Municipal budget and hotel project stalled

Budget awaits final adoption and council rescinds hotel redevelopment agreement to avoid further litigation

The Hoboken City Council canceled a redevelopment deal for the new Hilton Hotel and continued to wait for word on the municipal budget.
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The Hoboken City Council canceled a redevelopment deal for the new Hilton Hotel and continued to wait for word on the municipal budget.

Hoboken’s municipal budget has not been adopted as the city council awaits word from the New Jersey Department of Community Affairs which reviews all municipal budgets.

Several residents discussed the need for a tenant advocate after a memo from corporation counsel included in the council’s agenda noted that the budget cuts could result in the elimination of the position. The city council also passed a resolution which canceled a redevelopment deal with the developers of the new waterfront Hilton Hotel but also designated them as the conditional developer.

 The budget

The introduced $118.2 million budget was amended in an 8-1 vote during the May 1 council meeting, decreasing it to $117.4 million which would save Hoboken taxpayers money because it decreases the overall tax levy by $836,000 meaning the tax rate will increase only by 1.3 percent instead of the projected 2.8 percent in the original introduced budget.

Council members-at-Large James Doyle and Emily Jabbour introduced another budget amendment, which would cut spending only by about $240,000.

Doyle said he would not have voted for the previous budget amendment and did so because he thought the administration had agreed to the changes.

He also said that because the amendment was introduced during the last meeting, he did not have enough time to review it.

Jabbour said she felt the new budget was retaliatory in some ways.

The introduced budget includes a decrease of $115,000 in the mayor’s office.

“I think some of the items included in the budget that was discussed at our last meeting are quite targeted in a way, an overreach, a  thinly veiled attempt to seek revenge, I guess I’ll call it,” she said. “I just don’t think it’s our place to tell some directors that they can give salary increases to some staff, but in some places we’re telling people that they can’t have salary increases. I just don’t think that’s our role.”

The new amendment failed by a vote of 2-7, with Doyle and Jabbour voting yes.

This came after members of the public discussed the budget, noting that while they approved of the more conservative spending plan, it could mean the tenant advocate position would be eliminated.

This is according to a memo from Corporation Counsel Brian Aloia to Business Administrator Stephen Marks dated May 7, which discusses the council’s $139,000 budget cut to the legal department’s proposed budget.

In the memo, Aloia states that he originally requested $45,000 for the tenant advocate and the council approved a resolution for $15,000 earlier in the year for the position but the Tenant Advocate has already billed the city $13,538 for legal services.

“Therefore, I have directed the Tenant Advocate to stop working once the remaining $1,462 approved by the council is depleted,” states Aloia in the memo. “As part of our conversation, I also requested he continue to provide services for his current clients until completion of their matters. Because I believe the Advocate position is important, I will revisit the potential of asking the council to approve additional funds for the Tenant Advocate position in four or five months if it appears that I will have enough money in the budget to cover this cost.”

“It’s my understanding that this is in fact what has been presented, that the tenant advocacy position is recommended to be cut,” said resident and Rent Control and Stabilization board member Cheryl Fallick. “With that said, I am supportive of the budget, but I also think every single council person should rise up against this lunacy … This is one area the city of Hoboken should be spending a lot more money and investing a lot more time, energy, and effort.”

“I would encourage the mayor and administration and corporation counsel to put that back on the budget at the next council meeting” she added, noting that the people who are least served in the city are “the ones being attacked.”

Hotel project stalled

The city council unanimously voted Wednesday night to cancel a redevelopment deal with KMS Development partners after the city came under legal fire when two Hoboken businesses filed a lawsuit against the city stating that the deal which included roughly $4 million in givebacks promoted cronyism and was a “blatant quid pro quo.”

The $4.85 million in community givebacks from the developer would have included $1.165 million for infrastructure upgrades, $1 million to fund the endowment for the Hoboken Public Education Foundation (HPEF) to support the public school system, $485,000 divided evenly among the three charter schools in Hoboken, $200,000 into the Affordable Housing Trust Fund, and $2 million to help revitalize the Hoboken Community Center (the former YMCA building).

In March the trial court judge denied a motion by the city and KMS Development Partners to have the lawsuit dismissed.

According to Council President Jen Giattino, the resolution to nullify the redevelopment agreement aims to end the litigation.

The resolution reinstates KMS as the Conditional Redeveloper of the Hoboken Post Office Rehabilitation Area.

It also states that the city and KMS will negotiate a new deal within a 120-day period.

If the city decides that a new deal cannot be negotiated, the city can terminate the conditional designation.

The hotel would have been approximately 200,000 square feet and include 20 occupied floors for a total of 350 rooms.

It also would have included ground-floor retail, a second-floor restaurant and bar, meeting and banquet space for 250 people, a rooftop bar and terrace which residents can access 300 days a year, and underground storm water detention of more than 8,000 gallons.

For updates on this and other stories check hudsonreporter.com and follow us on Twitter @hudson_reporter. Marilyn Baer can be reached at Marilynb@hudsonreporter.com.