Tonight, the Bayonne City Council will vote on whether to drop developer Kate Howard LTD, owner of Waitex Group, from developing the southwest portion of the Military Ocean Terminal (MOTBY) called Harbor Station South. It’s a major reversal that will affect the city budget. The original plan was to start construction next year on a hotel, low and mid-rise residential buildings, and retail space.
By holding out for a better deal, the city hopes to strengthen the city budget and generate more revenue in the future. The city is already in talks with multiple developers, according to Business Administrator Joe DeMarco.
What happened with Waitex?
A disagreement over undisclosed purchasing terms led to a broken deal between the city and Waitex Group, according to Andrew Casais, chief of staff for the city. “It’s frustrating and puzzling to me,” Casais said. The Davis administration was not expecting this. “That’s what’s so puzzling to me.” Was Waitex unhappy? “From what I know,” Casais said, “it felt like we had a very good relationship with them. When it came to the 11th hour, I’m not exactly sure why Waitex decided to go in a different direction.”
Despite the setback, the city will continue to shop around. Casais said, “[The mayor] is very eager to see the property developed.” The project timeline “depends on a lot of different things. Right now we’re going through another request for proposal. … Doing an RFP organizes interest in this site. It puts everything in a funnel and gets us to see in an organized fashion what the market has to offer.”
“I’m not exactly sure why Waitex decided to go in a different direction.”—Andrew Casais
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Meeting will also address a move to dissolve the MUA
Also on the agenda is a proposed ordinance to dissolve the Bayonne Municipal Utilities Authority (MUA) and accept all its “obligations and assets.” The MUA dissolution is seeking to cut city spending. In 2012, the MUA sold off some of its operations to a firm now called SUEZ, formerly United Water), in a 40-year management deal meant to cut costs for the city. Much of the day-to-day operations are now run by SUEZ, but the MUA oversees the city’s publically owned water system. The MUA downsized after the deal, going from 37 employees down to five.
Third Ward Councilman Gary La Pelusa is in favor of the dissolution and hopes that putting the nail in MUA’s coffin will benefit the city’s bottom line. He says the MUA’s contract work should be taken over by SUEZ. “We should not have to pay for a lot of these contracts,” he said.”Getting rid of the MUA would save us a couple hundred thousand dollars at least.” City Business Administrator Joe DeMarco echoed similar estimates.
But further privatizing the water utilities could raise issues. Can a private company both regulate itself and manage the city’s public water system?
While proponents of the MUA’s dissolution say the move will save the city money, others think the city needs the agency. Steve Gallo, former executive director of the MUA, says the regulations in place are necessary. “Our current model requires there be a high degree of local oversight to make sure they’re performing on behalf of the community,” he said. “Leaks are getting fixed, fire hydrants are getting fixed, it’s important to have someone watching. That’s the MUA’s job at this point.”
He adds that the MUA is dealing with ongoing water system issues. Gallo wants to see those projects finished. “There’s still some work that has to be done,” he said. “And someone is going to have to do it.”
Dissolving the MUA was a big talking point in the last mayoral election. Mayor James Davis is in favor, along with Councilman La Pelusa. “The plan all along was to dissolve MUA,” he said.
If the ordinance passes at tonight’s city council meeting, the council will conduct a public hearing, and possibly a final vote, on May 18.
Rory Pasquariello may be reached at roryp@hudsonreporter.com.