Thursday, February 17, 2011

City Presents Strong Argument for Waterfront Rights

The Bon Mots Flew Over Freehold Today

The City's attorneys Jimmy Aaron and Bill Northgrave, of Amsel Aaron & Grimm, presented the City's case before Judge Lawrence Lawson today, for why it should withdraw the waterfront redevelopment rights from Asbury Partners, the master developer that has been replaced by its lender, iStar Financial.

Aaron was in top form as he waxed lyrical at times poetic. He painted the judge a portrait of a cleared landscape from Deal Lake Drive south to Kingsley and Ocean Avenue, having been fully acquired by Asbury Partners, including the second, third, and fourth blocks, too, yet none of it developed -- with the exception of the three fast track subdevelopers and the Wonder Bar and the Stony Pony. There had been no "ground up" development since, despite a deadline of 12 months, according to the agreement, to develop or find a subsequent redeveloper. Several times the team of Northgrave and Aaron stated that Asbury Partners had failed to perform. In referring to the replacement of iStar a lender, Aaron noted, "So all efforts of Wall Street come to Main Street have failed." Yet, he pointed out, redevelopment directed by the City -- without the master developer -- in the downtown and West Side is "flourishing".

Aaron acknowledged the impact of the 2008 economic crisis on access to capital, timing the market, etc. But the economy is not included among the events in the force majure section of the redeveloper agreement between Asbury Partners and the City. So the City was asking the judge to refuse the Partners' request to have an arbitration hearing and return the development rights to the City. The arbitration would mean, if the Partners were found to be at fault, as the judge pointed out a six month period before they or a subdeveloper would have to begin construction.

The Salvation Army building was mentioned several times and Teischer an owner was present in the courtroom. Aaron said the building's value in 2004 was $5 million but had dropped to $1 million while languishing under the Partner's right to acquire the site and to deny the owners the right to develop it. He ticked off several sites the Partners could have acquired, but haven't - the Karpinski's property, Asbury Lanes, the two Sewell houses, noting that one is owned by a 95 year-old woman ( Aunt Angie, immortalized by her niece's documentary, "Greetings from Asbury Park" by Christina Eliopoulus'). All this while the Partners have "Created illusions of fact," said Aaron.

Yet, "like the fable of the Emperor's New Clothes", Aaron said the Partners failed to give any financials or any proof of a plan to do this.

The City stopped actions by a developer to who wanted to develop property he owned in the zone, said Aaron, referring to Vince Gifford, in order to accommodate Asbury Partners. But the Partners have failed to take Gifford's properties under eminent domain, consequently tying them and the City up in limbo. "If they have the money and the resources," asked Aaron, "Where have they been?"

According to the presentation by Aaron and Northgrave, the Partners received $16 million from Paramount Homes, Metro Homes and Charles Kushner. If the City gets its development rights back that won't prevent the Partners (iStar) from developing the acres it will retain ownership to.

"The City's grand experiment to try to get redevelopment on the waterfront is failing," said Aaron, because there aren't more taxpayers on line, visitors drive by vacant buildings, and worst yet, the Partners are tearing down ratables the city could be collecting taxes on. "Asbury Partners has refused to go forward with the agreement and admitted it can't go forward." On the other hand, Asbury Park has to move forward because it's losing its aid from the federal and state government. "If iStar is not part of the solution," he said, "it is part of the problem."

Arguing for Asbury Partners (iStar), Gage Andretta of Wolff & Samson, of West Orange and NYCity, argued that the City needs a master developer, to which the City's director of redevelopment, Don Sammet shook his head in the negative, that they've hired a planner to move forward on an unidentified site in the development area and that they have a right to go to arbitration. At the end of the arbitration period then the Partners can decide if they want to cure the situation, said Andretta.
At this Judge Lawson questioned Andretta about his reference to a cure and why he would go to arbitration, but it was difficult to hear. The judge explained the City was afraid of ending up in a protracted suspended development, as happened with developer Joseph Carabetta. At times it seemed Andretta was trying to rid iStar of the burden of finishing the the other half of the infrastructure work. He also said, "You can't prove that's what we've tried to do," which I believe referred to accusations that they're trying to stall until the markets come back. But it sounded confrontational.
Judge Lawson said that 180 days would amount to six months, taking them to September, end of the building season, and if there's another cold early winter..."So you're saying you won't make a determination unless...," then it was inaudible again.

"We intend to cure," said Andretta.
"The road to purgatory is paved with good intentions," said Aaron.

Judge Lawson ended the meeting saying that he would reserve his decision until he's gone over the statements and written his opinion.
In the audience were Mayor Ed Johnson, Deputy Mayor John Loffredo, Asbury residents James Henry and Joyce Grant of the Oceanfront Preservation Coalition, the City's other attorneys Glenn Scotland, Tom Hastie and Fred Raffetto.

All for now...

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