The developer of Center City Mall is accusing the Paterson Parking Authority of reneging on a 2005 agreement that required the parking agency to construct a second garage.
Under the redevelopment agreement, the Paterson Parking Authority had to build a 600-space garage accessible from Veterans Place and Hamilton Street after the completion of the Center City Mall.
“The Redeveloper has satisfied its obligations, but the Authority has not even commenced construction of the Authority Garage,” wrote developer Efstathios “Steve” Valiotis in a letter to Tony Perez, executive director for the Paterson Parking Authority, in late June. “Given our significant investment in the City, we insist the Authority immediately commence fulfilling its obligations under the Redevelopment Agreement and the Operating Agreement.”
The Paterson Parking Authority in a letter dated Jul. 2 told Valiotis the decision not to construct the garage was “mutual” due to “substantial and pernicious vacancies” at the Center City Mall. It’s not practical to build a garage at the site, says the reply letter by the agency’s lawyer Glenn Scotland.
Scotland’s letter accuses the developer of reneging on some stipulations in the agreement. For example, the agreement required the developer to make traffic signal improvements. It also alleges the developer’s failure to commence construction on two other phases of the mall project amounts to “default” under the agreement.
The fresh dispute follows mayor Andre Sayegh’s refusal to lend his support to a $100 million expansion of the Center City Mall to include an arena. The developer has argued an arena will revive the fortunes of the struggling mall.
Valiotis needed a letter of support from the mayor to apply for $40 million in state tax credits for the project. Without backing from the mayor or the parking agency for the arena, Valiotis wants to construct a residential complex that could contain as many as 200 apartments and an office building at the spot of the proposed arena.
Scotland “objects” to the assertion the parking agency does not support the arena in the letter. He states the agency has “repeatedly supported the project before multiple levels of government.”
The 2005 agreement states the developer would build a residential and office complex in the area.
Perez said both sides are speaking to resolve the dispute.
Both sides have been waging a battle over who should control the parking garage under the mall. Currently, the Paterson Parking Authority runs and collects the revenue from the garage, used by shoppers, lawyers and jurors.
“What the Authority has not agreed to do is to turn over its parking operations to Center City and jeopardize the financial and operational integrity of its parking system in connection with the proposed arena project,” says Scotland’s letter.
The Paterson Parking Authority owns the land on which the mall stands. The mall has a 99-year ground lease with the agency. The developer pays a nominal $1 for the lease.
Valiotis has not dropped the mall expansion project. The developer has submitted the project, without a letter of support from the mayor, to the New Jersey Economic Development Authority (EDA) seeking tax credits.
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