North Arlington Ordered to Return Monies to Redeveloper on Failed Project
The Borough of North Arlington was ordered by New Jersey Superior Court Judge Jonathan Harris to return $2.4 million to Cherokee Investment Partners, which was a private redeveloper previously designated to undertake a municipal redevelopment project on Porete Avenue in the Borough. The ruling resulted from a trial which lasted for 5 days in March of this year.
The redevelopment area contained approximately 90 acres of land with historical industrial uses, but which the borough had agreed to acquire by eminent domain, in order for Cherokee to build homes and retail space, according to a redevelopment agreement between the developer and the Borough which was signed in early 2006. However, shortly after the agreement was executed, the parties developed differences which resulted in a “stillborn contractual relationship” as described by the judge in his opinion.
Through municipal officials elected after the original redevelopment agreement was made, the Borough had contended that it preferred rezoning the area, instead of allowing the high-density development which would have resulted from the redevelopment project. Cherokee filed suit in late 2006 after North Arlington failed to commence eminent domain proceedings to acquire properties despite requests from Cherokee to do so. Cherokee suggested that the Borough’s inaction was a “subterfuge and delay” tactic, while North Arlington Mayor Peter Massa testifed at trial that the Borough never sought to breach the agreement but merely wanted to renegoatiate its terms.
The $2.4 million to be returned consists of payments made by Cherokee towards the redevelopment project. Cherokee had sought $39 million to cover its costs, but the court ruled that there was insufficient evidence to support such an award.
Cherokee is the parent company to EnCap, the bankrupt Meadowlands redeveloper which was to transform nearly 800 acres of landfills in Lyndhurst and Rutherford into a massive $1 billion project with residential development and golf courses, but which collapsed last spring despite significant public financial support.
A copy of the recent North Jersey.com article regarding this decision can be found here.
