The deal’s off — at least for now. InterCap Holdings has sent a letter to state Superior Court Judge Linda Feinberg asking her to reinstate its transit village lawsuit against the township.
InterCap CEO Steve Goldin says the township forced his hand after the council failed to introduce two ordinances on July 18 that would have effectuated the agreement settling the legal dispute between West Windsor and InterCap over the company’s property in the redevelopment zone.
According to InterCap, the settlement agreement — approved on July 11 — required that the ordinances be approved by July 18. InterCap is adamant that it will not re-enter negotiations on the settlement or the ordinances.
Councilwoman Diane Ciccone, who cast the deciding vote on the settlement agreement in a 3-2 vote on July 11, appears to be the person who has turned the situation on its ear.
Ciccone had only agreed to vote for the deal after negotiating with InterCap during the meeting and getting the developer to include for-sale affordable housing units in the plan. The final settlement agreement included 800 total units with 98 affordable units — 80 of which are rental and 18 of which are for sale.
But several days later, Ciccone said that she didn’t support the ordinances because she felt changes needed to be made. She also said that she was unable to attend the July 18 meeting because she was out of town and could not call in.
Ciccone 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. 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.
Subsequently, the ordinances were pulled from the agenda on July 15, and during the meeting on July 18, other council members also said they wanted to submit their own suggestions for revisions to the ordinances before they could support them. Council members were expected to submit their concerns and revisions to Township Attorney Michael Herbert by the weekend of July 23.
Meanwhile, InterCap filed its letter with Judge Feinberg to reinstitute its prior litigation on July 19. InterCap has requested 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 ruling in the developer’s favor could, in the worst case scenario for the township, 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., has said in the past that the developer will re-file a previous lawsuit that challenged the old commercial zoning of the property.
“As plaintiff has expressed to counsel for the township, plaintiff remains willing, now and without prejudice to plaintiff’s ability to withdraw such consent in the future, to abide by the terms of the amendment,” Hoff noted in his letter to Superior Court Judge Linda Feinberg on July 19 — one day after the council meeting. “However, plaintiff needs finality, and the only path to such finality is through litigation rather than deferring such litigation while the township continually alters its settlement positions without end.”
Then in a letter to the township, Hoff, of the Bisgaier Hoff law firm of Gibbsboro, notes that prior to the July 11 meeting, when the council approved the settlement agreement, InterCap acceded to new demands by the council to withdraw a $900,000 contribution from the township’s affordable housing trust fund to offset additional parking costs. Then at the meeting, InterCap agreed to more concessions related to the affordable units.
“No mention, at the time, was made of any further demands by the council and, particularly, those voting to approve the amendment,” the letter states. “Of course, as we now know, the council’s adherence to the terms of that amendment was short-lived.”
Not only did the council fail to introduce the accompanying ordinances to implement the settlement, but at the July 18 meeting, council also criticized “the manner in which it had already approved the amendment and, more troubling, to raise additional concerns relative to the terms of the original agreement,”said Hoff.
Negotiating further over the ordinances is “in express violation of the terms of the amendment, and further, a disappointing and unacceptable turn of events.”
Hoff told the township that if and when the council “fulfills its commitments under the amendment, and if at that time the plaintiff has not withdrawn its commitment, we will have a deal.”
“However, plaintiff, having been to the altar twice and abandoned twice, is not going a third time,” Hoff added.
Goldin speculated in a statement that further litigation would cost the township $1 million more and result in cuts to township services.
“Because council members Ciccone, Geevers, and Morgan have placed their political ambitions above those of township taxpayers, residents can now look forward to even more litigation and cuts in municipal services to pay ever-increasing legal bills,” said Goldin.
“West Windsor residents will have sacrificed the creation of a community gathering place, with shops, restaurants, and a new farmers’ market, $2.7 million in developer-funded roadway improvements to fix existing traffic problems and $700,000 to defray township redevelopment costs to date,” Goldin added. “After spending $1 million in taxpayer dollars so far, all that West Windsor will have to show for it is another $1 million tax bill and even more painful litigation.”
During the July 18 meeting, Council members Linda Geevers and Charles Morgan criticized the process to approve the settlement agreement and expressed concerns with the ordinances.
“The process was really, really inappropriate,” said Morgan. “We were negotiating from the dais,” he said, referring to the July 11 meeting.
Referring to InterCap’s termination of the agreement, he said “the council should not be responding to threats.” When he read the ordinances prior to the following July 18 meeting, he found mistakes.
“They were not ready to be introduced tonight,” Morgan said. “We have a broken process where we’re trying to do things too quickly. If we had done it in a way that was orderly and professional, we may have had ordinances introduced tonight.”
Describing the process as a “game of chicken with Mr. Goldin,” Morgan said that “District 1 [in the township’s redevelopment plan] begs for a redeveloper; Mr. Goldin is the guy.” But the way the process has been handled by both parties was inappropriate. He said a fiscal analysis of Goldin’s proposal could have been done, despite the “moving parts” of the agreement. “It may have been laborious, but it is not impossible.”
“I voted against the settlement agreement because we had not done our homework, not because I was opposed to it fundamentally,” Morgan explained. Pointing to the negotiations at the last minute, the deal was too rushed, he argued.
Morgan said the council should do its homework this time, before introducing the ordinances.
Geevers said she felt the entire process involved seeing “what we can do to make one person happy. What about the rest of us?”
She said the council should have waited before rushing to approve the settlement agreement. She also said two of the council members should have been at the negotiation table — which was lacking throughout the entire process.
Council President Kamal Khanna acknowledged there have been issues raised with the ordinances and the Planning Board’s recommendations on the ordinances. “We do need more time to answer all these questions,” said Khanna, who advised council members to get their comments to Herbert by the weekend.
Original Vote. 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 11th 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.
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 if it satisfied Mount Laurel principles and the Fair Housing Act.
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 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 Hoff 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-income 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, a West Windsor resident, 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.
Residents’ Opposition. Discussion on the settlement spanned four hours prior to the approval of the settlement agreement. 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’s contributions will reimburse the township for money spent on the redevelopment plan and 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 was 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, 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, a former member of council and the Planning Board, 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.”