EMERSON, N.J.—The borough attorney has called the borough’s redevelopment partner “incompetent” and says there are major problems with agreements the previous administration struck with it, including lack of an enforceable timetable for completion.
A lack of a deadline and dueling lawsuits have thrown the borough’s downtown redevelopment project off track.
In addition to being a project that has no timetable for its completion, there is no end date in sight.
So reported Borough Attorney John McCann about the Block 419, or Emerson Station redevelopment project, at a recent Emerson Borough Council meeting much to the dismay of the mayor and every council member.
McCann said the contract, approved in late 2018, has “essentially an unlimited amount of time” to be completed, which he said had never seen in any other contract he had ever been involved with between a town and a developer.
McCann said a recent motion by the developer to move proceedings into federal court had been denied and though motions were still pending on federal jurisdiction it appeared the matter would now be heard in Superior Court.
“Clearly the prior administration signed a contract with no end date in sight,” said McCann in a recent redevelopment update.
He said the contract’s terms are “a major disservice to this community and the biggest problem we’re saddled with.”
Council President Kenneth Hoffman seemed especially taken aback by what he called “the lack of timetables put in there.”
Replied McCann, “We have zero leverage, inexplicably, by the way. I’ve never seen a contract like that in my life.”
The project remains mired in dueling lawsuits, one filed by the borough against the developer to recoup $500,000 in construction services it alleges is owed from the sale of a former ambulance property. The developer alleged the borough did not meet a December 2019 deadline to provide designs and plans for the new ambulance building per its contract.
We reached out to attorney Joseph Paparo, who represents Accurate Builders and Developers of New Jersey, owned by Yaakov Klugman, for comment on McCann’s views. Paparo said he had no comment.
Klugman is a 51% partner in the redevelopment project; 49% is owned by Giuseppi Forgione’s JMF Properties of Whippany.
The developer charges the borough’s new administration with trying “to interfere, impede and ultimately destroy” its ability to finish the project.
Emerson Station, also Block 419 due to its location—and a history that includes controversial findings leading to condemnation and threats of eminent domain—proposes to bring 147 apartments and about 15,000 square feet of retail space to downtown Emerson, crisscrossed by railroad service accessing nearby towns and New York City.
In addition, it proposes 22 affordable units, 15 on site and seven elsewhere in town.
Mayor Danielle DiPaola said that “we’ve seen some very small progress in the last week” in early January.
Two smaller buildings were demolished on site recently.
“We look forward to working with them and ironing this out and getting that project moving,” she said.
McCann told Pascack Press that he believes that no due diligence was conducted on the developer prior to final agreement signing and that “there are some major problems with those agreements” including lack of an enforceable timetable for completion.
“My professional opinion is that the developer is incompetent,” said McCann, updating the new council members on Jan. 5.
McCann said the borough’s redevelopment special counsel, Brian Giblin, indicated that the dueling lawsuits were likely to be going soon into court-ordered mediation. He said he could not give a time estimate due to Covid’s impacts on court schedules.
He said the borough had been pressing for a court-ordered legal monitor to monitor the actions of both parties related to the lawsuit and the redevelopment’s progress.
He said the redeveloper opposed a monitor though it had previously suggested such an arrangement to help expedite the redevelopment process.
In early February, the council introduced an ordinance to be voted on Feb. 16, to secure a “leasehold interest” in Laurel Chinese Restaurant at 182 Kinderkamack Road, as part of its prior agreement with the redeveloper to undertake eminent domain should a landowner or tenant not come to an agreement with the redeveloper.
McCann told Pascack Press that “eventually” both sides may end up taking depositions and that currently there is no end date to the discovery phase of litigation on both parties. He said Gregg Padovano is the presiding Superior Court judge.
He said that covid has delayed the lawsuits for eight months and courts have still not returned to normal operations.
“You cannot give a developer an open-ended contract and have them build it when they feel like it,” McCann told Pascack Press. He said that’s why developer contracts have deadlines. “Do what you said you were going to do and get to work,” he added.