Legal battles related to Hoboken’s move out of its old public works garage are continuing on two fronts.
The city just extended a contract for a redevelopment attorney to fight a developer who wanted to put housing on the old garage site, while the city is fending off a challenge from a small business owner who says he has the right to use their new site.
At the Aug. 11 council meeting, the city extended a contract with its redevelopment lawyer, Gordon N. Litwin, for up to $15,000 through Dec. 31. Litwin will handle the city’s case against developer S. Hekemian Group (SHG), who had hoped to buy and redevelop the city’s old Observer Highway public works garage. Two weeks ago, the city accused SHG of breaching their contract to buy the property for $25.5 million, and now both parties will fight in court.
Litwin will be fighting on behalf of the city for a $2.5 million deposit from SHG. The money is currently being held in escrow.
Meanwhile, to satisfy the city’s side of its legal obligations, they have moved their garage operations to a privately owned facility uptown at 1714 Willow Ave., but that action has stirred a legal battle too.
“We just want … the town to let us pursue our dream of opening the pet daycare center.” – Mike Stigliano, co-owner of Hoboken Unleashed
The bigger and more costly challenge will likely be the fight over SHG’s deposit.
“This is something we feel quite strongly about,” said Mayor Dawn Zimmer. “They breached the contract and we are going to fight to keep the $2.5 million. As mayor, it would be irresponsible of me to return the deposit when we have a strong case.”
When asked how much the litigation is going to cost the city, Zimmer said they are currently going through the process of estimating the cost, but she does feel it is prudent for the city to go to trial with SHG.
“We extended [Litwin’s] contract at $15,000,” Zimmer said. “It’s hard to gauge what will happen with the case. But he knows the case very well.”
She said she believes the smaller case, the Hoboken Unleashed case, can be settled without a trial.
Looking to settle uptown
Last week, the city met in court twice with the owner of Hoboken Unleashed, which has a contract for $2,000 a month to use the Willow Avenue facility, and eventually hopes to move his business there from its current Clinton Street location.
Owner Michael Stigliano has said that the city kicked one of his workers off the property last weekend when they showed up to use it.
Corporate Counsel for Hoboken Michael Kates believed a lease belonging to Hoboken Unleashed would not interfere with the city’s 60-day lease to operate there in a shared services agreement with Weehawken.
On Wednesday, Presiding Judge Thomas Olivieri granted full access to the municipal garage to Hoboken Unleashed, but required the company to provide the city with 24 hours notice via e-mail if they wanted any vehicles or equipment moved by the city.
But that only solves the dispute for a month or two, as Stigliano wants his business to move there permanently.
‘Treated objectively and fairly’
Stigliano said he needs access to the property because his business is in the process of applying for a variance, which will be necessary to open on Willow. He would need approval from the city’s Zoning Board of Adjustments.
Zoning Board Chairman Tony Soares said last week that Hoboken Unleashed will receive a fair review.
“We will treat this application objectively, fairly,” Soares said. “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.”
Court not costing city, yet
Mayor Dawn Zimmer said on Thursday that the lawsuit has not cost the city much money, and she is hoping to “settle the dispute with Hoboken Unleashed amicably.”
Zimmer will attempt to sit down face-to-face with the owner this week before the parties are scheduled to return to court on Oct. 12.
According to City Spokesperson Juan Melli, Kates is handling the case involving the city and Hoboken Unleashed. His salary, according to Zimmer, is approximately $103,500 per year.
If the case goes to trial, it could force the city to hire a special lawyer, costing more money.
Zimmer, as well as Kates, have previously said the Willow Avenue location is perfect for the city to operate its municipal garage. Hoboken Unleashed has said the same about its business.
On Monday, in court, Kates had reminded the court that the city has the power of eminent domain, which allows them to take over properties for the public good.
Satisfaction from the ruling
Stigliano said on Thursday that he’d like to have his company opening at 1714 Willow Ave. by February.
“It’s going to take a month or two to get renovations done that we need in order to get the place ready to open,” Stigliano said. “We’re hoping to get our hearing [from the Zoning Board] in the next couple of months and permits for the renovations. We’d like to hopefully start renovations this December.”
Stigliano noted that the $2,000 monthly fee was for the exclusive use of the property.
“As the judge said, we paid that money to avoid the exact situation we’re in,” Stigliano said.
The rent rises to $5,000 a month plus taxes on June 1, 2011, and then $10,000 a month beginning on April 1, 2011, he said. The city is currently sharing the rent with Weehawken for a total of $15,000 a month for a 60-day lease with options that could extend the contract up to an additional year.
Stigliano said that before the city moved to the property, the landlord, Frank Savino of Willow Avenue Enterprises, offered a proposal. Stigliano said Savino said that the city wanted to move into the property temporarily, even while Hoboken Unleashed paid for exclusivity.
“I wasn’t crazy about it and said I had to go talk to my partner,” Stigliano said. “I then found out through a press release from the city that it was a done deal.”
Stigliano said the deal was done even before he was presented with the proposal.
Calls to Steven Horowitz, an attorney for Willow Avenue Enterprises, were not returned by press time.
Stigliano shared his vision for how he hopes the case will end.
“It ends with justice being served,” Stigliano said. “We just want what is owed to us, and the town to let us pursue our dream of opening the pet daycare center.”