Get out of town!
City may build new garage in Jersey City; approves $16M for possible bond
by Caren Matzner
Reporter Editor
Jun 20, 2010 | 2682 views | 0 0 comments | 15 15 recommendations | email to a friend | print
WHERE WILL IT GO? – The city is now considering two Jersey City sites in addition to sites in Hoboken for its public works garage.
WHERE WILL IT GO? – The city is now considering two Jersey City sites in addition to sites in Hoboken for its public works garage.

After selling their valuable Observer Highway public works garage site to a developer in 2005 without a new place to move the garage, the city has added to its list of options for where to erect a new facility.

Last week, the city received proposals to build a garage on at least two locations out of town, while they also approved potentially borrowing $16 million to buy back the original property if their sale to a developer falls through.

The long controversy started with an attempt by the city’s previous administration to fill a budget gap. Five years ago, the administration of Mayor David Roberts saw that the current site of the public works garage, on Observer Highway near the PATH station, could potentially bring in good money – after all, a developer could build condos on the desirable land near a commuter hub, while the city could put its garage anywhere, perhaps on cheaper, blighted property.

Belfiore said a company hired by the city to work on the southwest redevelopment plan has gone out of business.

Through a complicated financial deal involving a county agency buying the property and leasing it back to the city, the city was able to ultimately sell the Observer Highway property in 2008 to developer S. Hekemian, which hopes to put eight and 12-story residential buildings there. The deal is slated to close this summer.

There are only two problems: The deal still may not go through, and if it does, the city has to find a place for a new garage.

The list of potential spots has included a few residential areas in Hoboken – which has aroused the ire of neighbors who don’t want equipment repairs and garbage trucks in their back yard.

Last week, the city received bids from properties in and out of town where they could build a new garage, and also voted to borrow money in case the deal with the developer falls through and they have to buy back the original property.

Last week’s updates

Last week, the city discussed some of the proposals they received from owners of properties on which they can build a new garage.

“In our preliminary evaluation of it, we’ve got a couple of very, very good sites that we’re looking at,” City Business Administrator Arch Liston informed the City Council at their bimonthly meeting Wednesday night. “[They’re] non-residential areas, actually not within the city of Hoboken.”

The city posted, on its website, a list of the proposals, including two in Jersey City. The rest are various spots in Hoboken, including a former car towing yard at Sixth and Jackson streets, where neighbors have said they don’t want it.

The city has already gone public with some of the proposals that were considered in the past. Among them, the city is considering sharing services with other towns or with the Stevens Institute of Technology.

Councilwoman Beth Mason and Councilman Michael Russo have asked the council to avoid residential areas. Some have said that the pair were trying to scare constituents by focusing on potential locations that actually were not favored by the city, but because the city must negotiate in private, it’s unclear which sites they have been favoring.

Borrowing money

The council held two special meetings last week to vote for a $16 million bond resolution to pay off a loan from Capital One bank to avoid defaulting if the deal with S. Hekemian fails and the city has to buy back the land. The deal with Hekemian is contingent on environmental approval and other matters.

The vote was not on an actual bonding ordinance, but on a resolution to be able to pass a bond ordinance later if need be.

This past Sunday, at a special meeting, several council members withstood Mayor Dawn Zimmer’s entreaties for them to pass the bond. But by Wednesday’s regular meeting, Zimmer’s allies had won over the three council members who were initially reluctant to vote on it – Beth Mason, Michael Russo, and Theresa Castellano.

“This does not cost us anything to go ahead,” said Council President Peter Cunningham at Wednesday’s meeting, telling his colleagues that the vote was only needed in case the development deal falls through. “It’s a contingency. We still have to have that good-faith effort done to give Capital One assurances” about a financial backup plan.

City officials said that voting Wednesday, rather than closer to the end of the fiscal year (June 30), would save $150,000, because it will allow the city to participate in a special bonding pool with the county and get a lower interest rate.

The vote was 8-0, with Councilman Nino Giacchi out of the country on vacation.

“The council was in a position with our backs against the wall,” Mason said later in the week. “What no one wanted to admit that on top of defaulting on the loan, not passing the ordinance could actually mean that the city might end up with two properties on its books. It was a very disheartening position to have been in, but as elected representatives we must make the hard decisions and do what is best for Hoboken.”

The city will discuss its future garage sites at a special council meeting this coming Tuesday night.

Residents comment on garage vote

Not everyone was sold on the idea of the City Council voting on the bond resolution Wednesday night.

Perry Belfiore, a longtime local activist who has worked in development, said the city has been too quick to borrow money for projects that have taken too long.

He pointed to the still-vacant future park site at 1600 Park Ave., and to the long-delayed Pier C Park project that is now expected to open after summer ends.

Belfiore also said that a company hired by the city earlier this year to work on a potential redevelopment plan for the southwest corner of town has subsequently gone out of business. Council President Peter Cunningham said that the council had just discussed that in a committee meeting.

“Okay,” Belfiore responded flatly. “I’m so happy.”

He also said that many members of the public were suspicious of the city’s intent regarding where to put the garage. “People don’t believe,” he said. “They don’t trust. And when you lose the trust of the people, you can throw dollar bills, and people will think they’re counterfeit.”

Another frequent council meeting speaker, Moe DeGennaro, said he supported the city buying back the garage land and perhaps starting over with selling it.

“Let’s recapture the land, keep it as a garage, and decide what we’re going to do,” he said. “We should just pass the bond issue to get the property back.”

Third Ward resident Greg Lincoln, whose ward is represented by Russo, urged the council to vote for the bond resolution that night.

He reminded Russo that he was a Boy Scout and asked Russo for the Boy Scout motto: “Be prepared.”

After Lincoln left the podium, Russo said that another Scout tenet was to be courageous.

“I think certain council members should be courageous,” Russo said, “and make sure residents do not have the garage in their back yard.”

Caren Matzner can be reached at
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