Not too long ago, Hoboken was a city without one stable municipal garage location. Now the city has two garages, one it is leaving and one it is returning to, and legal headaches from both.
As the city prepares to return municipal garage operations back to the original downtown Observer Highway location, it appears that at least one problem from the controversial uptown Willow Avenue location will follow the city south.
Interim Corporation Counsel Mark Tabakin sent a letter to Hudson County Superior Court Judge Thomas Olivieri last week saying there is no need for future court proceedings regarding a lease controversy at 1714-16 Willow Ave., because the city is vacating the uptown premises.
But Hoboken Unleashed owner Mike Stigliano, who already had a lease on the property before the city moved in and is suing the city, is saying: not so fast.
“We want to find out the truth behind why the city knowingly and blatantly disregarded our lease.” – Michael Stigliano, Owner of Hoboken Unleashed.
SHG claims Hoboken violated the contract by not obtaining an environmental approval from the NJDEP before the closing date of Aug. 13.
Hoboken Unleashed owner: ‘It’s far from over.’
Stigliano, whose company Hoboken Unleashed is currently located at 716 Clinton St., said on Wednesday that Hoboken’s move out of Willow Avenue is a “step in the right direction, but it’s far from over.”
“We’re still proceeding with the trial,” Stigliano said on Wednesday. The city has been in court twice with Hoboken Unleashed, and a return date was set for Oct. 12.
Mayor Dawn Zimmer said on Thursday that a conference call is scheduled with the judge for next week among the lawyers, who will decide whether or not there is a reason for the court case to continue.
“It is disappointing that we couldn’t reach an amicable agreement for that site,” Zimmer said. “We were looking forward to shared services [with Weehawken].”
Zimmer said on Thursday that the city is looking at agreements to try out shared services potentially with Stevens Institute, the Hoboken Housing Authority, Weehawken, or the county.
Stigliano still has questions for the city.
“We want to find out the truth behind why the city knowingly and blatantly disregarded our lease,” Stigliano said. “There’s more to the story…They [the city] have stabbed me in the back once and I believe they will stab me in the back again.”
Stigliano needs a variance to move his business onto the property, which requires approval from the Hoboken Zoning Board. Previously, Stigliano has said he believes his company has a “99 percent chance” of being approved, because it is a simple variance. On Wednesday, he said he puts his chances at 10 percent because he worries about retaliation from the city for the legal battle. Previously, Zoning Board Chairman Tony Soares has said the application will be treated fairly.
“We will treat this application objectively, fairly,” Soares said last month. “And the lease issue, as well as the litigation between the applicant and the city, should have no bearing on the merits of the application. The two issues are totally separate.”
Stigliano said that all of the documents have been submitted to the zoning board, and in order for them to respond within 45 days, they have two weeks left to respond to Hoboken Unleashed.
The city is hoping the lawsuit is over, and Zimmer looks forward to shared services for municipal vehicles in the future.
SHG Lawsuit filed
The main matter at hand for the Hekemian case will be: who breached the contract?
The city council voted 5-3 to terminate the sale with SHG, claiming the company did not allow the city to complete environmental testing.
“Hoboken had over two years to complete the remediation and obtain the approvals prior to the Aug. 13, 2010 closing date,” said Douglas Cohen, general counsel for S. Hekemian Group, in an e-mail. “However, Hoboken failed to act diligently, failed to heed the advice of its own environmental consultants and the recommendations of SHG’s experts and did not obtain the required approvals. Thus, Hoboken breached its contractual obligations and failed to appear at the Aug. 13 closing.”
The mayor has previously said SHG’s $2.5 million deposit is worth fighting for, and maintained that stance on Thursday.
SHG has asked the city to give up the deposit.
“If this matter is not promptly settled, the cost to the city will be far in excess of $3,000,000, as Hoboken will not only be responsible for paying its attorneys’ fees, but it will also have to reimburse SHG for its attorneys’ fees,” Cohen said. ”The attorney’s fees alone will be hundreds of thousands of dollars.”
Even though the city is looking to pursue the deposit aggressively, SHG has the same idea.
“The mayor and council should reconsider their refusal to return the deposit and city fee to SHG within the next thirty days to avoid prolonged, costly litigation,” Cohen said.
A new attorney will be needed to take over the Hekemian lawsuit, and a request for qualifications has been issued by the city. The administration has posted an RFQ on the city website.
“Mr. [Gordon] Litwin has made an ethical decision that since he is part of the case he shouldn’t be the one to represent the city,” Zimmer said. “He is a witness.” Litwin was working for the city as their redevelopment attorney on the Hekemian sale, but has since become embroiled in the legal controversy.
Zimmer said the cost of moving has been “minimal” and said the director [Jennifer Maier] feels it has given the city the opportunity to become more organized.
“The process of moving has been very good for the garage,” Zimmer said. “As we move back, we’re going to be much more efficient.”
The decision about the Willow Avenue garage could be solved as early as this week, but the lawsuit with S. Hekemian seems to be the larger cloud looming over the legal department.