City Council turned against $38 million Paterson bond guarantee. Then gave preliminary approval to the measure.
By Jayed Rahman
Published: June 19, 2020
After expressing their support for three projects at the Great Falls two days ago that requires a $38 million bond guarantee, City Council members suddenly turned against them on Thursday afternoon.
“We debated this on Tuesday for over two hours. And within two days, all of a sudden, what happened?” asked mayor Andre Sayegh, who was entirely caught off guard by the sudden hostility from the City Council.
Members of the City Council unleashed a barrage of questions, including for documents and agreements between the city and the developer.
Council president Maritza Davila said the Sayegh administration did not provide an agreement between the city and the developer, New Brunswick Development Corporation (DevCo), that’s mentioned in the body of the measure.
Bond counsel Timothy Cunningham told Davila mention of an agreement in the measure was an error.
Davila said also received “alarming emails” that contained links to news stories critical of Christopher Paladino and DevCo.
“I’m here to protect our Patersonians and I cannot move forward with this item right now,” said Davila. “We have to do our due diligence.”
She tried to unilaterally pull the item, but councilman William McKoy raised a procedural concern, forcing her to take a vote on tabling the item. Tabling of the measure failed after a tie vote.
Councilman Shahin Khalique said he needed more time to do research before voting on the item.
“This has been going on for five months. You need more time?” remarked economic development director Michael Powell.
“I think today you are being the most disrespectful you have been in two years,” said Davila in rebuking Powell.
Sunshine Law
Some council members questioned whether the emergency meeting violated the New Jersey Sunshine Law.
“What’s the emergency here?” asked Rivera.
“The project needed to go before the local finance board. And if it did not go before the local finance board for the first meeting in July the credits will be lost,” said law director Farrah Irving.
Sayegh has earmarked $37 million of the city’s $130 million state tax credits for the projects. The cost for the three projects is approximately $50 million. $24.5 million for a 13,000 square feet visitor center at the Overlook Park (pictured). $15.1 million for a 270-space parking deck with retail space on the ground floor. And $8 million for a 24,000 square feet community center at the corner of Main and Ward Street.
Irving did not have any documents that backed up her claim that the credits would be lost if the council did not act on them before the end of the fiscal year. She said she took the word of administration officials.
Rivera said Powell was seeking an extension from the state. He worried a rival developer could file a lawsuit against the city and invalidate the actions of the council for breaking the open meetings law.
“I’m trying to protect the whole project,” said Rivera.
The projects have to be completed by June 30, 2022, said officials. A delay in going before the local finance board will lead to a delay in construction, said officials.
An emergency meeting allows the city to skip the usual public notice requirement. Councilman-elect Alex Mendez questioned the emergency meeting earlier in the day. He went to City Hall to demand to know what was the emergency.
Mendez said the emergency meeting deprives people of the right to attend the meeting and receive information about the bond guarantee proposal.
Council members said the mayor’s only emergency was that he would lose an ally on July 1, when a new City Council takes office. The mayor’s ally, William McKoy, lost the election in May, to Mendez.
Conflict of interest
At one point, councilman Michael Jackson accused the city’s bond counsel of having a conflict of interest.
Jackson said Cunningham’s fellow partner, Lori Grifa, in the Archer Law firm sits on the board of the New Jersey Community Development Corporation (NJCDC), one of the three nonprofits involved in the Great Falls projects.
Cunningham initially said he was not aware of anyone from his firm tied to NJCDC. He said the Archer Law firm has many lawyers.
Sayegh administration officials did not see a conflict of interest.
Bob Guarasci, head of the NJCDC, said “nothing nefarious” is going on. Jackson said at the very least this should have been disclosed to the City Council.
Eventually, the council approved the $38 million bond guarantee measure by a 5-2 vote. Davila and Rivera did not take part in the vote.
A public hearing and final vote on the measure is scheduled for June 30 at 12 p.m.
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Updated 9:45 a.m.