City Declares iStar Financial in Default - Gives them 10 Days to Respond

AP City Council Declares iStar Financial in Default on Waterfront


Financier has 10 Days to Respond to Resolution

City Introduces Bond Ordinance for $250,000 Legal War Chest

City’s First Staff Planner Since WRA Prefers Multiple Developer Effort

Welcome to Asbury Radio’s Reporter’s Notebook, where corrections, clarifications, spellings are not only welcome they’re sorely needed!!
Council meeting –

Councilmembers: Sue Henderson, Jimmy Bruno, John Loffredo, Mayor Ed Johnson,

In attendance Pat Fasano, Vince Gifford, Rich and Johna Karpinsky, Arocksy Gokberk


Dec. 7th – special mtg single issue mtg

Two Actions – resolution and bond a ordinance

Glenn Scotland – aprx yr ago istar forclosed on the interests of asbruy partners and took over that interst by virtue of AP’s failure to abide by its interests. At that time…based on rep of istar at that time/ redev com and hastie, Scotland, aaron met w/ istar to determine plans for mvg forward w/ waterfront/ mtgs w/ city mgr reidy to meet w/ sugarman and other reps istar, wkg on ap matter.

As you are aware based on reporting we’ve givn you over the pas tyr very little dev by istar, consertnation on part of all, belief by us and others on dev comm. Dlg w/ istar, city on verge of missing next dev cycle, as a resultthis occurance and various..u asked us to explore whatvever rights city has…toward that edn w/ mr aaron prepared resolution, which declares istar in default on its agreement of oct 2002,

Tk certain steps to resolve…resolutions has where as clauses estb history of dev ap from execu amened extended rev agreement to various sub dev brought to table by apartners, where we are in …in accord w/ redev and hsg law and plan

First fault mentioned is 6th av reopening default, first set under redev agreement, master dev thru istar has indicated it is unwilling or unable to acquire prop to effect 6th ave ereope due to cost of the propery. That’s a mat’l default. Not subject to ? under terms of agreement
Infrastructure default is second – 2 components. Infrastructure incomplete by partners, signif deficiencies, not demons ability to cure or correct those deficiencies, not satisfied,

Phase 2, 3, 4, infrastructure needs to be completed on wtrfrnt/ hrd repeatedly cost of completing is something istar or apners capapbe of doing, that wd be default of agreement/ abandonment default, various components to that, reflects failure of dev to carry forth eminent domain proceedings, been in process, city was directed to terminate and other ED proceedings not initiated. Had effect of holding certain prop owners captive to agreemtn / also prop hv been acquired, after w/in 12 mos must design subdev to commence…not happened/ also to acquire prop it had right to acquire/ constitutes abandonment of project and something not subject to cure.

Last of defaults relates to obligations to partic in plan amendments to affect plan on waterfront, 1 yr to 10mos ago sammett tried to plan recognize what going on in economic financial community, recog those changes submit modif to the plan for comment by istar, none made, they had obligation to wk in good faith w/ city, in modifying amending plan to wk w/ city.

Resolution w/ req add’l info as to discovery / resolutions set forth, authorize attys to proceed effecting terms of res, for city to exercise its rights under terms of this agreement

Mayor –‘

2 sections – u said not subj to cure, cd u elaborate.

Redev agreement contains arbitration provision, for disputes under an agreementin event of a default cd tech fall w/in…arbitration only mks sense in cases where capable of cure/ in res they’re not subj to cure so arbitration wd not be appropriate. Comments hv not been substantive, nor productive/

No other comments from council –

Resolution is read by Clerk/ declaring iStar/Asbury Partners in default

Aaron adds –Wants to point out the cooperation between your litigation and redev counsel - 100% in lockstep/ at direction of council and recommendation of…this action is being taken becz of city of Asbury park’s action to move the city along, any dev out there who wants to come into /…so when economic cycle returns / history says during 01 and 04 too much time wasted in litigation/ apprg what was done in 2000… city doesn’t want or need to be its enemy/ city is saying it is prepared and willing and able to do what it has to for the people of Asbury Park

Bruno – we hv watrfrnto desperate for redev, we hav to catch the next redev wave, if not get out of our way, have to be ready have to move forward…people who’ve been held back from revnues.

Henderson – not taken far enough so I’m supporting this

Loffredo – people who wanted to take action months ago, we negotiated in good faith, had our cards on the table jst not enough.

Mayor – not about going after spec company or individual, our business owners hv waited, waited and waited some more, the time has come… All YES

Bond Counsel – Glenn Scotland –

Taken certain $250k / authorize bonds to pay costs thereof, under redev hsg law for redev expenditures related to advancing redevelopment activities, litigation, arbitration, This bond ordinance will be less costly, he said, because redevelopment base puts it under the State’s local redevelopment and housing law, which means the city won’t pay the usual 5% down payment to borrow. entire am’t…? inaudible
   [Scotland said later that the legal costs of floating the loan would probably come to no more than $1200. Scotland said the City had to secure the financing so that it can be sure it's able to support its contractual interests through legal means.The City is dependent on Asbury Partners, now iStar, for payments on other bonds taken out to fund projects the developer was responsible for. Scotland said to the best of his knowledge iStar is up to date on those payments.]

All yes

Public Portion

Donna Rendeiro – Dir of Community Planning for NJ Redevelopment Authority (in but not of the DCA (Dept of Community Affairs) We’re here to support Dir of Community Planning, tech assistance, with Tom Neff, Dir local assistance, now is the time and here to help any way we can

Topek, Stan – Adriatic – bought business 12 yrs before dev started in AP, like to know how to get a ltr to be carved out so can prove I’m out of this business/ I cd hv sold 10 times, need ltr from city so if I sell my bus can sell to someone else to mk success in AP/ time to retire after 45 yrs in business in AP/ I’m freed to sell

Fasano, Pat – 1001 Grand, a downtown developer

I went on iStar’s website today -  can’t come up w/$500k? -  Site said company has $1.12billion in unrestricted cash /iStar repurchased $1.1mn shares of its own stock, IT had a $1bn loan that balloons in june, so they repaid it off in cash/YET they had to ask me for money to knock down the boarded up houses in AP. They said they couldn't afford $? to knock down some boarded houses.
David Benson –back in jun of 08 flood destroyed bldg. istar pulled our permits and issued… that we didn’t hav right to permits, 2 yrs prob and $100k in legal bills later, we’ve gutted building, redone, they totally blew us off, we’re lkg for now that istar is going by wayside, we’d like to attribute back to city a good building that can///unless we hv to go thru qualifying to be a sub redev/

Rita – jst last week knocked down 4 houses and a church/ how do we let them do that when they were going to do this? This has been going on. You hav to stop knocking down properties/ eventually was the demo guy’s answer/ who ever heard of knocking down a church?

Why are you issuing them permits to knock down properties when you know what state they’re in?

Reidy – city doesn’t hv right to say can’t knock down property. First I agree w/ you.

Bruno- I woulda done it.

Reidy – there’s a difference between the legal right and what you can speculate

Rich Karpinksi - thank you for finally doing the right thing / dragged us all along developers, contractors, realtors

Owners, tax payers, deeming APners in default – does that mean city can take back all redevel rights, what does that mean?

Reidy – process, first is to issue letter, then 10 day period as per agreement istar has to respond, say respond in way doesn’t meet city’s concerns, that’s when legal action begins for istar to step up or city take or sue for its redev rights/ this is first step for process to begin/ what is status of prop in redev zone/ we’re supposed to be moved, Samantha garvis says doesn’t hv the money/ tk away redev rights/ that’s what needs to be done/

Reidy – anytime iStar can come back to table/ lot of allies to this/ properties istar doesn’t own, like Stanley can give him ..

Mayor – not intention of council to create another drawn out process, we‘d rather hurry and get on with it

Rich – It’s time to cut these guys off/

George Kary 207 6th av

In ref to infrastructure, bad shape, been that way 20 yrs, what’s timetable, who will pay?

Reidy -

Councilman Bruno has talked about same issue for lst sev’l mons. Trugh is don’t hv a date/ we hv to get our hse in order in terms of dev

We decide how to spend our tax dollars/ we don’t wnt to spend ours on respon of dev/ if city ends up w/ dev rights that would provide money to make those improvements.

Adjourned.

Don Sammet (Reidy announced Sammet was going to explain the status now of land owners, but another member of the public wanted to speak and Sammet never took the mic.)- Sammet later told Asbury Radio that people like George Kary and his mother who own two houses between them in the redevelopment zone and Stanley Topek who owns the Adriatic Restaurant in the zone are still subject to the elements of the plan in place - including eminent domain. “The redevelopment plan and agreement are still in force as adopted. This is an attempt to effectuate change. Plan is still in place.” The actual waterfront plan needs to be amended and one of those issues is taking properties off eminent domain, he said. Asked if the City would amend the plan to reflect resident interests and desires or wait until another developer is found and amend the plan to satisfy it, Sammet said, “A developer? I wouldn’t recommend that.” Sammet, who was hired after the plan and original agreement were adopted, will get his first opportunity to leave his mark on a revised or replaced plan. And Sammet’s desire is for the city not developers to amend the plan and contract with multiple – not a single – developer.