News

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!’

MILE SQUARE VIEW EXCLUSIVE

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.

© 2010 Mile Square View.  All rights reserved.

Leave a Reply