The City of Hoboken is appealing a recent decision regarding Shipyard Associate’s attempts to develop residential buildings on a waterfront pier, known as the Monarch project, in place of promised amenities.

“Defending the City’s interests can require an investment in strong legal representation, but that investment is paying off,” said Mayor Dawn Zimmer. “We will continue to defend our interests, and in the case of the Monarch development, continue to fight to hold developers to their promises and protect our waterfront from inappropriate development.”

On Friday, June 21, Superior Court Judge Patrick J. Arre dismissed Hoboken’s complaint which sought a court order to enforce the Developer’s Agreement and compel Shipyard Associates to construct 3 tennis courts and a tennis pavilion on the North Pier. The City filed suit in 2012 in order to enforce the 1997 Developer’s Agreement between Shipyard, the Planning Board and the City that provided for the construction of a multi-phased, mixed use project along the waterfront, including over 1,000 residential units. According to the Agreement, Shipyard agreed to construct the tennis improvements as the last phase of the development.

But in 2012, Shipyard unilaterally decided to abandon the public recreational tennis use and replace it with two 11 story residential buildings, known as the Monarch project, on the pier in front of the Hudson Tea condominiums instead.

Judge Arre concluded that the Development Agreement could not be enforced by the City because it was dependent on the terms of the 1997 Planning Board Resolution. He ruled that a developer could seek to amend a planning board resolution, which, if approved would alter the development agreement.

Last year, the Planning Board denied the application of Shipyard to amend the 1997 Resolution. The Planning Board cited the pending lawsuit filed by the City which asserted that the City’s consent was needed before a change in the project on the North Pier could be considered. The Planning Board denial was without prejudice, pending the conclusion of the City litigation.

Shipyard countered with a lawsuit against the Planning Board, claiming that, under statutory law, an application which is determined to be complete by a planning board, but that is not considered after 120 days, is automatically deemed approved. The lawsuit against the Planning Board to determine the validity of Shipyard’s argument will now proceed. The outcome of that separate litigation will determine whether it will be necessary for Shipyard to proceed with the application to the Planning Board.

The Judge also dismissed Shipyard’s counterclaim which sought damages from the City and alleged that the City breached the Developers Agreement by filing suit and objecting to the Monarch project. He concluded that the City had a right to object and seek judicial review and did not act in bad faith in challenging the decision to replace the tennis improvements with the new towers.

Shipyard has financially benefited from development of more than 1,000 residential units on Hoboken’s Gold Coast and now seeks to renege on the agreement to provide the public recreation improvements that will benefit the people of Hoboken.

Mayor Zimmer has instructed the City’s special counsel to file a Notice of Appeal of the decision with the Appellate Division, in order to legally enforce the commitment of Shipyard to build the tennis improvements as a key feature of the massive Shipyard project and to prevent inappropriate residential development on the North Pier.

In a related matter, Mayor Zimmer has successfully lobbied for a critical change in proposed State legislation that would have overridden local laws and permitted residential and commercial development on Hoboken’s piers. The sponsors, Senator Sacco and Assemblyman Prieto, listened to Mayor Zimmer’s concerns and agreed to amend the bill to apply only to communities that choose to “opt-in” and authorize such development, something that Hoboken will not do.

In addition, the recent impacts of Superstorm Sandy on the City have demonstrated the need to prevent inappropriate development uses on the City’s piers. Mayor Zimmer will therefore pursue additional legal measures to protect against such development that exposes residents and property to hazards.