The deal’s off.
Apparently sick of the delay and political maneuvering by members of West Windsor Township Council, InterCap Holdings CEO Steve Goldin says he will pull the plug on the settlement agreement approved on July 11 if council does not follow through with introducing the accompanying ordinances on Monday, July 18, which is very unlikely to happen.
Instead, Goldin has said he will be requesting a "case management conference" to proceed with a review of the township’s redevelopment study. This will set the stage for the developer to perpetuate the litigation by challenging the township’s designation of the 350-acre Princeton Junction train station area as "in need of redevelopment." A rule in the developer’s favor could, in the worst case scenario, void the township’s redevelopment plan.
Nullifying the redevelopment plan would pave the way for InterCap to seek to have its previous zoning also voided. If the redevelopment plan or process is invalidated, attorney Richard J. Hoff Jr., of the Bisgaier Hoff law firm of Gibbsboro, has said in the past that the developer will re-file a previous lawsuit that challenged the old commercial zoning of the property.
The settlement was jeopardized after it appeared the Township Council does not appear to have enough "yes" votes to introduce ordinances on Monday, July 18, that would enact the settlement agreement.
Councilwoman Diane Ciccone, who helped the agreement pass, 3-2, will be out of town on July 18, when the council was scheduled to introduce the ordinances. In addition, Ciccone has told the News that she will be away on a business meeting and cannot call in to vote.
Even if Ciccone were available, though, it is unlikely the ordinances have her support as written. Ciccone, who voted for a prior settlement agreement, voted against prior ordinances enacting the original settlement.
She told the News on July 15 that the issues she had raised with those ordinances were still valid. "Unless they have changed, my vote is not going to change," she said. "I just picked up the packet [of documents for the upcoming agenda]; I’m clearly not going to get to it until Sunday night, if I’m lucky."
"If they’ve made any type of substantial changes I can support it," said Ciccone. But when the original ordinances were adopted in March, the Planning Board made a list of recommendations for changes to the ordinances that "I fully endorsed." Ciccone wants those issues to be addressed in the new ordinances before she can vote favorably.
The possibility that future families occupying the affordable units in the Princeton Junction transit village may not have had the chance to follow the American Dream and own a home — and would have only had the chance to rent — nearly caused Ciccone to vote against the revised settlement agreement. The agreement was approved in the eleventh hour on July 11 — but only after officials from three parties involved in the settlement agreed to replace some of the affordable rental units with for-sale affordable units.
The final settlement includes 800 total units with 98 affordable units — 80 of which are rental and 18 of which are for sale.
However, Ciccone’s pending absence on July 18 forced Council President Kamal Khanna to remove the accompanying ordinances from the agenda for the upcoming meeting, which jeopardizes the settlement.
InterCap has said the deal would be off if the ordinances, which would enact the terms of the settlement in the township’s code, were not introduced immediately after approval of the settlement agreement.
Reached earlier in the day on July 15, Khanna said, "We’re still trying to figure out a schedule because one of the council members is not here Monday, and she is not available on the phone. If we can resolve it by 5 p.m. (on July 15), we will put it on the agenda. If we can’t resolve it, we will have to postpone it until Monday, August 1."
"There’s a problem with that because it upsets Steve (Goldin) of InterCap, but there’s only so much we can do," he added.
When asked whether the redevelopment agreement becomes invalid if the ordinances are not introduced on Monday, July 18, Khanna said, "I have not seen the piece of paper personally, but that’s what Steve was insinuating."
Responding to the news, Councilman Charles Morgan, who voted against approving the settlement agreement on July 11, says he would vote for the ordinances "but only if it’s changed to address my issues."
"They’re talking to the wrong person," he said. "They should be talking to me because I voted for the ordinances back in March and against the Planning Board resolution, which recommended various changes in the ordinances."
Among the issues Morgan has with the ordinances is that they do not contain a definition of "bedroom," when referring to housing units. In the past, council members have tried to protect against an influx of school-aged children by limiting the number of bedrooms in new housing developments.
"If it goes on the agenda on Monday, it doesn’t have a chance of passing," said Morgan.
"This is bizarre, and it’s wrong," said Councilwoman Linda Geevers. "I suggested a couple of times during the meeting to wait and get back to the negotiation table with at least two members of council present. That has been the problem the whole time — the council has not been at the negotiation table, and neither has the mayor for the most part."
"I don’t understand why we had to rush to have a vote [on the settlement agreement on July 11]," added Geevers. "The discussion just prior to the vote was out of order. It should have been done in executive session. There was no opportunity for other council members, particularly Charlie Morgan and myself, to give input, and now we’re left with ordinances that she can’t support. It’s a total reversal of her vote."
"Now the very person who tried to do a public negotiation is now saying she doesn’t support the ordinances and refuses to call in," added Geevers.
By the end of the day, though, Goldin’s attorney filed a letter saying he received the request of the council to be allowed until Monday, August 1, to introduce the ordinances.
"Plaintiff will not consent to the revised schedule and if the necessary ordinances are not introduced for first reading on July 18, 2011, per the terms of the parties’ amended agreement, plaintiff will terminate the agreement, and we will be requesting a case management conference to establish an appropriate discovery schedule in this matter, including, the township’s prompt furnishing of an amended redevelopment study," the letter stated.
Shortly after the redevelopment agreement was approved on July 11, Goldin was supportive of the council. "We are grateful for the leadership and support demonstrated last evening by council members (Kamal) Khanna, (George) Borek, and (Diane) Ciccone," said Goldin after the meeting. "By putting the interests of West Windsor taxpayers first, it takes West Windsor another step closer to enjoying the new shops, restaurants, and public gathering space the public has for so long desired."
West Windsor had approved a settlement agreement in November, 2010, with InterCap. The plan called for 800 units with 760 market-rate units and only 40 affordable units — all of which would have been for-sale units.
Then the Fair Share Housing Center, which serves as an affordable housing advocate throughout the state, challenged the settlement. All three parties had been negotiating new terms for the agreement up until the July 8 court hearing.
The Fair Share Housing Center wanted more than just a 5 percent affordable component, and it wanted the opportunity to provide more rental possibilities during a time when mortgages are hard to obtain, even for market-rate buyers.
First, officials negotiated a plan that would have contained 820 units, with 100 being affordable rentals. Then on July 8 the plan was whittled back down to include 800 units, with 12.2 percent, or 98 units, being affordable rentals. Of the 98 affordable units, 50 percent would be moderate, 40 percent would be low, and 10 percent would be very low.
To make it more financially feasible for InterCap to build the additional affordable units, West Windsor originally agreed to use $900,000 of its $1.8 million affordable housing fund — a fund that accumulated from developer contributions — to pay for structured parking for the affordable housing units.
The revised plan was approved by Superior Court Judge Linda Feinberg on July 8 — subject to Township Council approval. InterCap agreed to the settlement under the condition that it be approved by the West Windsor Township Council no later than July 11. Because the InterCap litigation was filed in May, 2009, as a Mount Laurel affordable housing lawsuit, Feinberg had to conduct a fairness hearing to determine it satisfied Mount Laurel principles and the Fair Housing
However, heading into the July 11 council meeting, the developer agreed to drop the requirement that the township spend $900,000 to build the structured parking, after some council members voiced concerns behind the scenes.
But by 10:45 p.m. on July 11, it was clear that there were not enough votes of approval — unless Councilwoman Diane Ciccone could be assured that at least some of the families living in the affordable units could have the opportunity, at some point, to own a home at an affordable price.
"We have children in this township; they cannot afford to live here," she said. Responding to comments from residents who said that areas where affordable units are situated see more crime, she added: "It does not mean they are criminals."
"I do think we need to be a town that lives up to the standard that affordable housing is important to us," Ciccone added. "But they should have the opportunity to buy. I want to vote for this, but I want to see something more for people who might want to buy in this area" at an affordable price.
Throughout the meeting, council members, particularly Ciccone, kicked around the possibility that the plan could include a program that provides the "option to buy" or a rent-to-buy program, which officials said would be hard to do. In addition, it is even harder for a developer to obtain financing for a development when it is not certain whether the units will be rental or for-sale in the future, they said.
Frank Piazza, the township’s affordable housing consultant, also told the council that it is hard to find a property manager for the apartment component of the site when a number of rental units may convert to for-sale units later on.
When it became clear that the vote would have been 3-2 to turn down the settlement, Khanna asked Richard J. Hoff Jr. of the Bisgaier Hoff law firm of Gibbsboro, the attorney for InterCap, whether his client would accept some for-sale affordable housing units on site.
Hoff told the council that he could make a phone call to his client, but it was the Fair Share Housing Center that had asked for the rental units. "The stumbling block is sitting over there," he said, pointing to Adam Gordon, the attorney with the Fair Share Housing Center.
Gordon agreed to breaking down the affordable units to include 80 that are rental and 18 that are for sale, and Hoff obtained approval from InterCap to go along with the revision — with the stipulation that the for-sale affordable units come from the portion that are "moderately" priced. In addition, no more than 35 percent of the units in each of the residential buildings will be affordable. The percentages of the moderate, low, and very low units will remain the same.
The fact that the negotiation took place at 11 p.m. — after most of the 30 residents in attendance went home — rankled Geevers, who was opposed to the agreement because she felt it was being rushed through by the administration and the developer.
Geevers pointed to the redevelopment plan, which calls for a financial study of the project before moving forward. That InterCap has not provided a fiscal impact study — as residents in attendance called for — and that it will be provided instead at the site plan is "very late. What if it’s not tax-positive?" she asked.
Geevers said most of the discussion the council has had on the settlement was in executive session, and July 11 was the first time it was discussed publicly. "As a matter of process, I think it’s unfair the administration agreed to force us to vote tonight," she said. "It shouldn’t be rushed and pushed through."
She pointed to the total $2.6 million InterCap will pay the township for road improvements and the $683,000 in developer fees. The township engineer had already estimated the total cost of improvements associated with the project would be $3.3 million. "We are not getting any extra funds we wouldn’t already be guaranteed to receive," she said. Geevers suggested two council members be appointed to continue negotiating with InterCap over the next month.
Morgan also voted against the project, saying that he was given "no opportunity to discuss it before tonight. That’s frankly obscene." He also alleged that the council was violating the rules of order for the meeting by negotiating with InterCap at the dais during the council comment period.
Morgan also said he wanted the ability to continue negotiating with the developer. Because the township already has a redevelopment plan adopted, it will need a developer to build the project, and to fail to work with Goldin would get rid of that development opportunity, he said. "I feel compelled to negotiate with him — but not with a gun to my head," he said. "The bottom line is I don’t think we are in a position to vote tonight."
Khanna and Councilman George Borek pointed to continued litigation costs that could occur if the agreement was not adopted. "What we have is the best scenario," said Khanna. "I think it’s about time that we move forward."
If introduced, the ordinances will head to the Planning Board, which has 45 days to review the ordinances and make recommendations, if any, to the council before adoption.
The approved settlement agreement also reflects a change in the number of parking spaces for residential units, which will decrease from 1.5 parking spaces to 1.4375 spaces for each unit. The new settlement also reflects an agreement to extend the affordable housing controls for affordable units from 30 to 35 years.
Under the terms of the agreement, there will be no separate building for the affordable units. The 98 units will be dispersed throughout the project. All of the other elements of the November, 2010, settlement will go into effect.
The most notable feature of the settlement is a 50,000-square-foot "promenade" that would provide a public area for residents and a "shared space" between cars, pedestrians, and bicyclists. The integrated development would not include any office space. Under the agreement, InterCap will construct 70,000 square feet of retail space correlated to the phasing of residential units.
InterCap, Goldin, a township resident, had sued West Windsor over the redevelopment designation of the 350-acre area around the Princeton Junction train station, which included InterCap’s 25 acres off Washington Road.
Discussion on the settlement spanned four hours. A majority of the 30
residents attending the July 11 meeting were opposed to the settlement. Most of them said a fiscal impact study was needed before the town moves forward with redevelopment.
Resident John Church criticized supporters’ characterization of the settlement as "fair."
"The word `fair’ in the English language is subject to many interpretations," he said. Church said he attended all three of the hearings in front of Feinberg, where the negotiations were conducted by lawyers for all sides. Two council members attended the meeting but were not invited to negotiate, he said. "The most important constituency of all was not at the table" — West Windsor taxpayers. "Tonight we’re not in Superior Court. We’re in the people’s court of West Windsor Township. In my opinion, this settlement is ill-advised and not fair to our township as a whole."
Church said the concept of 800 units was excessive, especially given that the site was located in a noisy, low-lying piece of land that was "never considered to be suitable for residential housing." The plan requires affordable rental units "despite the fact that our township has been very good with affordable housing."
None of InterCap contributions will pay for the money already spent to come up with the redevelopment plan and pay the lawyers, he said. "If you’re standing on the edge of the Grand Canyon, moving forward is not an option," he said.
Resident Mike Baxter said the council needed to ask a few questions, including determining why the township as doing the transit village, what was in it for current residents, and how much it will cost. "If people want to use the shops, where are people going to park?" he asked. He also asked how the township can guarantee the project will not increase taxes. "The developer needs to provide us an estimate," Baxter said. "We never got one." Baxter suggested deferring the vote for four weeks while the township conducted a financial analysis.
"The concern I have is with approving an ordinance change," said resident Christine Bator, who said the redevelopment plan was being altered for one project, especially without a study of the costs to the township. "I’m not opposed to this project in particular," she said. "I just think we need to be fiscally responsible when making these changes."
Resident Marshall Lerner recalled the platform on which Borek and Morgan ran in 2007, which adamantly opposed the 1,000 units originally contemplated for the redevelopment area. "It’s up to you, George, to deliver on those promises," he said. "Promises, after all, are a measure of a man."
Lerner also criticized the work of Planning Attorney Gerald Muller, who helped the township draft the redevelopment plan and has negotiated with InterCap in the settlement. Lerner pointed to an earlier document from Muller that said the redevelopment plan "will be bulletproof" against a "builder’s remedy" lawsuit filed by developers to force the municipality to include more housing.
Given that West Windsor was in court, "I would wonder how well we stand up" to the statements, he said.
Not all residents were critical of the settlement. Resident Alison Miller said she was happy with the percentage of affordable housing units in the new settlement and the way they would be integrated. "All of this is important to make this project successful," she said. With regard to the 800 total units, "I cannot imagine a real world situation where that number could go down."
However, she asked the council to ensure that any successor to InterCap would be bound by the same rules in the settlement and accompanying ordinances and that a definition of bedroom would be included. Officials said the definition would be included when the project goes for site plan approval before the Planning Board.
Jean Jacobsen, a resident and the chair of the township’s Affordable Housing Committee, said the committee unanimously supported the settlement. She also said that "if we reject the settlement, it seems quite likely we will have additional litigation," which will require use of more taxpayer money.
If the ordinances are adopted, the time line then falls into the hands of the developer, who can bring a site plan to the Planning Board any time after that. "Once you get to the Planning Board level, there will be a more specific review," said Mayor Shing-Fu Hsueh. "At that point, they will have to provide more traffic impact analysis and a financial impact analysis and specific designs."