Wednesday, August 11, 2010

City Resolution spells out developer "sabotage" on Municipal Garage

MG Resolution on Hakemian

The above is the complete resolution passed by the City Council last night and also the legal documentation attached detailing numerous problems by the developer, SHG leading into the closing date of August 13th.

City to Developer on Municipal Garage - See ya!

City of Hoboken announces:


Last night, the City Council voted 5-3 to terminate an agreement with SHG Hoboken Urban Renewal Associates, LLC, (SHG), an affiliate of the S. Hekemian Group, to sell the municipal garage property after carefully deliberating the issue in closed session for nearly 4 hours. The decision was made necessary by a series of deliberate and threatened actions by Hekemian which began immediately after their demand to significantly reduce the effective purchase price was rejected by the City in June. Their actions clearly demonstrated that the developer had no intention of closing despite their public statements to the contrary.

Referring to the downturn in the real estate market, SHG requested changes to the terms of the agreement in June that would have cost the Hoboken taxpayers $1 million annually, and eliminate the obligation of SHG to construct affordable housing units. After the City Council rejected the proposal, the developer began taking actions, in violation of its agreement with the City, to prevent Hoboken from receiving its environmental approvals.

“Unfortunately SHG’s behavior changed immediately after the City Council and my Administration rejected their unfair proposal that was clearly detrimental to Hoboken taxpayers. The record clearly illustrates that after their proposal was rejected they went from being a partner acting in good faith to behaving in a very different way in violation of their clear contractual obligations,” Mayor Zimmer stated. “We did everything we could to prepare for the closing, including moving the garage and performing additional environmental activities, and we will continue working with the DEP to meet all of their concerns so the property can be sold to a responsible developer as soon as possible,” Zimmer explained.

SHG had the opportunity under the contract to conduct its own environmental sampling and testing for six months ending in August, 2008, but did not do so. Only after having had its proposal to amend the agreement rejected, did it attempt to do its own sampling that was not permitted under the contract.

“I want to thank the DEP for their responsiveness to the City of Hoboken’s application,” Zimmer said. “We will continue to address any issues of concern and work towards obtaining environmental clearance as quickly as possible.”

Notwithstanding the City Council’s termination of the agreement with SHG, the City will still be able to repurchase the garage from NW Financial using the low-interest bond that was previously approved by the City Council. As a result of this repurchase, the City’s costs for the Observer Highway garage will be reduced from approximately $100,000 per month to an estimated $20,000 per month. At tonight’s meeting, the City Council will be asked to approve a shared services agreement with Weehawken and the expenditure of additional funds to complete the environmental approvals with the DEP.

“I want to continue with the plan to ensure that the garage is located away from residential neighborhoods, moving the City toward shared services, and sell the Observer Highway Municipal garage site as quickly as possible to a responsible developer,” Mayor Zimmer explained.

Hoboken411 - another smear kaput

When it comes to the battle between reason and the voices in your head and an angry minion, you should probably try to side with reason. It's usually less embarrassing that way.

If a Hoboken resident wanted to have a fun website pointing out the vapid stupidity of the uptown smear merchant at Hoboken411, they'd never be short of material. As it stands, Da Horsey will on occasion point out the most glaring examples of misinformation pouring forth from that site on a regular basis. (We'd say daily but we hardly go there but every month or so.)

Several readers contacted us on a former Hoboken City Council candidate getting into trouble with the law and one submitted this nugget, the latest saga in how the voices in your head combined with your not too smart minion can get you into trouble:

Allies of Carol Marsh and Michael Lenz supported Foley on the streets and in the comments sections of Hoboken411 during the runoff. Foley may have edged Noonan out simply because he shared his name with a popular member of the Elks Club who also runs Senior Services for the city. The Villanova-educated attorney has since been known as “the other Tom Foley.” - Hoboken411

In the interest of fairness, we're going to try to let Perry Klaussen down easy on this one. MSV is less concerned about the death spiral of Hoboken411 than Oscar, a poor innocent dog. Breathe deep and don't take the purple pill Perry. Here's how wrong you got it.


Carol Marsh announced her choices for City Council in the 2007 City Council elections in a letter to the editor published in the Hudson Reporter. One could reasonably guess she expected her "allies" to do likewise. Here is the City Council President's from May 2007 letter in its entirety.

Dear Editor:

For over 20 years I have worked for reform in Hoboken as an activist in the community as a member of the city council and as a mayoral candidate. In every role I've tried to understand and support all residents of Hoboken as we work together to improve our community. It has often been a difficult road, but in every case I was surrounded by people who believed that citizens, working together can make a difference in the way that the government affects our lives.

In one or another of those roles, I have worked with or against most of the City Council candidates. And so, in the past few months many people have asked my opinion concerning the candidates in the council elections on May 8.

I have replied by asking them to please come out and vote for Ron Rosenberg in the 1st Ward; Beth Mason in the 2nd; Frank Raia in the 3rd; Dawn Zimmer in the 4th; Peter Cunningham in the 5th and William Noonan in the 6th.

Many of the candidates I'm supporting have worked as volunteers in the community, speaking out for improvements in government operations and transparency, for care in budgeting, for open space and against the kind of unplanned, unchecked development which is eroding the quality of life for all of us. All of these candidates have reached out and supported good candidates. All of these candidates represent a positive change in the city council, and it's time for a change. And all need your support. Please make the time to vote this Tuesday.

Carol Marsh

Perry have you given thought to having Oscar your dog doing the ghostwriting on Hoboken411? He certainly can't do any worse.

Now who do you think fed this latest hatchet job to Das Klaussen? Oh what a web we weave when our aim is to smear.

City tells Municipal Garage buyer - 'Yer Out!'

Last night's emergency meeting was a drawn out affair with much of the work going on in closed session with legal parameters surrounding the Muncipal Garage's closing that wasn't going to happen Friday.  After close to three hours the doors opened with Corporation Counsel detailing little other than laying the groundwork for a brief discussion and vote by the Council on declaring the developer, SHG in breach of the agreement and terminating the relationship in a 5-3 vote.

It was clear most Council members felt handcuffed in the discussion before voting on the legal maneuver.  If that wasn't going to make it more difficult for the public to understand the question of declaring the developer in breach, much of the comments weren't going to be of much help either.  

A faction of the Council of No typically Council members Theresa Castellano, Beth Mason and Mike Russo didn't take shape in its original form, but Nino Giachhi did a fine rendition replacing the absent Terry Castellano.

Here's how the kabuki theater shaped up.  On one side concerns about legal strategy but a clear position accepting that earlier actions by SHG constituted interference and an outright breach on the agreement leading into any August 13th sale.  On the other side, an opportunist political card to pretend the developer would actually show up with a $25 million dollar check on a deal they were begging out of earlier this year asking for all kinds of fundamental changes including tax breaks that was rejected out of hand by Mayor Zimmer and then separately by the City Council as the redevelopment agency.  

So if you thought the loyal opposition was going to act more responsibly after the notorious grandstanding and misinformation earlier on the Muncipal Garage you'd be once again mistaken.  The worst of it however came from Councilman Nino Giachhi who threw in against not only his 6th ward constituents but Hoboken overall.   

Nino Giacchi buying what the developer isn't paying - lock, stock and barrel
Councilman Giacchi bemoaned the loss of the developer's $25 million offer, something no one believes would happen.  For this phony stagemanship he was taken to the woodshed and called on the carpet by his colleague Councilman Ravi Bhalla, albeit in a direct professional challenge.  As both are lawyers, maybe it was the shock of seeing a bright, intelligent counterpart take the absolute worst public position possible.  

The question we have for Nino Giacchi: is he representing SHG or just taking the low road after a long day and joining in with Councilman Michael Russo?  At least the latter is forgiveable but only until election time which for Nino will come next spring.

MSV's exclusive story below the end of June shows the heart of the matter here and foreshadowed the City's eventual position.  The relationship with SHG was deteriorating and the closing itself being sabotaged for a while and from a legal perspective, that letter forms the basis of what constittutes the City's position in the inevitable battle - a battle that will most likely end up being about the developer's initial $2.55 million deposit.  Expect lots of drama and wild claims in legal soundbites designed to scare the public.  

In the end, it's probably more about the battle over the deposit than anything else.  SHG will probably attempt to say their actions leading into the closing date did not constitute bad faith but they'll need to convince a judge.  It's merely a legal position.  They weren't coughing up $25 million on a property now worth about $10 million less.

The City in the end regains ownership over the Municipal Garage and is now in the driver's seat.

Talking Ed Note: Councilman Giacchi isn't just a lawyer.  He's bright and insightful and has the intelligence to act on any side of an issue with any number of reasonable arguments.  His inability last night to do so and take the absolute worst one, feigning belief $25 million was available from the developer this Friday was tantamount to betraying Hoboken.   

It was beyond disappointing.

Monday, June 28, 2010 

City tells Municipal Garage buyer - 'Butt Out!'


A letter from Hoboken's legal beagles replying to SHG, the potential buyer for the municipal garage - vehemently complains about numerous acts of interference in the city's efforts to fulfill its environmental compliance with the state before the sale.

The City of Hoboken, clearly not pleased with actions by the potential buyer of the municipal garage scheduled to close on August 13th cites numerous instances of interference with the work between the city and State of New Jersey.

In a letter to the developer dated June 25th, two curt words come through loud and clear on the the work underway for the state's environmental approval: butt out!

The details stated to the scheduled August buyer, SHG Hoboken Urban Renewal Associates, LLC spell out demands to stop repeated efforts to interfere and/or sabotage the City of Hoboken's efforts obtaining state approval from the Department of Environmental Protection (DEP).

Among the numerous complaints to the potential buyer (SHG) are:
  • no right "to confirm" the City meets its environmental obligations with the state
  • no right to conduct an "investigation"  on those city efforts as SHG suggests
  • a right to inspect the property visually but no additional soil testing
  • affirm the city's right to work toward meeting the state's environmental standards without interference
  • continued attempts to be on the site while the city works to meet the state standards
  • demands for soil samples now 50 days before the final transaction not in the contract
  • interfering with work currently underway
The city is warning SHG any conduct as stated in the letter constitutes a breach of contract and is placing SHG "on notice" for any such conduct in the future.

Talking Ed Note:  After reading the letter, does anyone think SHG plans to come up with the balance of close to $25 million for the Municipal Garage now valued at $14 million on August 13th?

Looks like their game plan is anything but and instead includes sabotaging the City's work to complete the DEP certification.  Read the letter for yourself:

Click on fullscreen to easily read the whole letter.

This is not the typical journey to a happy marriage.  It's more like a prenup combined with a divorce proceeding.

Related: Hoboken Patch attended and reported on the developments last night getting the sweet spot right on the disagreement.

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