Garage sale/lawsuit-a costly lesson

Garage sale/lawsuit-a costly lesson

02/10/2008  Hoboken Reporter 

Dear Editor,

Now, the City of Hoboken is faced with another lawsuit that will result in costly legal expenses. The Observer Highway repair garage has been a financial nightmare for the taxpayer. In 2005, it was sold to the Hudson County Improvement Authority to plug a $7.9 mil budget gap or shortfall. Around July 1, 2006, the council voted to borrow $15 mil to pay off the HCIA. All this time we have to pay interest to keep this site operating and the current cost is approximately $120,000 per month. We have yet to select a replacement location.

On December 13, 2007, after two previous failed bidding processes, the Hoboken city council voted 6 to 3 to sell the municipal repair garage for $25.5 million. The impetus for the favorable vote was the rush to infuse $4 mil into this year's municipal budget. To make a long story short, another developer offered $30 mil for the property. This offer was not accepted due to the legal advice of the City's Special Counsel that the higher bid did not conform to the specifications of the RFP. The council went into closed session prior to this vote and most probably was advised that a lawsuit could be filed in any event by the bidder who was not chosen. This has now happened by reason of the lawsuit filed by a developer and resident as reported in the Hoboken Reporter.

I as well as others, have stated at council meetings that a lawsuit could be avoided and the garage could be sold without a long delay, if the governing body would use their broad powers as the redevelopment agency by discarding the bids, meeting with all of the previous bidders, and by picking the one with the best deal to benefit all of the citizens of Hoboken. I felt that we left at least $4.6 mil on the table. The new round of discussion could have resulted in the garage being sold for a higher price. The majority of the council, as well as the Mayor, did not heed our advice.

Some contend that this lawsuit will force the City to borrow the $4 mil or defer it to next year's budget. Others, including myself, feel that since the developer's money is in the form of a bid-bond and not cash, the sale proceeds most likely would not be available in time for this year's budget and we will have a deficit for this amount in any event. Only time will tell us of the possible ramifications.

Although I don't like unnecessary legal fees, I feel that this lawsuit will have some positive aspects in that it will cause this matter to be completely fettered as to the legality of the bidding process.

Richard Tremitiedi 

Comments (0)

New comments are currently disabled.

Email to Friend

Fill in the form below to send this article to a friend:

Email to Friend
* Your Name:
* Your Email:
* Friend's Name:
* Friend's Email:
* Security Image:
Security Image Generate new
Copy the numbers and letters from the security image
* Message: