One chapter of the long saga to open the city’s first flood resiliency park was accomplished this past week when the City Council awarded a contract to build roughly 1 acre of the Southwest Park near the city’s southern entrance. But acquiring an adjacent parcel to expand the park has run headlong into opposition from the parcel’s owner, Academy Bus, a major employer and taxpayer in the city.
The park in the flood-prone southwest of the city, a project Mayor Dawn Zimmer advocated before ever running for public office, is expected to open by June 2017, according to City Business Administrator Stephen Marks.
The $4.9 million contract was awarded to Flanagan Contracting Group Inc. of Hillsborough with a unanimous 8-0 vote (Councilwoman Tiffanie Fisher was absent).
“It’s a long time coming, a lot of people put a lot of effort into trying to make that space into a park, and its great we’re that much closer to putting shovels into the ground,” said 4th Ward Councilman Ruben Ramos after Wednesday’s meeting.
Still, only half the battle has been won. Mayor Zimmer and Academy Bus have begun to square off over ownership of a parcel of land the city hopes to add to the park, next to the one already acquired.
A contract to start developing the Southwest Park has been approved and it is expected to open by June 2017, while the city negotiates with Academy Bus over property for park expansion.
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The administration acquired the first portion, Block 12, in 2013 for $4.5 million after going to court with former property owner Manhattan-based Ponte Equities. Last December a court established the final price $1 million less after a jury valued the property at $5.5 million following an eminent domain condemnation authorized by the City Council.
Under New Jersey law, municipalities can exercise eminent domain to seize private property for public purposes in exchange for paying fair-market value. If the two sides cannot reach a deal, a court decides the price of the land.
Ponte Equities did not respond to phone calls to ask whether they plan to appeal the final price.
Zimmer’s administration may take similar steps against Academy to acquire the second parcel, commonly referred to as Block 10, which they say is worth $4.75 million.
Letters speak louder than words
Since acquiring the former Ponte property in 2013, the Hoboken Parking Utility has operated Block 12 as a commercial parking lot. Sources close to Academy Bus say the city reached out to the company late last year to set up a lease agreement to move the parking lot in Block 12 to Block 10, but now has decided to try to simply acquire Block 10 instead.
In a letter from Mayor Zimmer dated Jan. 14, 2016 to Academy Bus Chief Operating Officer Tom Scullin, she writes, “As we discussed, the City would like to acquire Block 10 for their fair market value in order to expand the Southwest Park currently being built on Block 12. Therefore, we have decided not to move forward with the proposed lease.”
Based on the amount per acre set by the jury as part of the Block 12 court decision, the city believes Block 10 should cost $4.75 million.
Academy Bus, on the other hand, feels the property is worth $13 million, which Academy President Frank Tedesco informed the mayor about in an April 28 letter. Subtly boasting of their contributions to the community, Tedesco says at the head of the letter that the bus company has had its corporate headquarters in Hoboken for 40 years and employs some 440 workers, as well as generating $500,000 in tax revenues per year.
Owning over a thousand buses in a dozen cities from Massachusetts to Miami, Academy’s headquarters the northwestern district of Hoboken is often busy with buses throughout the day.
Bus company offers free land
“I have given a great deal of thought to the City’s proposal to acquire a portion of our headquarters property at 111 Paterson Ave.,” he wrote, before offering a third option to the $13 million price tag. “As an alternative, we are prepared to convey that portion of the property you identified for acquisition in your letters at no cost to the city in exchange for the city’s adoption of a redevelopment plan (or other acceptable mechanism) that would permit the mixed use development of the property on the remainder of our site for office, residential, and some retail uses,” writes Tedesco.
He offered to provide a preliminary concept plan to the city in the letter, acquired by the Reporter, which proposes mixed-use buildings, an office building, outdoor café and dedicated city park.
The residential units would also mean new ratables the city could use in the next budget cycle to counterbalance a tax increase.
But Zimmer declined.
Deal or no deal
Academy Bus’ proposal for residential units within the property does not fall within permitted uses under local zoning. The property is on the border of an R-3 zone, which ultimately leaves the decision to the discretion of the city.
In a statement this past Thursday, Zimmer said, “the City’s 2004 Master plan identified six acres in the southwest for potential open space, including Block 10 and Block 12. These properties were identified because the master plan recognized that Hoboken as a whole had a severe shortage of open space, and this shortage was particularly acute in the southwest.”
She later noted the other development that may grow in the area, including a proposed redevelopment plan for the NJ Transit rail yards. That plan, a scaled-down alternative to an earlier plan NJ Transit put forth for their own property near the border, could add substantial residential development to southern Hoboken as it is.
So it is “important that we be very careful about the level of additional residential development in the southwest,” Zimmer said.
In offering $4.75 million to Academy Bus, the city hinted that it was willing to offer the “fair price” in order to resolve the matter without the necessity of incurring litigation costs on both ends.
The bus company views their offer as a win-win scenario, with Academy spokesperson William Maer, stating, “Academy Bus and its affiliates have submitted a comprehensive and thoughtful plan to both provide a new park and also a reasonable redevelopment project for Hoboken.”
Block 10 is technically owned by Jefferson Street Partners II (owned by Academy Bus) and even more than Ponte Equities, the company could put up resistance in court.
As talks continue, Zimmer did not divulge details of the negotiation, instead referring to the fact the letters between the administration and Academy were released to the media.
“[The] city is engaged in confidential good faith negotiations and these negotiations are not and cannot be conducted through the press,” she said in an email.
Money for the SW park
Of the $4.9 million awarded to Flanagan Contracting Group Inc. for the construction of the first phase of the Southwest Park in Block 12, $3.6 million is eligible for financing by the New Jersey Environmental Infrastructure Trust Fund (NJEIT).
Since Hurricane Sandy caused disastrous flooding in Hoboken, Zimmer has advocated flood-resilient parks able to store storm water to relieve the city’s low-lying areas. Projects in communities with combined sewer overflow systems, like Hoboken, are similarly entitled for 19 percent forgiveness on said loans.
“The portion of the contract not being financed by the NJEIT ($1.3 million) will come from Hoboken’s Open Space Trust Fund bond ordinance reserved for acquisition and construction of new parks,” said Marks in a letter to the mayor dated May 17.
The plans for the park, which can been viewed at www.hobokennj.org/swpark, feature a children-friendly playground area, a dog run, pop-up market zone, rain garden, benches and movable café tables.
Steven Rodas can be reached at srodas@hudsonreporter.com.