Developer withdraws from Nat'l Lead plan
LNR says economics of the project proved unfeasible
BY MICHAEL ACKER
Staff Writer

Sayreville's redeveloper for the 400-acre National Lead property has withdrawn from the project.

LNR Northeastern Invest-ments Inc., which the borough selected earlier this year for the $1.7 billion waterfront redevelopment, confirmed yesterday that it is "not currently pursuing the project" because "the basic economics of the proposed transaction proved unfeasible."

Randy Corman, executive director of the Sayreville Economic Redevelopment Agency (SERA), which is overseeing the redevelopment effort, said yesterday that LNR had not yet submitted a letter formally withdrawing.

"Their designation has lapsed, but we always said that the door is still open," Corman said.

LNR, in a statement issued yesterday to Greater Media Newspapers, noted that borough officials asked them to remain open-minded about future participation in the project, "and we intend to do so."

LNR's withdrawal comes after it failed to meet conditions related to a $37 million loan from Middlesex County that SERA used to purchase the National Lead site.

The primary reason LNR is pulling out, Corman said, is because it could not negotiate an agreement with the former owner on the cleanup of the site as quickly as was hoped. Though SERA owns the site, NL Industries is still responsible for the cleanup.

"Their whole approach to the project assumed that they could reach a quick deal with NL," Corman said, "and when that did not happen, they had to re-evaluate whether they still wanted to pursue the project. These things are not driven by personalities locally. They are driven by people who look at balance sheets in corporate headquarters."

The news has become a point of contention between the political parties on the governing body.

Republican Mayor Kennedy O'Brien held a press conference Monday and announced that LNR withdrew from the agreement. In response, he is calling for ethics reform, describing the current situation with the redevelopment as an urgent crisis.

O'Brien said he is concerned that the governing body has yet to adopt an updated ordinance on pay-to-play reform. Later Monday, during the Borough Council meeting, Borough Attorney Brian Hak said he expects to have the ordinance for the council to introduce by the agenda meeting Oct. 3.

O'Brien, whose reappointment to SERA was denied recently by Democrats on the Borough Council, said he was disappointed that the newly Democrat-controlled redevelopment agency voted to drop litigation, which would have allowed a judge to rule on the constitutionality of legislation, which allows the council to add two members to the redevelopment agency.

"Once the new appointments to SERA were installed, they promptly dropped the lawsuit," O'Brien said. "All they had to do was wait for the decision. All of the legal fees were paid."

Those legal fees amounted to $50,000 total for the borough and were one of the reasons for which Democrats said they dropped the lawsuit.

O'Brien said the legislation calls for two council members to join SERA, noting that because SERA is already at the legal limit of having three borough employees as members, they are stuck at eight members instead of nine.

O'Brien also raised concerns about the law firm SERA recently hired, Hoagland, Longo, Moran, Dunst & Doukas, which is a major contributor to the Democratic Party. He said the firm is in conflict, since it is special counsel to the borough for tax matters.

"I was removed from the process [of redevelopment]," O'Brien said. "The project manager of LNR said they are withdrawing from the project, and after years of work, we have nothing."

O'Brien confirmed that LNR could not resolve issues with NL, adding that NL has asked for what he described as an exorbitant price from the redeveloper in order to move forward with cleanup.

LNR, as a result, sought to increase the number of future residential units on the site - from 2,000 to 4,500 - as a possible alternative, since the economics of the project changed with negotiations.

Council President Thomas Pollando, a Democrat, responded to O'Brien's call for ethics reform by saying that the council and SERA are not what the mayor should be concerned with.

"That is great," Pollando said, "[O'Brien] should call for ethics reform on himself for the past seven years. The new people just got on [SERA]. The reason LNR pulled out was because they wanted to increase housing by 2,500. We knew the residents of Sayreville just do not want that."

Pollando said LNR notified the borough that the deal was in jeopardy a month prior to the council's decision not to reappoint O'Brien to SERA.

"The state of the deal was in jeopardy," Pollando said. "Twenty-five hundred more houses is not something the council nor the commissioners, old or new, would have gone through with."

Pollando described O'Brien's concerns as sour grapes over the council's decision not to reappoint him to SERA.

"The mayor should do an ethics review on himself," Pollando said, "because in the seven years prior, nothing happened. He was replaced because nothing was happening. I am disappointed that the mayor is looking to point blame because he is no longer on the agency. He needs to be the mayor he supposedly is, which he is not. Stop pointing blame and become a leader."

O'Brien, in turn, said the Democrats are taking control of the project in spite of the best interests of the borough.

"I have great concern that this will become a huge cash machine for Democratic fundraising," O'Brien said. "That does not serve the people of Sayreville well. They deserve a world-class project on the National Lead site."

Pollando said the borough has already heard from several other developers interested in the project.

"The question now is with NL and the cleanup. That is what we have to get past. That is what the commissioners have to take a hard look at [in order to] have NL work out their differences so we can get this under way. No matter who that developer would be, there will be the same difficulties," Pollando said.

Corman said the three other firms that were finalists when SERA was choosing a redeveloper earlier this year have already expressed interest in the project again.

"We want to move as quickly and as carefully as possible," Corman said. "The county did give us some additional time."

LNR has indicated to Corman that if they drop out, they will be as amicable about it as they can, Corman said.

"They indicated by e-mail that they are willing to settle all fees that they are responsible for," Corman said. "This is a very complicated project, and it would be unusual if this all came to fruition without a few bumps in the road. We have a few developers interested in stepping in, and I expect that we will be able to find a replacement in due course."

SERA is expected to discuss the redevelopment of the NL site at its workshop tonight at 6 p.m. at Borough Hall, Corman said.