Jersey City has rejected an offer from a real estate developer to pay nearly twice as much as a partnership involving former Gov. Jim Florio for a chromium-tainted Garfield Avenue property, saying the bid came long after the contract with Florio's group had been signed.
After reading in a newspaper article that the Hampshire Redevelopment Co., which includes Florio and former state Department of Environmental Protection Commissioner Christopher Daggett, had agreed to purchase the 13-acre vacant lot from the Jersey City Redevelopment Agency for $1.1 million - which is 38 percent of its assessed value - Kenneth Esdale offered the JCRA $2 million.
But the agency's legal counsel sent a letter to Esdale's attorney, Nicholas Khoudary, informing him that the sale to Hampshire is a done deal.
"Unfortunately, your client's offer is untimely since there is a valid, subsisting agreement to . purchase the property," JCRA attorney Joseph Kealy wrote in the letter, dated Monday.
Esdale, who called the sale to the Florio partnership "an absolute hand-off" vowed legal action.
"That property's a steal," Esdale said. "That land's worth $5 million to $8 million in my opinion."
The property, on Garfield Avenue, just off Carteret Avenue, in an industrial area adjacent to a stop on the Hudson-Bergen Light Rail station, is now fenced off and littered with debris. Its soil is contaminated with chromium, a legacy of its previous owners, PPG Industries Inc. and Public Service Electric & Gas. Those two companies have accepted responsibility for the pollution and have begun to clean it up.
Critics, including Esdale, argue that Hampshire should not get such a substantial discount when PPG and PSE&G are doing the remediation work.
But Florio and officials from the city say Hampshire is taking on some costs associated with the cleanup, including various environmental impact and engineering studies, as well as picking up some administrative costs for the JCRA.
Besides, they say, Hampshire is buying a property that has sat vacant for years.
"We haven't had 10 people running to us wanting to do something with that property," said Mayor Glenn D. Cunningham.
Cunningham praised Florio's group for seeking to develop a contaminated "brownfield" site in an area that has been sorely lacking in investment in recent years.
"It would be the first property that improves property values in an inner city," he added.
Florio made a similar point when asked about the property, saying he and his partners were taking a risk and getting a property back on the tax rolls that sits in a blighted area.
But Esdale said he thinks even the assessed value of $2.9 million is too low for a property in an up-and-coming area so near the light rail. Hampshire is expected to lure some kind of "big box" retail outlet to the site.
"That property is going to throw off millions of dollars a year after cleanup is complete," he said.
But those involved in the deal, which at one time was said to have included the possibility of selling the land for $1, say no matter what offers come rolling in now, the city can't go back on its agreement.
"We signed a contract," said Steve Lipski, chairman of the JCRA. "We can't go back and second-guess."
But second-guessing is just what many are doing now, including those who are concerned that the plan to "cap" the chromium beneath the soil is an inadequate remedy, no matter who owns the land.
In a letter sent to Cunningham, state Assemblyman Lou Manzo, who made a name for himself in the late 1970s as a health officer in Jersey City targeting chromium contamination, asked that any approvals be frozen until the city can explore more options for cleaning up the land.
The DEP has already put a moratorium on sending out "no further action" letters - which essentially certify a chromium site as clean - for at least six months because of questions raised about the quality of the science used to develop standards for acceptable levels of the toxin. It is unclear how that will affect the Garfield Avenue property.
Manzo said any remediation that does not "neutralize" or remove the chromium entirely "would continue to pose serious health risks to adjacent neighborhoods."
By Jason Fink
Jersey Journal - 3/31/2004