Hoboken Municipal Garage Sale

I am writing in response to Richard Tremitiedi's letter which appeared here on February 10. He summarized the controversial history of the Municipal Garage. He bemoaned that the City has opened itself to another lawsuit and has "left $4.6 million on the table" in its recent selection of a Garage site developer.

I agree at least with the early assessment in his letter. In 2005, it would be generous to describe the City's deficit-plugging sale and lease back of the garage as merely short-sighted. The resulting $120,000/month interest payment (for the past 18 months) is a testament to the wisdom of that decision. Beyond this, I cannot agree with Mr. Tremitiedi.

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.

At the December 13, 2007 Hoboken City Council meeting, Hani Ahmed warned that the Hoboken Municipal Garage deal would be challenged in court.

During a meeting last August, Developer Michael Kasparian, the owner of MDK Development, which previously placed two bids to purchase the city’s Municipal Garage site last year, questioned the city’s planning consultant Gordon Litwin over why earlier bids were disregarded by the city. MDK filed a lawsuit against the city earlier this week in which it alleges the city’s actions in the bidding process to be in violation of the Local Redevelopment and Housing Law.

THE GARAGE – Hoboken’s Municipal Garage, at the corner of Willow Avenue and Observer Highway, is costing the city $102,000 every month to lease, and if the current agreement survives the lawsuit, will one day be home to a 12-story, 240-unit residential complex.  
Just over a month after a divided City Council designated a developer to build housing on the Public Works Garage Site on Observer Highway, a competing developer and a Hoboken resident filed a joint lawsuit challenging the city's bidding process and choice of developer.

Developer MDK Development LLC, which bid $5 million more than the winning bidder for the site, is asking the Superior Court of New Jersey to order Hoboken to undertake a new RFP (Request for Proposals) process and force the city to return any bid security it has received from the chosen developer.

I'm pleased to say the protracted effort to sell the Hoboken Municipal Garage is finally moving forward, with many benefits ahead for the city and its residents.

As the second ward representative on the council you have entrusted me with your hard earned tax dollars. I take this responsibility very seriously and say clearly that the offer accepted by the council last week is by all measure the best deal for the City of Hoboken. My council colleagues and I accepted a bid that balanced the wants of the neighborhood with the needs of the city.

(Click image to hear HANY AHMED's comments to the Hoboken City Council regarding the garage sale)

If all goes as planned, Hoboken residents will soon become accustomed to a new, 8- to 12-story residential complex stretching from Newark Street to Observer Highway as a result of the council’s decision to approve the sale of the Municipal Public Works Garage during Thursday evening’s special session.  

After five years of discussions and setbacks, the City Council finally approved a resolution Thursday night to accept a $25.5 million bid for the city's 1.1-acre Observer Highway Public Works Garage.

In return, a developer will be allowed to build a 240-unit residential structure that will rise to eight stories along Newark Street and 12 stories along Observer Highway.

The Hoboken City Council voted down an ordinance Wednesday night that would have raised the allowable height for development at the city's municipal garage property on Observer Highway from nine to 12 stories.

But Mayor David Roberts said that raising the maximum would allow the city to sell the land for more money and use that money to buy park space elsewhere.

HOBOKEN - Officials at the state Department of Community Affairs pressed city officials about a $5 million revenue source for its 2006 budget after reading a story in Friday's edition of The Jersey Journal.

On Wednesday, the City' Council approved an ordinance nance to allow a paper corporation, NWF Leasing Corp, to take over a sale/leaseback agreement from the Hudson County Improvement Authority by borrowing $15 million from North Fork Bank, allowing the city to plug a $5 million budget shortfall.

The arrangement stands to cost the city an additional $600,000 to $700,000 a year in added interest and administrative costs.

As Chairman of the Observer Highway Redevelopment Advisory Committee, I would like to respond to last week's inaccurate letter by Hank Forrest.

Work on a plan for the Municipal Garage was not done in a "short time frame" as Mr. Forrest states. It began in April 2005 when the City Council proposed the creation of the OHRA Committee, later appointed by Mayor Roberts. The Mayor identified PPSA as the planning firm he wanted for the project -- the same firm Mr. Forrest often compliments for their work on the Master Plan.

Last night the Hoboken City Council closed the latest chapter in its saga of fiscal irresponsibility. The chapter started, as you may recall, last July 1 at the beginning of the fiscal year.

As the city overspent during the prior fiscal year they had to borrow $7.9 million and place a lien on the Observer Highway municipal garage. The garage land would eventually be sold to repay the loan. This started a dual process. On one hand the City Administration promised to create a realistic budget, which seemed possible since there are lots of new ratables (Condos) in town.

In the mad dash to plug a $5 million budget gap by June 30, a divided Hoboken City Council was left in a precarious position Wednesday night.

On the table were two bids from development groups that want to buy the city's municipal garage on Observer Highway and build high-end condos.

The council's lawyers deemed both of the bids - for $22.1 million and $18 million respectively - deficient. Yet, there were those on the council that wanted to approve the high bid as a way to instantly shore up the city's budget and reap a cash windfall.