The City Council has introduced an ordinance that authorizes the use of the Sixth Street Embankment for a rail line and other possible uses as a park, and developer Steve Hyman, who owns the property, isn’t happy about it.
Hyman bought the property from Conrail in 2005 for $3 million with the aim of constructing residential units. Since then, he and the city have been fighting over a definition of the railway that may determine who ends up owning it.
Two court rulings in August sided with the city and preservationist groups that hope to use the six-block long former freight rail trestle for recreation.
But the city, under the laws regulating how the embankment can be transferred to a new owner, must actively seek to develop the property for rail use first. So the new ordinance seeks to acquire the property for continued freight rail and other compatible purposes, including passenger rail, open space, and trail and historic preservation.
The ordinance sets aside $5.7 million to acquire the property.
The measure will have its public hearing the Oct. 8 council meeting.
Hyman said he tried for months, without success, to meet with Mayor Steven Fulop and council members in an attempt to resolve a decade-old issue gridlocked between the city, the developer, and preservationists.
“I just want to sit down and talk about this without all these legal issues to see if we can resolve this,” Hyman said.
At one point, Hyman scheduled a meeting with Ward E Councilwoman Candice Osborne before the August court rulings were delivered. But she told him she would not discuss the embankment issue while it was still being litigated.
Hyman wants to develop the property for residential and commercial use. Some residents in the area want the property turned into a park, similar to the High Line in New York City, a former freight railway that was successfully converted into a passive park.
Hyman, because he has not been allowed to use the property for development, has not paid taxes, and the city placed tax liens on the property. Hyman subsequently purchased his own liens. This led to a kind of legal stalemate, until the August court rulings cleared the way for the city to begin taking control of the property.
Hyman said the city’s strategy – applying for federal government permission to use the right-of-way for rail – is only a ploy that will allow the city to take control of the property. He believes the city will later change the use once it has possession of the property.
A long, tortured legal history
The embankment consists of six stone and earth trestles, each about the height of a two-story building and no longer carrying rails, along Sixth Street from Marin Boulevard to Brunswick Street in downtown Jersey City. A relic of Jersey City’s industrial past, the embankment supported the Harsimus Branch of a Pennsylvania Railroad freight line that carried goods to and from the waterfront from 1902 through the 1970s. Conrail ceased to use the railway in 1996.
The city argued that Conrail’s sale to Hyman was not properly done. The city and a coalition of preservationists argued that the property fell under guidelines that required it to be reviewed by the federal Surface Transportation Board (STB), and then put out to bid. Hyman and his legal team argued that the embankment was a rail spur, not a main line, and therefore exempt from the regulations dictating how an abandoned rail line must be disposed of. If defined as a rail line and not a spur, then the STB would have to review it.
The city attempted unsuccessfully to negotiate a settlement with Hyman. In 2006, the STB ruled that Conrail erred by not getting authorization from the STB to legally abandon the embankment, saying Conrail should have offered the property to public entities before it was sold to Hyman.
Hyman appealed that decision to the U.S. Court of Appeals, which reversed the STB decision, defining the Harimus Branch as a spur and not subject to STB regulations.
The city and preservationist filed a challenge to this ruling. Earlier this year, federal courts ruled in the city’s favor, and in August, the STB reaffirmed that the property was not a spur, and was subject to review.
This opened the door for the introduction of an ordinance that would allow the city to finally take control of the property.
Hyman said he has tried to meet with Fulop and several council members in an attempt to resolve the issue outside the courts. But city officials said they could not meet with him to discuss the matter because of the pending litigation.
Closed sessions questioned
A letter was issued from Water, McPherson, McNeill, lawyers representing Hyman, saying that a special closed door council meeting held on Sept. 8 violated the open public meetings act by failing to give enough public notice. They said bids and funding of contracts are not subjects that are legally allowed to be discussed out of public view.
Hyman’s lawyers said in their letter there has been no public caucus discussion on the ordinance, and accused the city of “secret deliberations.”
“The LLCs and the public at large have a right to know if the City Council will be voting on an ordinance that commits the city to spend $5.8 million to operate a freight railroad through the heart of downtown without any reasoned deliberation, and (to know) the basis upon which the council has decided to take such action,” their letter said.
City officials, however, countered that ligation or decisions that might result in litigation can be legally discussed in closed sessions as long as what is discussed is later made public.
Steven Gucciardo, representing the Sixth Street Embankment Preservation Coalition, praised the council for introducing the ordinance.
The ordinance, if approved at second reading in October, would authorize relevant city departments to file for, and to pursue a federal eminent domain remedy to acquire the property. As a condition of STB approval, the city must continue efforts to provide freight rail service on the line for two years before it can use the land for any other purpose.
Al Sullivan may be reached at asullivan@hudsonreporter.com.