BY MICHAEL ACKER
Staff Writer
The failure of Sayreville’s National Lead redeveloper to meet its obligations has officials reconsidering their choice for the massive project.
LNR Property Corp. failed to meet requirements established in the redevelopment agreement, which required it to provide a letter of credit to Middlesex County to ensure repayment of a $37 million county loan used by Sayreville to condemn the 400-plus-acre National Lead site. The deadline for that was Sept. 1.
The builder also was required to sign a redevelopment agreement and negotiate a settlement with National Lead that would allow LNR to take over cleanup of the property.
Since LNR has not fulfilled those requirements, the Sayreville Economic Redevelop-ment Agency (SERA) decided not to extend its designation as conditional redeveloper of National Lead during a Sept. 14 meeting.
However, SERA officials are willing to entertain the possibility of reinstating LNR as conditional redeveloper, provided that an agreement can be reached that is acceptable to SERA and the Middlesex County Improvement Authority.
SERA Executive Director Randy Corman told the Suburban that other developers have expressed interest in taking over the $1.7 billion project.
“We have to take action in order to protect our position with the county,” Corman said, referring to SERA’s obligation to have the county paid back. “LNR has not reached an agreement with NL [National Lead Industries]. Their approach to the project was predicated on having a quick agreement with NL, and unfortunately that did not happen.”
Corman said he hoped that the county Board of Chosen Freeholders will announce today that they will extend the borough’s deadline for paying back the loan. LNR also owes the county for other fees, he noted.
“Our first consideration is showing the county that they will get their money back,” Corman said. “And we are prepared to do whatever we need to do to ensure that happens. If LNR can make that happen, that is great. If we have to find another developer to make that happen, we are willing to do that.”
SERA Chairwoman Christine Spezzi said the agency would like to work with LNR, but she has concerns with an increase in residential units now being proposed. While Sayreville and LNR had previously agreed to allow 2,000 units in addition to the many other proposed uses on the National Lead site, the builder is now seeking 4,500.
“That is not acceptable,” Spezzi said. “I am sure that we can work with them. We will look to talk to other developers, but we absolutely will leave the door open to LNR. We have to negotiate in the best interests of everyone in the Borough of Sayreville.”
LNR, chosen by SERA last March, proposed an entertainment center, waterfront amenities, open space, office and retail developments, and residential condos. With 2,000 units, the estimated population generated is 5,060 people, including 318 school-age children. The number of jobs to be generated by the nonresidential component is 8,032, estimates show. The project was expected to produce more than $25 million in annual property tax revenue, while costing the borough an estimated $7 million for school and municipal expenses.
SERA is requesting more time from the county to repay the $37 million loan used to condemn the waterfront property, Corman said.
“We know that we have good cause to go to the county and seek relief” Corman said. “… we have kept the county informed every step of the way.”
Resident Irving Tischler asked the commissioners where the money would come from if the borough does not get a redeveloper in time and the freeholders do not grant an extension for the loan.
Corman reassured him that taxpayers would not bear the burden of the loan.
“The only things at risk are the assets of SERA,” Corman said, adding that if the county did eventually take over the project, anything they propose to develop would require the approval of the borough Planning Board.
Councilman Rory Zach attended the meeting and spoke during the public portion, urging SERA to look beyond the former National Lead site to other redevelopment projects in the borough in order to increase the commercial tax base and add revenue in the short term.
“Most of the discussion tonight has been about National Lead again,” Zach said. “Focus on other redevelopment projects. Get things moving in town. From my side [and] my position as chairman of the administration and finance committee, our residents need more relief.”
D’Addio replied that SERA is currently discussing the redevelopment of several sites in the borough, including the former Robert E. Lee restaurant site on Route 35 and the Sabert world headquarters.
Corman cited several warehouses on the Main Street Extension, the Dupont warehouse on Minnisink Avenue and the Red Oak Cogeneration Plant as some examples of work done by the agency over the past few years. He added that Red Oak has been paying the borough $800,000 a year in taxes since 2003.
Borough Tax Assessor Joe Kupsch Jr. told the Suburban that the residential tax base in Sayreville is approximately 75 percent. Figures he provided indicate that the combined commercial and industrial tax base, including multiple-unit apartments, is roughly 22 percent of tax revenue in the budget.
Lawsuit dropped
All of the commissioners on SERA were in attendance at last week’s meeting with the exception of Borough Councilman Dennis Grobelny. He joined the agency this year after the council added two seats to SERA, one of which is still vacant. The action sparked a legal challenge by SERA and ultimately cost the borough approximately $50,000 in legal fees.
SERA Commissioner Michael D’Addio made a motion to dismiss the lawsuit with the borough, and the agency voted 5-2 in favor of the motion, with Spezzi and Commissioner Jacqueline Berg voting in dissent.
D’Addio followed the motion with another that was tied to the dismissal of the lawsuit – appointing the law firm of Hoagland, Longo, Moran, Dunst & Doukas, a major contributor to the Democratic Party, to serve SERA once the lawsuit is dismissed. The commissioners approved that motion as well.
The votes were taken at a time when Democrats on the council have appointed new members to SERA, one of whom replaced Republican Mayor Kennedy O’Brien.
Spezzi told the Suburban that the actions leave SERA with an even number of commissioners, at eight, which she is against. She added that the litigation should not have been dropped, as it sought to challenge a state law that she and others felt unfairly targeted Sayreville.
“We should have just followed through and waited for the judge’s ruling,” Spezzi said.