NORWOOD, N.J.—Only two options exist for Norwood to get the decade-long unfinished Livingston Street development project completed: declare the developer in default of its performance bond or sue the developer for violation of its developer’s agreement with the borough.
That’s what about 80-plus residents heard from Mayor James Barsa and Planning Board attorney and special conflict counsel Robert Regan June 24 at a special town hall meeting.
And, by the way, do it before Jan. 1, 2020, when the performance bond’s insurance amount of $1,719,146 expires, since it’s less than certain that the developer, Daibes Enterprises, will renew the performance bond, said the attorney.
Originally occupied by the former Cost Cutters, the project at 521 and 525 Livingston Street is less than half completed after its initial approval in December 2010, and following revisions, received its first construction approval in July 2012.
On June 26, the borough council approved a resolution declaring default on the project under the developer’s agreement, and initiating legal action against the developer’s performance bond insurer, Liberty Mutual. The default resolution cites the developer for failure to perform work since March 29; failure to maintain the property; and alleges that such failure “has created threats to the safety of the public and general welfare.”
Unfortunately, the performance bond cannot be used for finishing construction on the existing site, residents were told. The performance bond escrow is insured by Liberty Mutual, said Regan.
Notices of violation
Regan—a four-decade land use attorney and affordable housing special master—said 38 notices of violation were issued to the developer in 2019 alone.
Regan offered to provide copies to any resident interested in seeing them. One resident suggested issuing more summonses to compel the developer to complete the project.
The property at 521 Livingston Street, a mixed retail and residential building, was purchased by Norwood Municipal Judge Robert Travers from Daibes Enterprises in 2016 and received variances from the Zoning Board to build second-floor apartments instead of initially approved office space.
Travers had served as attorney for Fred Daibes of Daibes Enterprises and a Norwood municipal court judge.
Construction on 521 Livingston Street is nearly complete but without completion of a site-wide stormwater detention system, which has not started, that project cannot open, borough officials said.
The property at 525 Livingston Street is owned by Daibes Enterprises, where no work has occurred since March 29.
The existing site consists of partly finished apartments over unfinished empty ground-floor spaces, with much debris, dilapidated fencing and assorted garbage strewn about the site—marring the borough’s upscale downtown district.
Daibes in legal trouble
Daibes, an embattled Edgewater developer, has been in legal trouble for years. Last year he was indicted on federal bank fraud and conspiracy charges, and a few months ago he was ordered to pay $1.7 million in fines to state environmental officials. In May, the Daibes foundation was sued for $2.7 million for failing to construct 20 affordable housing units in a 140-unit, 16-story multifamily high-rise building in Fort Lee.
At a town hall-style meeting June 24, Barsa and Regan took turns answering questions from a couple dozen residents who questioned everything from the town hall’s timing, why nothing was done when work at the site stopped repeatedly over the past decade, and what the borough will do to force the issue. Barsa promised to hold further town hall meetings to discuss the issue with residents.
Barsa said he would request the council approve the resolution to notify the performance bond company that the developer is in default of its bond.
The next step would be to initiate a lawsuit against the developer if nothing occurs as a result of notifying the bond company, agreed Regan and Barsa.
The best case scenario would be if the legal pressure applied could push Daibes Enterprises to sell 525 Livingston Street to another developer, who could complete the project, said Regan.
Regan said declaring the developer in default of its performance bond, as well as a lawsuit, puts the pressure on the bonding company and developer to either complete the work or “flip the property” to another developer.
‘It’s a nightmare’
“I think we all agree, it’s a nightmare that we want to go away and we’re doing everything we can to make that happen,” said Barsa.
Regan noted any developer purchasing the site can continue with construction as the preliminary and final site plan and variance approvals continue with the new owner.
“I think everyone in this room would like to wave a magic wand to get this project done,” said Regan, noting up to nine years of frustration with the developer.
He said the 38 summonses for construction violations are being heard in Passaic County Central Municipal Court because Robert Travers—owner of 521 Livingston Street and a local judge—was deemed by Bergen County courts to have a conflict, and the matter was transferred to Passaic County.
“I think you have to turn up the heat on this developer to get things done…The time to move is now,” said Regan.
‘Misinformation’ cited
Barsa said the June 24 meeting on Livingston Street was called because much local misinformation exists on the project, plus the bond expiration date is coming soon and Daibes Enterprises’ “current situation also gave us reason to move a little quicker.”
Both Regan and Barsa stressed the year-end deadline for putting pressure on the developer via the performance bond and hoped that might lessen the need for a lawsuit against a developer already being sued by multiple aggrieved parties for developments and alleged fraudulent activities.
Responding to a resident, Barsa said he has “no relationship” with Daibes Enterprises, and said he knows Travers because their daughters are best friends.
Barsa said he had “zero dealings” with Fred Daibes or any of his companies.
Barsa told residents of several projects that have languished without being finished for over a decade in Norwood.
‘Worst of them all’
“Unfortunately, the Livingston Street project is the worst of them all. It’s right in our downtown in the heart of our community and it’s terrible,” Barsa said.
He said just because a developer gets an approval doesn’t mean they have to do it.
Barsa attributed the project’s delays to developer “hardships” as well as “legal issues and getting power to the site.”
However, he added, “That doesn’t excuse the developer from getting it done.”
Another resident suggested putting the developer’s performance agreement on the borough website as well as proposed possible legal options against the developer. Barsa said he would consult with counsel to find out if that is possible.
A Democratic mayoral candidate, Annie Haussmann, said after the meeting she felt Barsa was holding a meeting because she has been talking about the issue and it was the key issue that motivated her to enter the race.
She questioned whether the property had been sold and Regan said while he was not aware of any new owners, both the land use approvals and developer’s agreement would still be valid for a new owner if there was one.
‘Low on the totem pole’
One resident asked, “Aren’t we pretty low on the totem pole?” with regard to getting Daibes Enterprises to finish 525 Livingston St.
“I would have to agree with you,” said Barsa.
Barsa said “we want to put as much heat on” Daibes as possible to sell the larger, unfinished property.
Barsa said the two buildings—521 and 525—comprise one site and unless a stormwater retention system is built on the site, as required by the site plan, neither property can open.
That remains a holdup for the nearly finished 521 Livingston St. property.
Regan said he “does not recommend litigation very casually” against Daibes because of cost, time and potential outcome.
He said a lawsuit could be filed in Superior Court Law Division and the best outcome would be both the developer and bonding company would be defendants.
He said “maybe” the lawsuit would cause the bond company to “turn the heat up” on Daibes Enterprises.
Several residents questioned why the meeting—attended by at least 80 residents—was not better publicized as they only heard about it via social media messages.
Barsa said the meeting was noticed on the borough’s website and Facebook.
Northern Valley Press could not find a calendar listing or separate listing on any portion of the website, though Facebook mentions were found.
Barsa said he may use Nixle to advertise future meetings.
Outside Norwood Public School, the electronic message board did not advertise the meeting but featured outdated school announcements.
Also attending the meeting were Robert Travers, and Council Members John Mooney, Thomas Brizzolara and Anthony Foschino and Democratic council candidate George Santiago.
