EMERSON—Accurate Builders LLC, a partner in the Bock 419 Emerson Station project, is facing foreclosure on an $8 million mortgage for a property in Kenilworth due to missed payments and failure to maintain a required reserve. The same firm is behind the delayed Emerson Station project, which is now involved in multiple lawsuits, including a $1.4 million claim from a subcontractor and a $500,000 dispute with the Borough of Emerson over unpaid construction services. Legal battles are ongoing, with trial dates yet to be set.
Accurate Builders, along with JMF Properties, are the partners behind Emerson Redevelopers Urban Renewal (ERUR), a partnership that has yet to complete a nearly six-year-old project known as Citizen Emerson Station—a 147-unit mixed-use development with 15,000 square feet of retail space under construction near the borough’s train station.
The massive downtown redevelopment project was approved in late 2018, during the waning days of immediate past mayor Louis Lamatina’s administration. The project awaits a new Superior Court trial date for Emerson’s over four-year-old lawsuit to recoup $500,000 in construction services allegedly owed in exchange for a deed to the former ambulance property that ERUR received in 2019.
In mid-June, attorneys for Crown Bank of Elizabeth filed a three-count civil action complaint against Accurate Builders and Kenilworth Redevelopers Urban Renewal for mortgage foreclosure, foreclosure of a security interest in mortgaged property, and possession of the mortgaged property.
Efforts to reach Crown Bank’s attorney, Mark Roney, of Hill Wallack LLP, Princeton, for comment were not returned by press time.
“The borrowers defaulted under the loan documents by failing, without limitation, to replenish the reserve after the balance fell below $100,000, and failing to make the monthly payments when due, resulting in the payments being past due beginning with the payment due Dec. 2, 2023, and for each subsequent month thereafter,” states the civil complaint.
The complaint was filed in Superior Court, Union County, by attorneys for Crown Bank, Elizabeth. Crown Bank demands “possession of the mortgaged property, the fixtures and other personal property attached hereto” and “damages for mesne profits,” or profits received by a tenant in wrongful possession of land, along with attorney fees, disbursements, and further relief per the court, according to the complaint.
According to the foreclosure notice, the borrowers defaulted on the $8 million mortgage loan from Crown Bank when they first failed to replenish the mortgage reserve after it fell below $100,000.
To initiate the loan, the mortgagors were required to establish a mortgage reserve of $540,000 solely for making payments during the loan’s first 24 months. Should the reserve fall below $100,000, the borrowers were required to replenish it to $540,000, which did not occur, according to the complaint.
Moreover, they failed to make monthly payments starting in December 2023 and for every month thereafter, according to the foreclosure complaint.
The bank’s lawsuit states, “As a result of the borrowers’ defaults under the loan documents, Crown (Bank) has elected to accelerate the amounts due and proceed with a foreclosure of the mortgaged property (25 North 26th Street, Lot 9, Block 183, Kenilworth), seeking possession thereof, and to sell the tangible personal property located at the mortgaged property.”
“This same company (Accurate Builders) has been delaying and not doing anything on our (Emerson) site,” borough attorney John McCann told Pascack Press.
Previously, he said that the redevelopment contract approved in 2018 under the prior mayor’s administration contains no dates or timetables, and the borough cannot force Accurate to finish construction by imposing legal or financial penalties, as none are included in the contract.
He said long-term options may include repossessing Block 419 through eminent domain if construction of Emerson Station is not completed in a timely manner.
He suggested that given Accurate Builders’ cash flow struggles, it might also be struggling to obtain the funds needed to restart construction on the Emerson site.
Accurate Builders is a joint partner in the development of Emerson Station, a 147-unit mixed-use project in downtown Emerson. Only last month, attorneys for the redeveloper asked the Superior Court judge to delay a trial scheduled for Sept. 3 over Emerson’s four-year-old lawsuit against the redeveloper.
The lawsuit centers on the redeveloper’s decision to renege on paying Emerson $500,000 in construction services in exchange for a property deed to the borough’s former ambulance property.
The redeveloper alleged the borough failed to meet a Dec. 31, 2019, deadline to provide a site, plans, and permits for a new ambulance building.
No new trial date has been set. The redeveloper has challenged large portions of Emerson’s testimony related to their claims that the redeveloper operated in “bad faith” and refused to negotiate any terms to extend the deadline.
For case filings and updates, residents can search for BER-L-003359-20 on New Jersey eCourts Civil Case Public Access at https://www.njcourts.gov/public/find-a-case/civil-case-public-access.
The redeveloper claims Emerson made no efforts to meet the Dec. 31, 2019, deadline, alleging that the mayor opposed the development. Emerson alleges the redeveloper refused to negotiate on the deadline.
McCann said ERUR offered $250,000 in 2020 to settle the claims against them, but Emerson declined the offer and later filed a lawsuit over the $500,000 owed in June 2020.
Other ‘Emerson Station’ Problems
A subcontractor working on the construction of Emerson Station previously filed a civil complaint and construction lien claim against the developer, Emerson Redevelopers Urban Renewal, to recover slightly over $1.4 million it claims it is owed.
The subcontractor, BFS Group LLC, of Mount Laurel, filed a civil complaint against Emerson Redevelopers Urban Renewal (ERUR) on March 21 in Superior Court, Hackensack, for $1.4 million “plus interest, costs, and reasonable attorney’s fees,” according to the complaint.
The complaint notes that if the judgment for owed funds goes against ERUR and is not satisfied by the defendant, the “real property” (i.e., Emerson Station) owned by the defendants may be sold to pay for the unpaid debt.
The new lawsuit against ERUR is for nearly three times the $500,000 that the borough claims it is also owed for a deed it provided to ERUR in exchange for construction services that were never provided.
The plaintiffs in the current lawsuit, BFS Group LLC, of Mount Laurel, filed a civil complaint in Superior Court, Hackensack, alleging that Emerson Redevelopers Urban Renewal, or Accurate Builders, of Lakewood, have not yet paid them $1,406,233.52 owed under a contract for work performed through Feb. 9, 2024.
The $1.4 million-plus in dispute was payment for furnishing and installing framing, construction goods, supplies, materials, and providing all labor and materials needed for agreed-upon work, according to the complaint.
An order from Superior Court Pretrial Judge Peter G. Geiger assigned 300 days, or approximately 10 months, for discovery between the parties to gather information and arrange depositions needed to make their mutual cases.
“Discovery … runs from the first answer or 90 days from service on the first defendant, whichever comes first,” states the court’s order. That could put a trial date in early 2025, following discovery.
The civil complaint notes that the original subcontract with BFS Group LLC was for $4,100,000, which was amended to $3,847,761. The complaint notes that ERUR paid only $2,441,527.48 of the amended contract and owes the difference, $1,406,233.52.
On Aug. 5, the parties were ordered into mediation. It is unclear if any dates for that were set.