Testified he could have made millions
By:Jack Baney
The president of Greenbriar developer Hillsborough Alliance for Adult Living testified this week in state Superior Court that he stood to gain millions if the development was approved and he failed to disclose his financial ties with the developer on state documents.
Harry Smith, who served as head of the Hillsborough Municipal Utilities Authority while he was under contract with the developer, also testified that he failed to note his compensation from Hillsborough Alliance on state Department of Community Affairs disclosure form.
His testimony came during a civil trial before State Superior Court Judge Roger Mahon in Flemington focusing on alleged conflicts of interest surrounding government approvals of the development.
The citizens’ organization Friends of Hillsborough, which opposes Greenbriar, contends in a lawsuit that Mr. Smith and others had financial interests that influenced such approvals of the 3,000-housing unit development on Mill Lane. Mr. Smith has denied any wrongdoing.
The trial, which began in early March, is scheduled to continue May 23-25, and possibly June 7 and 8.
Friends of Hillsborough attorney David Trombadore said a 1989 contract between Mr. Smith and Mill Lane landowners, who eventually formed Hillsborough Alliance to develop the property, called for Mr. Smith to be paid according to his success in getting Hillsborough to change its land-use laws.
Mr. Smith was to receive 10 percent of the portion of Greenbriar profits resulting from land-use law changes, he said.
Mr. Smith was an advocate of a land-use law, passed by the township in 1991 and repealed in 1997, that allowed 15 lots to be built on each acre of the nearly 760-acre Greenbriar site, rather than the previously allowed one lot.
This would have resulted in a $44 million increase in total Greenbriar profit if each acre sold for $40,000, said Mr. Trombadore.
When Mr. Trombadore if this was an accurate description of the contract, Mr. Smith replied, “Absolutely.”
However, Mr. Smith added, the contract was replaced by another one in 1991 calling for Hillsborough Alliance to pay him $6,000 per month.
Paul Fernicola, attorney for Greenbriar developer U.S. Home, objected to Mr. Trombadore’s figures, saying there is no way to demonstrate that each acre would have sold for $40,000.
Mr. Trombadore responded that developers have refused to disclose the anticipated price per acre.
Mr. Trombadore later asked Mr. Smith about a 1989 letter from Somerset Raritan Valley Sewerage Authority that referred to a sewerage moratorium the state Department of Environmental Protection had imposed on the authority.
While the Greenbriar proposal called for sewering the Mill Lane site, the moratorium would have prevented additional sewering in Hillsborough because the township is served by the authority.
Friends of Hillsborough is planning to argue that Mr. Smith knew about the moratorium and, as chairman of the Hillsborough utilities authority, had a responsibility to tell the Planning Board, said Friends of Hillsborough president Judith Glassgold.
Given that such a revelation could have hurt the Planning Board’s willingness to grant approvals to Greenbriar, a failure to inform them would serve as evidence of a conflict of interest, she said.
“This is where Mr. Smith’s two hats come in,” said Dr. Glassgold.
Mr. Smith testified he could not recall if he was aware of such a moratorium at the time.
“I may have and I may not have,” he said. “At this point, 12 years later, I don’t recall that.”
Under further questioning from Mr. Trombadore, Mr. Smith discussed a 1991 agreement with Hillsborough Alliance for Adult Living paying him a monthly fee of $6,000. The developer paid Mr. Smith this amount from January 1992 to early or mid-1999.
Mr. Trombadore then asked Mr. Smith about a 1994 disclosure form signed by Mr. Smith and filed with the state Department of Community Affairs. Though the form required Mr. Smith to list any payments in excess of $2,000 he had received during 1993, it did not list his monthly payments from Hillsborough Alliance, said Mr. Trombadore.
Mr. Smith said he did not list the payments because they had been assigned to Central Electric, a business he owns, for tax purposes.
Mr. Smith said he also had omitted Hillsborough Alliance for Adult Living from a required list of business organizations in which he was a holder.