A vociferous three-hour debate erupted Wednesday night over an ordinance that would allow the city to "purchase or condemn" a half-block piece of property at 10th and Grand streets - including two thriving businesses - so that developers can build condos there.

The city would like to allow development partners Ursa Development and Tarragon Development Corp. to build part of their massive northwest redevelopment property on that site.

But Wednesday night, the City Council withdrew the ordinance and declined to vote on the matter, which many residents had objected to.

Because of the city's refusal to act, the matter will be heading to court, as the developers have sued the city for breach of contract. John J. Curley, an attorney for Ursa Development, said Wednesday that his client filed a lawsuit against the city on Feb. 17 to compel the city to act on this ordinance. He said that the city is breaching the 1998 Redevelopment Plan and the subsequent 2001 Developers Agreement, which named Ursa/Tarragon as the developer of the northwest redevelopment site.

Curley added that Ursa/Tarragon is also seeking damages because of the delay.

Ursa/Tarragon wants to raze the half-block of buildings to build 150 units of mostly market rate housing. This would be part of their much larger development in the city's formerly blighted Northwest Redevelopment zone. Several developers are building there, but the Ursa/Tarragon partnership is the largest.

The City Council members who advocated the tabling said that the move will protect the city from damages, but more importantly, it will give the city more time negotiate with the developers regarding whether they need that half-block or can make up for it somewhere else.

If they can do that, it will keep the lawsuit from going forward.

But there are many in the public that said the council is secretly supporting eminent domain for the buildings anyway, and is simply spurring the developers to use the courts so the city won't have to vote on this controversial matter.

A vociferous three-hour debate erupted Wednesday night over an ordinance that would allow the city to "purchase or condemn" a half-block piece of property at 10th and Grand streets - including two thriving businesses - so that developers can build condos there.

The city would like to allow development partners Ursa Development and Tarragon Development Corp. to build part of their massive northwest redevelopment property on that site.

But Wednesday night, the City Council withdrew the ordinance and declined to vote on the matter, which many residents had objected to.

Because of the city's refusal to act, the matter will be heading to court, as the developers have sued the city for breach of contract. John J. Curley, an attorney for Ursa Development, said Wednesday that his client filed a lawsuit against the city on Feb. 17 to compel the city to act on this ordinance. He said that the city is breaching the 1998 Redevelopment Plan and the subsequent 2001 Developers Agreement, which named Ursa/Tarragon as the developer of the northwest redevelopment site.

Curley added that Ursa/Tarragon is also seeking damages because of the delay.

Ursa/Tarragon wants to raze the half-block of buildings to build 150 units of mostly market rate housing. This would be part of their much larger development in the city's formerly blighted Northwest Redevelopment zone. Several developers are building there, but the Ursa/Tarragon partnership is the largest.

The City Council members who advocated the tabling said that the move will protect the city from damages, but more importantly, it will give the city more time negotiate with the developers regarding whether they need that half-block or can make up for it somewhere else.

If they can do that, it will keep the lawsuit from going forward.

But there are many in the public that said the council is secretly supporting eminent domain for the buildings anyway, and is simply spurring the developers to use the courts so the city won't have to vote on this controversial matter.

What's going on here?

In 1998, the city created the Northwest Redevelopment area to spur development on the city's west side, which at the time was made up largely of empty factories, trucking companies, and littered lots.

The plan has led to sizable residential development, but now some believe that eight years later, conditions have changed and the plan might need tweaking.

Redevelopment, according to state law, is a zoning term that means there is an area within the municipality that is not being used to its full potential. Designating a redevelopment site allows a city to use special zoning and give a developer tax abatements or in-lieu-of-tax payment agreements.

Redevelopment also means the governing body can pool a large area of property together, even if the land is owned by multiple owners, and then zone the property as they wish.

They are even allowed to force a private person or business to sell their land so it can be put to "public use." But is a new residential development a public use? That matter has been debated locally and nationally in the last few years.

Under this government power, known as eminent domain, property owners must be given "just compensation." The block in question includes two businesses, U-Store-It and Kwitman & Son. Kwitman & Son, one of the last industrial businesses in Hoboken, has produced drapes and other home furnishings for the past 23 years. The company employs several dozen employees.

On the eastern border of the Northwest Redevelopment area is the charming tree-lined block of 10th and Grand streets, which boasts cobblestone streets and million dollar property values.

U-Store-It wants to stay

U-Store-It is the sixth largest public storage company in the country and is publicly traded. The Hoboken branch has been here for 11 years.

According to Tom Stumpf, the regional director for U-Store-It, there are more than 370 of the storage facilities across the country. He added that since they acquired the Hoboken property in August 2005, $250,000 has been spent on improvements to the building and its grounds, including landscaping, fencing, and better lighting. "We really welcome an ongoing friendship and business association with Hoboken," Stumpf said.

The company's lawyer, Laura Kyler, added that U- Store-It is over 80 percent occupied with people's belongings, and provides a much needed public service.

"This is a business that wants to remain part of this community," Kyler said.

She added that if the property were to be seized, it would "raise serious concerns" for the company.

Left with several choices

The City Council was left with several choices on Wednesday night.

They could vote in favor of seizing the property. This would allow the city to live up to the 1998 Redevelopment plan and 2001 Developers agreement. This would have also meant that Ursa/Tarragon would also likely drop its lawsuit against the city.

But this route would have also opened the city up to a lawsuit from the property owners, local activists, and residents who are opposed to taking over private businesses.

The second option would have been to vote down the ordinance, which would have appeased the activists, business owners, and local residents who oppose the project.

The third option was to table the ordinance, which is also proving to be a controversial move.

Those who supported the tabling said that the city could re-engage Ursa/Tarragon in additional negotiations to amend the redevelopment plan, keeping them from following up on their lawsuit.

Two other options

According to Councilman Michael Cricco, the city has already pitched, behind closed doors, two proposals. One would allow Ursa/Tarragon to build with higher density on another block in the Northwest Redevelopment Area. The other would allow the developers to seize the properties as long as they do a gut rehabilitation of the buildings instead of tearing them down.

Cricco said that as of Wednesday night, the developers rebuffed the proposals.

But Councilwoman Terry LaBruno said that she was optimistic that some sort of deal can be brokered.

"I believe that there is a compromise out there that can be made," LaBruno said.

The city might have some leverage in negotiating. Ursa/Tarragon is currently lobbing the city to be named the developer for a proposed nine-block redevelopment area along the Light Rail tracks and north of Ninth Street. While Ursa/Tarragon already owns most of the property, the city must still blight the property and decide how it would want to zone the area, and then name a developer. This could give the city a solid bargaining position for the Grand Street property.

But not everyone agrees

Councilman Peter Cammarano, who is a lawyer, said that the council, as the city's legislative governing body, has a responsibility to vote their conscience, for better or worse.

"I'm disappointed that this didn't go up for a vote," Cammarano said. "We are just kicking the can down the road."

He said that the council should have voted what they believe to be right and, if the vote is fractured, "let the chips fall where they may."

Cammarano had previously said he is concerned that the project does not meet the "public use" requirement for eminent domain.

Public calls out council

Using much stronger language than Cammarano, several members of the public said the council was pushing this difficult decision off to the court system and was too afraid to take a controversial vote.

"I think you are acting cowardly," said community activist Jim Vance. "You are going to be sued anyway, so you might as well vote with your constituency."

Vance also noted that Ursa/Tarragon has contributed over $125,000 in the past two years to local political organizations controlled by Mayor David Roberts. While contributions are legal for now (see related story inside), Vance said that such large contributions have made the city government indebted to these developers. "You could have acted with real courage tonight, but you didn't," Vance said.

Ann Graham, who is the vice president of the watchdog group the People for Open Government, said that the council is hiding behind the litigation.

"I really think it's a disgrace," she said.

Residents say it sets bad precedent

Most of the more than 25 members of the public who spoke at the meeting passionately opposed taking the businesses and handing them over to a politically connected developer to build more market rate housing. One of the more popular arguments was that taking private businesses for residential development does not meet the "public use" requirement for eminent domain.

Grand Street resident Barbara Heart said that this neighborhood is an oasis, and one of the last patches of the Hoboken charm that enticed her to move to the city.

She added that many people in the area utilize the storage facility, and that both businesses maintain their buildings and are quiet neighbors.

She said that if the developers were allowed to demolish, it would eradicate the allure of the block. "There is no gain for the population of Hoboken with this project," Heart said.

Grand Street resident Ellen Simon asked if city is going to take this property, what would stop them city from taking hers?

"[Eminent domain] has now become a threat for everyone in this city who lives in an old property," Simon said. Others argued that there would be ripple effects from this project. The city is now considering creating a redevelopment area at the site of the municipal garage and Neumann Leather Building on Observer Highway near the city's southern border. While one family owns the Neumann property, it is over 95 percent occupied and houses over 100 artists and small businesses.

Lane Bajardi, a neighbor of the Neumann building who is the condo association president of 70 Park Ave., said that if the city were cavalier about taking businesses on Grand Street, it wouldn't bode well for other city areas eyed for redevelopment.

"I have to ask, how is this going to play out at Neumann Leather? " Bajardi said.

Others argued that the Northwest Redevelopment Plan was created in 1998 when the west side needed a catalyst for new development, but in the past eight years conditions have changed dramatically. Property values are soaring and there are no longer any blighted properties left in the city. They argued that redevelopment is a fluid, organic process that allows amendments to the redevelopment plan.

Resident Peter Cunningham said that there is a perceived impropriety when a redeveloper gives so much in campaign contributions and then receives the benefit of eminent domain.

"The benefit here is for only for these [development] companies, not for the city and certainly not for the community," Cunningham said. "This is bad public policy."

Supporting the move

Several members of the City Council said the redevelopment has been a boon for the city.

"I think it's important to use redevelopment plans," Councilman Christopher Campos. He added that the city would reap great benefits from the Northwest Redevelopment plan, including a multi-million community center paid for by the developer and 200 units of affordable housing. He said that without using redevelopment plans, the free market would have never produced such givebacks.

Councilman Michael Cricco added that the Northwest Redevelopment Area has been a great success. "Back as far as 1996, when there was nothing more than vacant warehouses and empty lots," he noted. "We said we wanted a supermarket, affordable housing, and a site for a new school. This plan has done that and more."