Despite promises that the city would incur no debt by passing a $2.5 bond ordinance to help Empire Golf build a walkway at the Bayonne Golf Club, critics claimed the city should not be supplying Empire with loans.
Louis Ripps, a semi-regular resident commentator at council meetings, asked what collateral the city was receiving in exchange for the loan.
The golf club’s developers are required to build a section of the public walkway as part of a state law mandating that all waterfront developers contribute to the public path.
Empire Golf, a national chain, took over the development of the golf course last year after OENJ-Cherokee withdrew from the project.
Rinaldo M. D’Argenio, the attorney for Empire Golf, said his company had incurred significant costs since taking over the project last year, and the city’s posting the bond was a way to help finance the walkway.
Empire Golf, according to attorney Joe Baumann, representing the city on the matter, will pay the bond back as well as all of the associated costs, so that the city has no obligation. Furthermore, Baumann said, the city’s bond would be paid before any other debt if the business was to fail.
Chris Patella, attorney for the council, said the city tax assessor was currently determining the value of Empire-owned land that had once served as the city dump, assuring Ripps that the land was well in excess of the value of the bond. If there was a default, the city could get money from the sale of the land.
Located along the northern shore of Constable Hook (opposite the southern side of the Peninsula at Bayonne Harbor – the former Military Ocean Terminal), the course sits on 120 acres that partly served as a municipal dump from 1910 to 1983, and also served as an industrial fill site formerly owned by PSE&G. The site was once considered as a site for a nuclear power generating plant.
D’Argenio was particularly vexed by Ripps’ describing the bond agreement as “a shell game.”
“This is not a shell game. This is a legitimate agreement. The city gets an easement. We build the walkway. We maintain it. We make repairs. This is at no cost to the city,” he said.
Ripps and other critics asked why the golf club could not seek out a more conventional loan through a bank.
D’Argenio said a bank would not likely fund a loan for a project that will generate no revenue.
“This is for public use,” he said.
Councilman says
While Councilman Anthony Chiappone said he wanted the project to succeed, he tended to take the side of the critics. He asked why the city did not have an agreement first for repaying the bond before voting on the bond.
“This is not the first loan this City Council has voted for in regards to this project,” he said. “We voted for $2.5 million before this. This bond is for another $2.5 million. I believe we should have an agreement with Empire Golf before we vote to take out the bond.”
Chiappone attempted to table the bond until an agreement could be forged for repayment, but he could not get a second to his motion, and the rest of the council voted to approve the measure.
Councilman John Halecky pointed out that this loan helped cover part of the $4 million cost that Empire paid to close the dump – part of the requirement for development, a cost the city would have incurred had no golf course been constructed.
“This is a former dump,” he said. “Now it is a property that pays taxes, and I would vote to give them twice as much as this bond if they needed it. Empire Golf has other courses and a proven track record and that speaks for itself.”
Contact Al Sullivan at asullivan@hudsonreporter.com