. We are more than willing to negotiate with the current owners.”
Tom Olson, an attorney from the Morristown-based firm McKirdy & Riskin, which is representing Wainstein, believes the deal was not made in the best interests of his client or the other businesses in the shopping center.
“The objective of the state’s redevelopment law is to create new jobs, not to replace one set of jobs for another set just so a developer can make money,” Olson said. “The fact is that the redevelopment zone is already a very active and productive economic area. This is already an area producing jobs and tax ratables for the township. Shiva did not give permission to the town to have the area redeveloped, so there shouldn’t be a plan in place.”
Olson has filed two complaints, one against the Shiva Properties and another against the township’s Planning Board and Related Retail. The matter will be addressed in Hudson County Superior Court Feb. 6 in front of Judge Camille Kenny.
“It will then be up to the court to decide what’s right here,” Olson said. “There are a couple of different arguments to settle here. One, the Planning Board didn’t have the right to give the developer permission to build a Home Depot there. Plus, in the re-development statute, there is supposed to be relocation assistance, to help the business owners find a new place.”
However, the existing owners don’t want to move.
Vijay Shah is the new owner of the Dunkin’ Donuts in the shopping plaza. He just purchased the franchise for $600,000 in February of 2003.
“I don’t know what’s going to happen,” said Shah, who is also a homeowner in North Bergen. “I just started the business, thinking I would be here for a while. This is not fair. They say that they’re going to chase us all away.”
Shah said he went to Town Hall to see if he could speak with North Bergen Mayor Nicholas Sacco.
“I just wanted an appointment, but they said he was too busy and he couldn’t see me,” Shah said. “I’m a taxpayer and a homeowner and I just wanted to meet him for two minutes and discuss it with him, explain my situation.”
Pianese said that he met with Shah last week and spoke about the relocation process.
However, Wainstein does not want to relocate.
‘I don’t want to go’
“I don’t want to go,” Wainstein said. “I now have one of the top 10 grossing liquor stores in New Jersey, according to my wholesalers. It’s going to be very difficult to find a place that’s suitable, with parking space and store space.”
Wainstein said he is also restricted by law to where he can eventually go.
“I’m restricted by ordinance that I can’t be within 750 feet of another liquor store,” Wainstein said. “I also have a good check cashing business. In that law, I can’t be within 2,500 feet in radius of another check casher. It’s going to be very difficult to find another location.”
Wainstein also said that his pleas are falling on deaf ears. “I’ve heard nothing from Town Hall,” Wainstein said. “My phone calls won’t get returned. My attorney calls and he doesn’t get return calls.”
Pianese said that the only reason why the township filed the condemnation papers was because there was an impasse in the negotiations on the sale between Shiva Properties and Related Retail.
“All this is doing is forcing the court to put a true market value on the property,” Pianese said. “We’re happy to negotiate, but we haven’t been able to. The Shiva representatives are not willing to sit at a table. We’ve attempted to establish a meeting to negotiate to no avail. I think everyone is willing to offer a fair price.”
Pianese said that he sympathizes with the plight of the business owners like Wainstein.
“The existing lease will dictate what his rights are and the rights of the other businesses,” Pianese said. “There are laws that protect the tenants. I think it all comes down to the tenants and the existing owners, not the township. We want nothing more than to see that area developed quickly. How does the delay benefit us? It doesn’t make sense.”
“There has to be a different plan,” Olson said.