Better process called for, but feds uphold Sandy Hook lease

Inspector General responds to Pallone request for investigation

BY JAMIE ROMM Staff Writer

MIDDLETOWN — The National Park Service needs to improve its leasing program, but the agency didn’t breach any laws in giving a private developer the right to rehabilitate historic buildings at Fort Hancock on Sandy Hook, according to a federal official.

T

hat was the gist of the response from

the U.S. Department of the Interior’s Inspector General (IG) to Rep. Frank Pallone (D-6th District), who three months ago wrote to the Office of the Inspector General asking for an investigation into a lease agreement between the National Park Service (NPS) and Sandy Hook Partners.

In a letter to Pallone, Inspector General Earl Devaney wrote, “Our investigation did not identify any criminal or civil violations of law. However, our investigation revealed the need for NPS to establish better policy and procedure for the administration of the NPS leasing program.”

In October, Pallone wrote to NPS Director Mary A. Bomar, calling on the IG to complete an investigation of the lease, which he had requested and that the IG had begun more than a year and a half ago.

Pallone’s request followed a ruling by the 3rd Circuit Court of Appeals on Sept. 22 that upheld a lower court ruling that the NPS has the right to lease the historic buildings to Sandy Hook Partners for commercial reuse.

After the court decision, the NPS gave the developer another extension of 90 days — one of numerous extensions granted — to come up with the funds for the proposed renovation project.

Devaney’s letter spelled out recommendations for tightening up the NPS leasing process that, in fact, address some of the objections raised by opponents of the Fort Hancock lease process.

“On Aug. 13, 2008, we issued a Management Advisory to NPS suggesting that at a minimum the following recommendations be considered,” the IG wrote.

• Establish procedures to be followed by an evaluation panel when reviewing and recommending an entity for lease negotiations.

• Develop standardized documentation for evaluation panels that provides consistency and transparency of the panel’s process and final recommendation.

• Provide documented guidance to the panel, which clearly defines NPS priorities and assigns a weighted value to each selection criteria.

• Establish consistent financial requirements on prospective lessees for various phases of the lease process prior to the lease execution.

Devaney’s letter is the latest development in the ongoing controversy over the leasing of the Fort Hancock buildings that culminated in a lawsuit brought by Save Sandy Hook to block the commercial development.

In a Sept. 22 ruling, the 3rd Circuit Court of Appeals upheld a lower court ruling that the NPS has the right to lease historic buildings on Fort Hancock to Sandy Hook Partners for commercial uses.

Save Sandy Hook had until Dec. 25 to petition the U.S. Supreme Court to take the case, but let the deadline pass.

The three-judge appellate panel upheld a September 2007 decision by Circuit Court Judge Mary L. Cooper, who ruled that the “NPS has considerable discretion to administer, use and lease the properties it is tasked with protecting as long as it complies with applicable environmental laws.”

Cooper rejected the claim that the lease violated provisions of the National Environmental Policy Act, the National Historic Preservation Act, and the law establishing Gateway National Recreation Area.

“The administrative record demonstrates that the NPS extensively analyzed all potential impacts of the rehabilitation and reuse of the Fort Hancock Historic District, including any impacts that would be caused by the SH Partners lease,” the ruling stated.

The procurement process for the Fort Hancock rehabilitation program began in August 1999 when the NPS issued a Request for Proposals for the leasing of historic buildings at the fort. The NPS, which claimed it did not have the funds to rehabilitate the historic structures, received 22 proposals in response and chose a proposal from Wassel Realty Group Inc, headed by James Wassel, Rumson.

Wassel Realty’s proposal identified 44 buildings at Fort Hancock for possible rental and envisioned “a sophisticated, multiuse facility that would feature a technology driven office space and a state-ofthe art educational facility and conference center.”

An NPS-appointed panel evaluated the proposals and recommended Wassel’s proposal and another for negotiation in early 2000. Wassel Realty organized Sandy Hook Partners in November 2001; the NPS and SH Partners executed a Letter of Intent committing the parties to enter into a lease, and on July 9, 2004, NPS and SH Partners executed a 60-year lease for 36 buildings at Fort Hancock.

Sandy Hook Partners received a series of extensions of the time allotted to show Wassel had the financial resources to complete the plan before the lease was signed in 2004.

In 2004, Save Sandy Hook filed a lawsuit against Sandy Hook Partners, the NPS and the Department of the Interior challenging the lease. Monmouth County Friends of Clearwater, which had submitted an unsuccessful bid, joined the suit, which claimed the procurement process for the lease was flawed and that Wassel had failed to provide proof of having adequate funding for the project.

Save Sandy Hook asked the district court for “a declaration that the lease violates the federal statutes and a declaration that the lease is void.”