After losing its case against Bayonne over the aborted purchase of the Maritime District at the former Military Ocean Teriminal, the Port Authority of New York and New Jersey has taken the case to a higher court in an appeal filed with the Appellate Court on Aug. 11.
In July, the Port Authority lost its bid to block the sale of 126 acres to PortsAmerica, which offered $90 million for the same property the Port Authority agreed to buy for $50 million.
The Port Authority came to an agreement with the Bayonne Local Redevelopment Authority last September with both parties signing a contract for the sale – after which PortsAmerica made the more lucrative offer.
Using a technical violation in the public notice law – the BLRA apparently failed to notify two newspapers about the special meeting at which the Port Authority contract was signed – the BLRA voided the agreement with Port Authority a month later and voted instead for the PortsAmerica deal.
Both PortsAmerica and the Port Authority are proposing to run an auto import/export operation on the site. For the Port Authority, the move would allow for the expansion of container port operations next to the nearby Global Terminal on the border of Jersey City.
In June, Superior Court Judge Thomas P. Olivieri dismissed the Port Authority’s lawsuit, ruling that the BLRA was within its legal right to void the sale to the Port Authority.
The Port Authority’s appeal comes despite efforts by city and state officials to discourage further legal action.
The BLRA has expected an excess of $750,000 in legal fees to fight the Port Authority suit, a bill that is expected to rise.
Assemblyman Anthony Chiappone, who also serves on the Bayonne City Council and the BLRA, had harsh words for the Port Authority and Gov. Jon Corzine.
“The governor has the power to stop the Port Authority from appealing and he has not acted,” Chiappone said during the Aug. 14 meeting of the BLRA.
Retired Municipal Judge Patrick Conaghan – who is also running to become mayor – said he had looked over the case and urged the city to take the case directly to the state Supreme Court to save time and legal expenses.
A possible change for Harbor Station North
The BLRA is looking to make a deal with Fidelco/ Roseland Properties that would bring in money faster to the cash-strapped city.
Fidelco is the first developer to make a deal for the purchase of a section of the former Military Ocean Terminal, and proposed back in 2005 to build condos in Harbor Station – one of the six development districts at MOTBY.
Despite more than three years of planning, Fidelco has not yet begun construction. Recently, however, Fidelco has offered to set a firm timetable for development and payment of taxes as part of a possible deal that would allow the company to construct rental units rather than condos.
Joseph Nicols, executive director of the BLRA, agreed with critics of the proposal that the move could have a negative tax impact on the city because condos are evaluated differently than rental units. But he said the Fidelco offer must be looked at because it has some distinct advantages.
Fidelco is offering to close on the property by March 31, 2009 and to begin construction within 30 days of closing. This would not only provide the city with $7 million at closing, but would put the property immediately on the tax roles.
Under the current agreement, Fidelco has up to another year to close on the property with the option to begin construction within six months after that.
“That’s 18 months,” Nichols said.
In conjunction with the possible change, Fidelco would be willing to donate $800,000 toward the construction of two soccor fields, to be located on park land in Harbor Statiton South.
Nichols fielded objections from several residents, who mistakenly believed previous daily newspaper reports that suggested the city would only get the $800,000 and no other benefit.
The BLRA members went into close session to discuss the change. Fidelco’s partner in the project, Roseland, has a history of developing rental properties throughout Hudson County. Three years ago, some critics questioned how solid the firm’s commitment was to the construction of condos, when, historically, rentals were its specialty.
Another concern is the fact that a Trammell Crow has just begun construction on luxury rentals in the Bayonne Bay District of MOTBY, and until this proposed change by Fidelco, was the exclusive provider of rental units.
Trammel Crow is building a 115-unit apartment building and expects to see the first residents by next summer.
Nichols said he was trying to have representatives of the two development companies meet to discuss the projects.
Under the proposed agreement, Fidelco will begin the construction of 116 multi-family rental units within 30 days of closing as part of the first phase of construction.
The company would begin paying taxes on the day of closing.
The second phase of the project would begin in April 2010 for the 100 additional units.
Soccer fields go out to bid
The BLRA authorized Nichols to seek bids for the construction of the new soccer fields.
Two temporary fields had to be demolished earlier this year after work on construction of roads and other infrastructure reached their location.
Nichols said the newly proposed fields would be permanently located as to avoid unnecessary future costs.
Chuck Singer, who works for the Department of Public Works by caring for existing fields throughout the city, suggested that the BLRA install artifical turf rather than grass and provide overlays that would allow the fields to be used by other sports than just soccer.
Nichols said bids would include options for artifical and regular turf, but said that he feared the $1 million additional cost for artifical turf might be too much. He said the BLRA needed to move ahead with the project now so that if regular grass turf is selected the fields would be ready for the 2009 spring season.
The BLRA also voted to authorize Nichols to explore a possible arrangement with the New Jersey Economic Development Authority (EDA) for possible help with attracting and aiding developers for the remaining three development districts at MOTBY.
Nichols said the BLRA would have 60 days to explore options that might lead to a Development Assistance Agreement with the EDA, allowing the BLRA to tap the EDA for technical assistance for the development of the Loft, Landing and Point districts. The BLRA then would have another 60 days to work out the details of a three-year agreement that could help the BLRA and potential developers with financing for various aspects of the project.
The cost of these services would be negotiated by the BLRA.