By Lauren Otis, Staff Writer
A member of the Princeton Borough Council is calling for the borough not to engage in mediation with developer Nassau HKT over Phase 2 of the Tulane Street construction project — and instead stick to its guns calling upon NHKT to honor in full a 2004 redevelopment agreement — or risk significantly weakening its position going forward.
The councilman, Roger Martindell, also urged public meetings on the subject so the public could be apprised of the status of the stalled development project, and have a voice in how to proceed, in an April 25 letter. The letter appears in today’s editorial page of The Packet.
After informing NHKT several months ago that it must fully honor its contractual obligations for Phase 2, the borough has now informed NHKT that it is seeking non-binding mediation regarding its differences with NHKT, Mr. Martindell wrote in the letter.
”Mediation necessarily implies that the Borough expects to back away from the terms of the very 2004 Redevelopment Agreement that the Borough says it requires NHKT to fully honor. Such backing away can only cost the Borough taxpayer,” he wrote, as well as place the borough at a disadvantage in ongoing negotiations.
In an interview, Mr. Martindell said that permits for the project will expire this summer “if the shovel is not in the ground,” requiring time and expense to be reissued, so the borough should continue to insist on fulfillment of the original contract, and see if NHKT has enough of an interest in proceeding to act before its permits expire. “There is pressure there to fish or cut bait,” he said.
The developer may show an interest in proceeding, “or they may just pull the plug,” Mr. Martindell said. “Either way I don’t see that we should be giving up anything at this juncture,” he said. If NHKT won’t go forward with the project, the borough can declare it in default and either abandon Phase 2 or sell it to a new developer, he said.
Princeton restaurateur and NHKT partner Jack Morrison did not return a call seeking comment on the matter.
Mediation would be non-binding anyway, so there is little reason to believe NHKT would abide by it if it won’t undertake its contractual obligation in the first place, according to Mr. Martindell. And committing itself to mediation would only signal to NHKT that the borough will back away from demands that the developer make good on ground rent it owes under the contract since April 2006, he said.
NHKT currently owes $360,000 in contractual ground rent payments to date, with the figure going up $15,000 per month, Mr. Martindell said. He said the number is now so sizeable that the borough has a responsibility to the public to inform it about the circumstances and solicit its input.
NHKT is already in default of the development agreement, having long ago missed a deadline for identifying its lender for Phase 2, Mr. Martindell said. Phase 2 of the project was supposed to be a financial boon for the developer, but if it has so little interest in proceeding under the agreed upon terms, “maybe we should just leave the Tulane Street parking as it is and rethink what Phase 2 is and whether we should do it at all, and do it with this developer.”
There has already been litigation between the borough and NHKT over earlier parts of the project, and there is likely to be further litigation, Mr. Martindell said. (He said there is a requirement in the development agreement that the parties engage in six hours of mediation before they may file suit.) “If the developer is going to be in a lawsuit with us anyway, let them take us to court,” he said. “Let the chips fall where they may.”
Mr. Martindell did not say whether any other Borough Council members agreed with his position when the NHKT situation was discussed at a closed segment of last week’s council meeting. “We discussed it in closed session, so we are all aware of each other’s position,” he said.
”That is closed session material and I don’t have any comment,” said Council President Margaret Karcher of the matter. At deadline, Borough Mayor Mildred Trotman and other members of the council had not returned calls seeking comment.
