Several residents speaking at the Sept. 20 special meeting of the Bayonne Local Redevelopment Authority compared the sale of the 126-acre Maritime District at the former Military Ocean Terminal to the deal in which Manhattan was purchased from the Native Americans.
After the 4.5-hour meeting, some residents claim Bayonne got scalped.
Despite other offers that would have given the city millions of dollars more, the BLRA voted unanimously to sell the Maritime District to the Port Authority of New York and New Jersey.
The BLRA voted unanimously to sell the property for $50 million, which could include payment instead of taxes of $1.8 million over the next 20 years.
Chance for a container port dims
The move effectively blocks efforts by members of the International Longshoremen’s Association to get the area developed as a container port, since the Port Authority has agreed to honor covenants that would prohibit such a use.
Nancy Kist, BLRA executive director, said negotiations had been going on with the Port Authority on and off since 2004, but heated up over the last few weeks, leading up to an agreement that was passed by the Port Authority board on Sept. 19.
The unannounced negotiations were underway even as union officials pleaded their case for a container port and several council members believed the port proposal would get a public hearing.
Councilman Gary La Pelusa said the sale came as a shock since he had received promises that those proposing the port would get a chance to make a presentation.
The deal with Port Authority was done without competitive bidding or requests for other proposals, legal – according to BLRA Counsel Jay Coffey – under the state’s redevelopment laws.
“I don’t agreed with it either,” Coffey said. “But that’s the way the law is.”
Councilman Anthony Chiappone, who is running unopposed for the state Assembly in November, said this will be an area he will look at changing when he becomes a legislator.
Secret negotiations angers critics
Chiappone objected to the secrecy that seemed to surround the agreement and the vote to approve the contract.
“I wouldn’t have known about the meeting if it wasn’t for the story appearing in The Star Ledger,” he said. Howard Fitch, chairman of the BLRA, angered several residents at the meeting when he said that he was upset about the story appearing before the vote, saying people should have read about it in the paper after the vote instead.
Residents who managed to come to the hearing said they were appalled by the lack of public notice.
Former Municipal Judge Patrick Conaghan said the notice of the special meeting was posted on bulletin boards in City Hall minutes before City Hall was scheduled to close on Sept. 18, just barely meeting the legal requirements for a 48-hour notice.
The BLRA also notified a newspaper, but Coffey said the law did not require the paper to print the notice.
Since the BLRA is an autonomous governmental body, the City Council is helpless to undo the deal, said Chiappone, who has called the BLRA “a secret society” which keeps deals secret from the public until it is too late to stop them.
“I’ve asked to be on the BLRA since I became a councilman, but I’ve been denied,” Chiappone said, clearly upset by how this contract was awarded. “Now I’m going to ask the City Council to dissolve the BLRA.”
Saving the municipal budget
The negotiations and the deal with the Port Authority comes at a critical time for the City of Bayonne, since the city is currently short $23 million for its already expired 2007 fiscal year budget and is expected to be short $25 million in its 2008 fiscal year budget due for introduction in October.
Since 2005, the BLRA has served as an economic stopgap for the municipal budget, funneling developer deposits on land through a legal loophole to the city. The problems started in June 2006, when a downturn in the real estate market apparently caused one developer to back down on a deal, sending the municipal budget into default. The BLRA again came to the rescue, drawing up another developer that filled the gap. But the BLRA could not come up with an agreement to fill a similar $25 million budget gap for the 2007 fiscal year. So the city, after passing a budget dependent on the revenue, once more went into default.
With the 2008 fiscal year budget looming with yet another $25 million budget gap, the negotiations stalled with residential developers, and the BLRA had to look elsewhere for cash. The Port Authority deal almost exactly covers the city’s fiscal needs, raising protests from residents and other port developers who claim the city sold the property for far less than it was worth.
Other offers ignored?
Opposition to the Port Authority’s offer drew a curious coalition of normally politically opposites.
Chris Ragucci, an attorney representing a developer who wants to build a container port, said his client would beat the Port Authority’s offer by paying $75 million and would live by the same restrictions as the Port Authority for no containerized freight.
Anthony Ward, speaking on behalf of a media company, said his client would also pay more for the property, and urged the BLRA to put off the vote until its regularly scheduled meeting on Sept. 27.
Ward and others asked what the hurry was to vote on the contract.
Kist said under Port Authority regulations, the agreement needed at least 10 days for approval from both New York and New Jersey governors, who regulate the Port Authority’s operations.
But resident Bob Lake said the contract was being pushed through before Joseph Doria will step down as mayor of Bayonne to become the Department of Community Affair’s chairman. Adding evidence to this conclusion was the Sept. 22 announcement by Gov. Corzine that Doria would take on his new role as of Oct. 9.
Gov. Corzine has come under heavy criticism for not having a sitting commissioner in particular to oversee the development of affordable housing around the state.
Conaghan, who ran against Doria for mayor in 2006, blasted the BLRA for “a financial gimmick” that will allow Doria to leave Bayonne with a clear conscience.
Port Authority has no firm plans for property
Although the Port Authority will add the property to its portfolio of properties, officials could not say what the maritime district would be used for, or how many jobs it will create in Bayonne.
Louis Ripps, an occasional critic, asked questions, grilling Kist on the details of the deal. She asked how many jobs the site would generate and what the Port Authority would use it for.
The job question became a focus of conflict, since Ragucci said a container port would have created thousands of jobs in and around Bayonne.
The Port Authority will be leasing the property to some maritime-related business, but could not project what business that would be or how many jobs might be brought.
Since roll-off cargo – meaning new automobiles – is among the accepted uses, the International Longshoremen’s Association members and others criticized the move, saying that the number of jobs would be relatively small and would be temporary.
Ragucci, Lake and Ward all pointed out problems with Port Authority operations in the past.
Ragucci said the somewhat vague contract terms would take control out of the hands of the BLRA or the City of Bayonne, and could even allow the Port Authority to resell the property at a significant profit.
Pilot payments are a gift?
Because the Port Authority is offering the city certain agreed-upon annual payments instead of taxes, the matter will come before the City Council for a vote.
But Coffey said the council will only vote to accept or modify the yearly payment, not on the contract itself. If the City Council votes down the payment, the Port Authority could actually take the land and not pay anything. If the council votes to modify the yearly amount, the matter might have to be reviewed by the Port Authority board.
Technically, the Port Authority doesn’t pay taxes, and this is a provision of the contract to help offset the loss of taxes the property would have received had it been sold to a private firm.
Several speakers expressed distrust for the Port Authority, noting that it had once tried to block the City of Bayonne from taking possession of the MOTBY.
La Pelusa and Chiappone have vowed to bring the issue up when the City Council meets on Sept. 26, when they will also begin deliberation as to who will replace Doria as mayor.