Newark - Ledger - Judge suspends bargain sales of Newark's land

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Published in the Star-Ledger, Thursday, June 1, 2006

Judge suspends bargain sales of Newark's land

Thursday, June 01, 2006

BY JEFFERY C. MAYS AND KATIE WANG
Star-Ledger Staff

In response to a lawsuit from Mayor-elect Cory Booker, a Superior Court judge barred Newark yesterday from selling city-owned land, saying sales since the May 9 election "squander public property and resources to benefit private interests."

Judge Patricia K. Costello, sitting in Newark, prohibited all non-auction sales of publicly owned land until June 15, when Booker and attorneys from the city are scheduled to appear in court.

The city also was prohibited from finalizing the handover of land sold since May 9, according to the restraining order.

Booker said during a news conference at a vacant lot on Miller Street: "We've seen a rush to give away land. They've been coming in and taking land. These last-minute-buyer sales are so corrupt that it has to stop."

The city council, acting on proposals from the administration of Mayor Sharpe James, has approved at least 15 proposals to sell land at the city minimum of $4 per square foot, well below market value, since Election Day.

Many of the developers are supporters of James and the council, and some have contributed money to the campaigns of the mayor and various council members.

Nine developers are named in the lawsuit, in which Booker charges the city council and administration violated the state ethics law that prohibits those who contribute more than $300 to a candidate from receiving contracts above $17,500.

The $4 per-square-foot sale price of the land is not "reasonable" given the value of land in Newark, the lawsuit claims.

Furthermore, the redevelopment laws the city is using to justify assigning the land to specific developers, rather than publicly auctioning it off, was misapplied, the suit charges.

James, who declined to run for re-election, described the ruling as the "pinnacle of judicial and political ongoing interference with Newark's and any municipality's right to govern itself," and he vowed to fight it.

First Assistant Corporation Counsel William Schwartz argued the city's case in court and complained of short notice. He said the city ultimately will win the case.

Councilwoman Gayle Chaneyfield-Jenkins said, "I'm in total shock and awe that we would not have some type of discussion with the incoming mayor."

Councilman Hector Corchado said he believes the land sales are benefiting residents by putting vacant or dilapidated properties back on the tax rolls. "You look around and see that there used to be so many vacant lots," Corchado said.

Land-use expert John Buonocore Jr., a partner in the Morristown law firm of McKirdy and Riskin, said Costello's order was unusual but the judge "must have seen something."

Since the election, the city has authorized the sale of land to companies owned by basketball star Shaquille O'Neal and local developers such as restaurateur Jose Lopez. O'Neal, a Newark native, is promising two major upscale condominium developments.

A company led by the Rev. Levin B. West, a supporter and campaign contributor to James and some city council members, also purchased land. Booker's court filings claim West's purchase violated the state law against "pay-to-play."

Using the state's redevelopment laws, Newark last year declared the entire city to be an area "in need of rehabilitation," a declaration that allows officials to transfer city-owned properties to hand-picked developers instead of putting the properties up for public auction.

For decades, Newark's redevelopment strategy had been to declare specific areas to be "in need of redevelopment." Such areas have to meet several criteria, including unsafe and dilapidated buildings, under-used land, and abandoned commercial or industrial areas. Applying the "rehabilitation" designation instead to the entire city allowed officials to use more-general criteria.

"The whole notion is to incentivize development to occur in a short period of time," said city Business Administrator Richard Monteilh. "You auction the land and the winner might hold onto it for 10 years for a better price."

City residents and activists opposed to the land sales have complained of the lack of an updated master plan, questioned the quality of the homes being built by the land purchasers, and claimed that only developers with political ties are chosen.

Council President Donald Bradley said yesterday that when Booker was a councilman he voted to approve the sale of land at the city's then-minimum of $1 per square foot. The minimum price was later upgraded to $4 per square foot. A Star-Ledger survey last year found the average sale price of privately owned vacant land in Newark was $29.50 per square foot.

Booker acknowledged his votes but said conditions have changed.

"The practices we had 10 years ago are no longer needed," he said. "The price they (developers) are getting is not based on rhyme or reason. It contradicts good sense and good judgment."

Jeffery C. Mays covers Newark City Hall. He may be reached at jmays@starledger.com or (973) 392-4149.

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