Monday’s vote, which came after a five-hour meeting, occurred on the Oct. 25 deadline Merrill had set for accepting or rejecting an out-of-court settlement.
By John Tredrea
The Hopewell Township Committee voted 3-2 Monday to accept Merrill Lynch’s proposed out-of-court settlement, which could allow 1 million square feet of office space to be built on 200 acres of company-owned land on Scotch Road.
In return, the township would be given 170 acres of Merrill Lynch land for open space preservation and a $250,000 donation for recreation purposes.
Voting in favor of settling the Merrill lawsuit against the township were Mayor Vanessa Sandom, Deputy Mayor David Sandahl and Committeewoman Arlene Kemp. The three said settling the lawsuit was the wiser course because an expensive prolonged court battle could lead to budget deficits that would force the layoffs of police and Public Works employees next year.
Voting no were committee members Jon Edwards and Marylou Ferrara, who argued that the township had a good chance of prevailing in court, and that the settlement was contrary to the intent of the Master Plan.
Monday’s vote, which came after a five-hour meeting, occurred on the Oct. 25 deadline Merrill had set for accepting or rejecting an out-of-court settlement.
Under the settlement, the township would restore office park zoning to 200 of the 440 acres Merrill owns west of Scotch Road and north of Interstate 95. A total 170 acres north of that 200 acres would be given to the township, for open space. Merrill estimates the value of that land at from $5 million to $15 million.
The remaining 70 acres of the tract, near I-95 and Nursery Road, would re- tain its current 6-acre residential zoning. Merrill also would give the township $250,000 for recreation.
One million square feet of office space could be built on the 200 acres that would be rezoned. Five hundred thousand of those square feet would be transferred from already-approved development on Merrill’s 400-plus acres on the east side of Scotch Road, also north of I-95. That land is the site of Merrill’s Southfields office park, the General Development Plan (GDP) for which was approved by the township Planning Board in the late 1990s.
Under that GDP, Southfields may include 3.5 million square feet of office space, 500,000 square feet of which can now be transferred to the west side. About 1.2 million square feet has been built at Southfields so far.
Merrill paid $12.4 million for the 440 acres on the west side in the late 1990s. The land had been zoned for industrial-office park use for decades. Shortly after Merrill bought it, the township rezoned it, first to 4-acre residential and later to 6-acre residential, sparking the 2002 lawsuit.
About 40 people attended Monday night’s meeting. Among them were about 10 Hopewell Township police officers and several employees of the township’s Department of Public Works. None of them spoke during the lengthy public hearing. However, after the committee voted in favor of settling out of court, the police and public works employees, most of whom stayed until the marathon meeting ended, applauded vigorously.
Mr. Sandahl said that going ahead with the lawsuit against Merrill could have forced the township to lay off police and public works staff next year because of a budget shortfall that could have approached $1 million. Under state law, municipal governments cannot operate under a fiscal deficit and must maintain a surplus in conformity with a formula set by the state. Mr. Sandahl and the township financial officer and assistant administrator, Elaine Borges, say that, under a new and more stringent state budget cap law, the most the township will be able to raise next year’s budget over this year’s is between $300,000 and $500,000.
Township downzoning defense attorney Howard Cohen, who spoke at length Monday night, estimates it would have cost the township $1.2 million next year if it continued fighting the Merrill lawsuit. Mr. Sandahl said laying off police and public works staff would be the only way to make up the budget shortfall that would result from keeping the lawsuit alive. "This is not a game," he said. "These are facts."
During the public hearing, former deputy mayor, Robert Higgins, scoffed at the notion that all the legal costs of the Merrill suit would have to be paid next year. He said the township could spread the cost out by bonding or by paying them with special emergency appropriations that would be spread out over five years. But Ms. Borges and township Planning Board attorney Edwin Schmierer said the state would not allow bonding or special emergency appropriations and that all the legal costs would have to be paid out of next year’s operating budget. The only alternative, Ms. Borges said, would be a special referendum that would seek voter approval to spend the estimated 6 cents per $100 of assessed property value on the Merrill suit.
Merrill spokesman Joseph Cohen said his firm would not extend the Monday night deadline facing the committee for deciding whether to settle out of court, nor would it sell the 440 acres for open space, as was proposed by township’s Environmental Committee chairman, Ted Stiles, during the series of public hearings on the settlement.
Before the committee voted, Mr. Cohen said the out-of-court settlement "is a reasonable compromise. That’s my candid opinion." He said that statement would not be admissible as evidence if the township decided to continue fighting the lawsuit. He noted that, even if the township won in court, an appeal would be inevitable, adding to the estimated $1.2 million tab.
"I’m not afraid of defending the township," Mr. Cohen said. "I believe the township has a good solid defense. But the proposed settlement is worthy of serious consideration because there comes a time in litigation when a compromise, involving an impact substantially less than would might have been, makes practical sense."
Almost all of the residents who spoke Monday night had spoken during previous public hearings. Continuing to back settling the lawsuit were Erwin Harbat, Sheila Beyer, former Mayor John Hart and others. Continuing to oppose settling with Merrill were former Mayor Kathy Bird, Mr. Higgins, Glen Carlton, Pat Szeiber and others.
Explaining her vote in favor of settling, Mayor Sandom noted the cost of the lawsuit and the resulting budgetary squeeze on the township it would bring.
"Some of you have raised the David and Goliath argument, that we should keep on fighting as we’ve done with others successfully in the past. The problem with this argument is that I would be spending other people’s money to fight that battle. While I might be perfectly willing to spend my own money on that fight, I’m not willing to shoot craps with the public’s money. Especially when we’re in such difficult financial times. Especially when Goliath is a Fortune 100 company with very deep pockets indeed. And they’ve given every indication they’re willing to take this to the end."
The mayor added: "I’m responsible for the health, well being and safety of all our citizens in these deeply troubling times, and I cannot ignore that going forward with this litigation most probably means that it will cost the jobs of many of our staff, with a resulting loss in critical services to our township residents."
Explaining his no vote, Mr. Edwards said: "This process has been flawed. There has been a rush to judgment." He said he is convinced the "township could win in court" and said the development Merrill could build under the settlement "is not the mixed-use our Master Plan envisions."
He said there would be "no sense of place" at the development on the west side as allowed by the settlement. "The most despicable part has been to play fast and loose with our employees," Mr. Edwards said. Addressing the public works and police employees, he said: "To have threatened your jobs is atrocious."
However, neither Mr. Edwards nor Ms. Ferrara said during their statements that the budget squeeze facing the township was not real. Nor did either of them offer a suggestion on how to pay for the lawsuit without laying off anyone.
"We could win" the lawsuit, Ms. Ferrara said. The settlement "does violence to the concept of smart growth the township has adopted as an element of its master plan." She added: "I find it regrettable that Merrill won’t extend the deadline, to explore the possibility of a public-private partnership" to buy the land for open space as proposed by Dr. Stiles.
Ms. Kemp, who voted in favor of settling the lawsuit, noted that the township has already spent $500,000 defending its downzoning. "I believe decisions in government, like life, are based on compromise. All decisions are linked together on the settlement, on taxes, on employee benefits." She said what the township gets in the settlement is a guarantee that development on the west side will "be a fraction of what we get if we lose" in court.
Mr. Sandahl said continuing with the litigation amounts to "endorsing an expensive form of suburban sprawl that will change our township forever." By this he meant the proliferation of what he called "McMansions" on the 6-acre lots implemented by the rezoning that sparked the Merrill lawsuit. "The first to go would be the land along Route 546," he said, noting that under the settlement the 170 acres that will preserved as open space are bordered by that county road.