Executive Director Joseph Nicholas said he had encouraged vendors to whom the BLRA owed money to submit their bills as soon as possible in order to expend cash on hand on the off chance that the Army might seize the remaining money.
Although some bills went back a few years, nearly $11 million of the $13 million was dedicated to infrastructure improvements to the former Military Ocean Terminal in preparing the land for commercial development.
During the summer, the BLRA signed an agreement with the Army to extend the deadline to Oct. 18 for a review.
Back in 2002, when the Army gave the city possession of the former Military Ocean Terminal of Bayonne so the city could develop it, there were requirements put on the city. One requirement was that funds generated from the base for seven years would be reinvested in making the base ready for development. Technically, the Army, in its review of whether or not the BLRA has complied, could demand the BLRA turn over all cash on hand.
"We have about $700,000 left," Nichols said last week, expressing confidence that the Oct. 18 review would not require the BLRA to give up this money.
Nichols assured the BLRA commissioners that the bills were for work that was completed, and simply not paid for yet.
What about that bonus?
Several critics raised questions about the BLRA's offer to pay a $1 million bonus to a union construction company if roadwork at the MOTBY is finished ahead of schedule.
Nichols said the idea was to complete the work before winter so that possible development could start in spring.
Still, several residents asked why the bonus was being offered when the requests for proposals for future development have not yet been accepted by the BLRA.
The BLRA has received 10 proposals for development for several districts at the MOTBY, including three possible maritime projects (two of which are industrial), and a project for a hotel/convention center proposed by the Florio Group, a company whose partner includes former New Jersey Gov. Jim Florio. The proposals are supposed to be unveiled at the Nov. 12 BLRA meeting.
The BLRA also paid $900,000 to the city of Bayonne, a payment made on a $1.4 million bill for services, such as police officers, that the city provided the base.
"We still owe the city about $420,000," Nichols said.
Port Authority suit
Nichols said Bayonne will face the Port Authority in Appellate Court on Nov. 12, where he hopes the court will render such a significant victory to the city that it will discourage the Port Authority from appealing it again to the state Supreme Court.
In November 2007, the BLRA voted to void a deal to sell a portion of the MOTBY to the Port Authority for $50 million, in order to take advantage of a more lucrative deal with PortsAmerica for more than $90 million. Because the BLRA had failed to provide adequate public notice to the meeting at which the Port Authority deal was voted on earlier, a superior court judge ruled the BLRA could void the deal. The Port Authority appealed.
Although legal fees for the case are edging closer to $1 million, Nichols said the net gain is worth the fight, and feels confident the city will prevail.
Mike Masone, a long time critic of the original deal, and former Municipal Judge Pat Conaghan (who is currently running to become mayor of Bayonne), have called for an federal investigation since legal briefs in the appeal show that the negotiations leading up to the original Port Authority deal may have been done in secret without BLRA commissioners or many BLRA staff being aware of them.
Michael Masone, a close associate of Conaghan, said an investigation should be made into the 2005 deal that gave a lucrative contract for the sale of the Harbor Station development district to a developer, saying that taxpayers may get stuck having to pay back $29 million.
"Something stinks in all this," Masone said.
In 2005, the BLRA sold the Harbor Station section to Fidelco/Roseland Properties for development of townhouses. With the downturn in the for-sale real estate market, Fidelco has requested to build rental units instead. This appears to violate an agreement with Trammell Crow, which previously had exclusive rights to construct rentals on a portion of the Bayonne Bay district.
Masone said the city borrowed against the future sale revenues from Fidelco, but failed to make sure that if the deal fell through, the company would also be responsible for part of the $29 million debt. The city used borrowed money to help balance its municipal budget.
Councilman Anthony Chiappone, who is also a commissioner of the BLRA, however, said later from checking the details of the deal that Fidelco is on the hook for as much as $5 million in personal guarantees.
"It is likely that we're going to have to pay the $29 million back," Chiappone said. "But representatives from the company, including Carl Goldberg and Donald Scarinci, are responsible to pay back some of the loans."