In a recently released report, state investigators had harsh words for a developer working on an important project in nearby Bergen County.
In a scathing 277-page report, the New Jersey Office of the Inspector General (OIG) claimed that EnCap, the private company hired to remediate 785 acres of former garbage dumps in Bergen County, misled state agencies about its ability to do the work and about the progress it was making at the site.
According to the OIG report, “The project was placed in the hands of a small company with [little financial capital] and run by financial managers and a geologist who were inexperienced in landfill closures.”
However, it also indicates that several state agencies, including the New Jersey Meadowlands Commission (NJMC), failed to properly manage and oversee the project – a fact that may be of interest to those who have criticized the NJMC’s recent land use decisions in Secaucus.
The report, which was ordered by Gov. Jon Corzine and released on Feb. 28, places the main responsibility for the EnCap situation on the company and its representatives.
Was once believed to benefit Secaucus
Nine years ago, the NJMC selected EnCap to clean up and redevelop a large site that had once been a series of legal and illegal garbage dumps.
Under the agreement, EnCap was supposed to remediate the land and develop hotels, office buildings, golf courses, and other commercial real estate projects.
Early supporters of the project, including Secaucus Mayor Dennis Elwell, thought the EnCap project would be a model for future public-private development ventures and would be a win-win all the way around. The garbage dumps would be closed permanently. Contaminated land that was saturated with leachate, a toxic stew that ran-off into the Hackensack River, would be cleaned.
Desolate space would be put to good use. And the area would benefit from an expanded tax base as new businesses moved into the planned offices spaces that were going to be built.
By last year, however, EnCap seemed to have lost momentum. The project was running over budget and behind schedule. Some environmental groups were unhappy with how the cleanup was being done. And EnCap missed a few project-related deadlines.
Finally, in September, the NJMC threatened to remove EnCap from the project.
In the wake of these problems, Gov. Corzine directed the OIG to conduct an investigation into what went wrong.
Major conclusions
“Our review revealed significant misrepresentations of qualifications and financial support on behalf of the private entity contracted to perform the remediation and redevelopment of the Meadowlands project,” said state Inspector General Mary Jane Cooper in the report.
The report concluded that shortly after EnCap was hired, the company lost one of its major financial backers, yet did not disclose this fact to state agencies.
The report also critized the company’s use of more than $315 million in state and local loans.
OIG investigation falls short
Despite the lengthy report and OIG’s many conclusions, some critics believe the investigation did not go far enough because it did not look into the role played by various state agencies that worked with EnCap.
Specifically, these critics believe the NJMC and the New Jersey Department of Environmental Protection (DEP) were let off the hook.
Mike Herson, field director of the New Jersey Chapter of the Sierra Club, said he was “disappointed” in the report.
“It was a bit of a whitewash. They chose a very narrow scope for their investigation and they chose to turn a blind eye to how land use decisions are really made in the Meadowlands and in the state of New Jersey,” he said.
The Sierra Club also believes the report failed to look at EnCap’s remediation work, which they said has done little to remove or thoroughly clean up the toxic land fills.
The organization, which is calling for a federal investigation into what went wrong, said in a letter to U.S. Attorney Christopher Christie that the report should have named which public officials dropped the ball on EnCap; should have investigated the many alleged short cuts made in land remediation; failed to disclose alleged financial links between state officials and EnCap executives, and did not investigate why the NJMC failed to catch problems earlier in the process.
That the NJMC was not scrutinized in the OIG report is a “glaring omission,” according to Herson.
“There was a potential to have a real clean up at the site and that hasn’t happened,” he said.
For its part, the NJMC has thus far refused to shoulder any of the blame for mismanagement of the project, preferring to place all responsibility at EnCap’s feet.
Brian Aberback, the NJMC public information officer, said in a prepared statement: “As the Inspector General’s report thoroughly demonstrates, our good-faith efforts have been undermined from the beginning by an organization that has misrepresented its qualifications and fiscal ability to carry out this important project.”
The NJMC has called on the Division of Criminal Justice to conduct its own investigation into the EnCap mess.
Meanwhile, EnCap remains on the project and recently began working with the Trump Organization to move it forward.
Implications for Secaucus
Last week, Mayor Elwell said the EnCap situation had new implications for Secaucus.
“We’re facing a similar situation here in Secaucus with the Damascus Bakery and the permits that were granted to the bakery [by the NJMC],” said Mayor Elwell.
Elwell and some residents do not want a new bakery in town, even though the NJMC granted it permits last spring.
“How closely are they looking at these projects before they approve them?” Elwell asked.
The mayor, who has not yet read the OIG report, said, “The public has a right to know what happened. How did this [EnCap] project, which had very noble intentions at the outset, get out of control? The public has a right to know, not so much so we can point fingers and blame people, but so that we can make sure it doesn’t happen again.”