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BY JOHN SNYDER
OF PASCACK PRESS
EMERSON, N.J.—Mayor Louis Lamatina has signed two documents he says will dispense with lawsuits against the borough, close off eminent domain threats, and clear the way for downtown redevelopment, but it’s not clear that holdout property owners, who say their rights are being trampled, are on board with the plan.
Their attorney says the suits are still pending.
At the Oct. 16 meeting of the governing body, following closed-door deliberations, the council resolved, 4-0-1, to authorize Lamatina to sign twin memorandums of agreement between redeveloper JMF Properties, holdout owners of 188 and 214 Kinderkamack Road, and the borough.
“JMF has agreed to purchase those properties and the Borough will no longer consider eminent domain, which was required in order to settle with Fair Share Housing. Importantly, all lawsuits will be dismissed against the Borough challenging our settlement and the redevelopment of our downtown,” Lamatina said in a statement.
He said the MOAs are “a win-win-win for all involved, especially the residents of our borough … We look forward to moving forward with this long-overdue revitalization to a part of our downtown.”
Councilmember Danielle DiPaola abstained, citing “trust issues,” disagreement with the redevelopment project’s scope, and her opposition to related land use matters evidently still being discussed behind closed doors.
The MOAs, if executed by all parties, removes the threat of eminent domain against owners on Block 419 lots, 2, 3, 4, and 6.01, which include the Cinar Turkish Restaurant, Cork & Keg Liquor, and Ranch Cleaners.
The documents refer to purchase and sale agreements with Emerson Redevelopment Urban Renewal (ERUR), an affiliate of JMF Properties established equally in 2016 by Giuseppe Forgione and Steven Kalafer.
At press time, the MOAs had not yet been signed by ERUR; Alexander Lapatka, managing member for 214 Kinderkamack Properties LLC; or Deborah Agnello, attorney in fact for Della Volpe, trustee.
Indeed, Richard De Angelis, attorney for the property owners, told Pascack Press on Oct. 18, following Lamatina’s announcement, that “The litigation between our clients and the borough remains pending.”
He said, “It is true that after filing their lawsuits more than 18 months ago and having a cloud of condemnation hang over their properties for more than three years, our clients agreed to consider an offer from the developer.”
He added, “While the property owners have been in negotiations with both the borough and the developer, our clients have not signed any agreements to sell their property, nor have they executed the MOA approved by the borough on Tuesday.”
At stake for the borough and its partner is an ambitious mixed-use project by JMF Properties to erect retail stores, 147 apartments, and a parking garage on Kinderkamack Road between Lincoln Boulevard and Linwood Avenue.
The redevelopment is set to feature luxury living and 20,000 square feet of retail for what De Angelis called “restaurants, luxury goods, fitness studios, and banks” that would net approximately $2.5 million in annual rental income.
There would also be a set-aside of 22 to 29 low- to moderate-income housing units at the site, less than 8 percent of the borough’s unmet need for affordable housing, De Angelis told Pascack Press Feb. 20.
JMF Properties previously said it had contracts on most of the properties it requires to start building. If it gets them all, it can move on to apply for permits.
Borough figures from 2016 show that with land and improvements, the holdout lots were assessed at $224,900 (lot 2), $248,800 (lot 3), $1,763,900 (lot 4), and $875,000 (lot 6.01).
The borough redesignated the properties a condemnation redevelopment area in 2017, following an updated study from the borough planner, and the owners sued.
DiPaola: ‘There is no agreement’
DiPaola, Lamatina’s Republican challenger for mayor, vociferously protested the resolutions, ultimately abstaining on both—including on the grounds that she maintains objection to development of up to four stories, which the MOAs do not discuss.
With the first of the resolutions moved, seconded, and called for roll call vote, DiPaola asked Doug Doyle, the borough’s redevelopment attorney, whether “the sellers” were on board with the MOAs.
Doyle reported he had received emails from JMF indicating that they’ll sign and from the office of De Angelis, whose clients “asked us to sign this.”
He said, “The agreement is in a form acceptable to them because they sent it to us, and JMF has indicated to me today that they’ll sign it, and I’m recommending that the governing body authorize the mayor to sign it.”
DiPaola pressed on, referring to matters just discussed in closed session.
“Some of the stuff you don’t want public. I’m very uncomfortable with a lot of the language that we discussed in that room,” she said.
She said she received her copies of the MOAs at 10 minutes before 5 p.m. and has “a very big trust issue about the real purpose of the borough being the first to sign the MOA.”
She added, “There is no agreement between the property owner and the developer. I really just don’t have enough information. Because I didn’t see all the emails that went back and forth in the scurry to get this done. I have a problem with it.”
Then she said, “We have to make an agreement with the Land Use Board. Can I say that in open? We’re going to make an agreement with the developer that I don’t agree with.”
At that, Lamatina put in, “These are closed-session questions; they should not be… unless you want to go back into closed session. We need to focus on the agreement and the resolution. So there’s a motion and a second for the resolution.”
According to the resolutions to sign the MOAs, “The parties have agreed to terms and conditions to resolve the designation challenge and arrange for the sale of the property.”
The MOAs say the property owners are being paid a nonrefundable 5 percent of the purchase price in exchange for agreeing to drop pending court cases and not speaking out against the project.
The MOAs also say that purchase/sale agreements (PSA) allow for due diligence periods of 30 days—after which a second nonrefundable 5 percent of the purchase price is due the sellers—then set a 60-day deadline to close.
ERUR may terminate the PSA up to the end of the 30-day due diligence period.
The owners, after signing the MOA, may still walk if the developer seeks a reduction in purchase price, if ERUR fails to make the second deposit, or if ERUR fails to close the deal within the 60-day closing window.
Should the deals fall through, Emerson nevertheless still agrees to rescind its designation of the properties as an area in need of redevelopment and the designation of the property as a condemnation redevelopment area.
On Oct. 16, Lamatina signed both MOAs eagerly after the vote. In his statement two days later, he called it “an outstanding development at Tuesday night’s Emerson’s Mayor and Council meeting.”
Set-aside approach ‘a sham’
De Angelis said in late February, following the council’s Feb. 6 vote authorizing eminent domain, that the borough had been arguing erroneously that condemnation is applicable because the redevelopment plan was amended to include affordable housing.
“The borough’s affordable housing argument is nothing more than a sham to try and take private property for a redevelopment project (long championed by the mayor) without having to defend against my clients’ legal challenges to the redevelopment designation,” he said.
De Angelis argued that the Local Redevelopment and Housing Law, which the borough cited in its vote allowing eminent domain, prohibits a municipality from acquiring a property by condemnation while a legal challenge to a blight designation is pending.
The Fair Housing Act, which the borough also had cited as rationale, does not authorize the town to take private property and turn it over to a private developer, despite the affordable-housing set-aside, De Angelis said.
De Angelis told Pascack Press at the time that should Emerson prevail then it would be that much likelier that redevelopers across the state would be able to snap up land for profit through eminent domain ordinance, which authority derives from the legislature and is not intended for this use.
Lamatina, asked for comment at the time, speculated that the owners were holding out for more money.
Owners had spring setback
In May, Superior Court Judge Gregg A. Padovano found in the borough’s favor after the owners claimed they were entitled to see written interactions between the mayor, planner, and borough lawyers with the redeveloper before the planner’s report on alleged blight was completed.
Padovano said that, “While Plaintiffs’ allegations regarding whether the proper procedures may prevail, that ultimate issue has yet to be determined and is left for trial.”
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