Boro talks with NL, potential redevelopers
SERA weighs idea of seeking new proposals for 400 acres on river
BY MICHAEL ACKER
Staff Writer

A month after Sayreville's chosen builder dropped out of the National Lead redevelopment project, officials are considering asking for new proposals.

The borough is also reaching out to the other redevelopers that sought the project earlier this year.

Meanwhile, borough officials announced they have had successful talks with one party, the owners of National Lead (NL) Industries, who remains in charge of cleaning up contamination on the 400 acres along the Raritan River. The Sayreville Economic Redevelopment Agency (SERA), now controlled by Democrats, last week announced there has been a change in the borough's approach to negotiations with NL.

SERA issued a press release Oct. 26 stating that its professional staff was directed to approach National Lead in late September "with the goal of moving away from the adversarial confrontation that has marked the relationship between SERA and NL over the past several years."

The borough last year condemned the long-abandoned NL property in court.

Earlier this year, the borough selected LNR Northeastern Investments Inc. as the redeveloper, and was working toward a formal agreement when the developer withdrew, saying "the basic economics of the proposed transaction" were unfeasible.

The company had planned a $1.7 billion mixed-use project, part of which would include 2,000 residential units, SERA Executive Director Randy Corman said. The firm later asked to increase that number to 4,500, which officials felt was far too many.

"LNR could not make the deal work with the number of residential units they originally planned," Corman said. "They had offered a number of different options."

In addition to the prospect of more housing, the firm discussed the idea of establishing a PILOT (payment in lieu of taxes) program with the borough, in order to cover the cost of infrastructure. The latter option would allow the redeveloper to pay the town in the amount of 2 percent of the fixed amount of the development's value, in lieu of paying regular property taxes.

"SERA could not promise any of these things," Corman said. "That would require action on the part of the mayor and council. There was simply no desire for borough officials to change what LNR had originally proposed."

Republican Mayor Kennedy O'Brien has told the Suburban that one of the reasons LNR dropped out of the redevelopment process was because NL asked for an exorbitant price from the redeveloper in order to move forward with cleanup.

In last week's press release, SERA says that NL has received its less adversarial approach to talks positively, and that the agency has had several discussions with NL in the past few weeks.

While commissioners would not go into detail and NL Attorney Christopher Gibson could not be reached yesterday, SERA's stated goal with these discussions is to resolve its differences with NL in the hopes of accelerating the cleanup and redevelopment of the former paint manufacturing site.

"While much work is still to be done, the initial discussions between the parties have been positive," SERA said.

The other three developers competing with LNR for the project earlier this year have all expressed interest again, Corman said. He said he could not offer details of the progress with the prospective developers at this point.

When choosing LNR last March, SERA used a ranking system that incorporated a variety of criteria. Forest City Enterprises, of Cleveland, was ranked second, while V. Paulius & Associates, of Allendale, was third, followed by The Spector Group, of North Hills, N.Y. Some of the reasons those firms were not chosen included vagueness of fiscal impact analysis, doubts regarding feasibility of the project, too many residential units proposed, and a lack of effort to meet SERA's desired "Baltimore Inner Harbor" model.

"We have heard from the other three developers," Corman said, "and we have also heard from a number of other developers."

SERA can decide to take action that is analogous to going to the next lowest bidder and choose from the other competitors that responded to the borough's original request for proposal [RFP] or it can issue what Corman called a "mini-RFP."

"There are two ways that we can go," Corman said. "We can go to one of the other three finalists or we could open up to other developers for a shortened RFP process with a quick turnaround time."

The shortened RFP process would require fewer details in the plans, he said. It would focus more on the financial ability of the developer to complete the project.

"These are the decisions that the commissioners need to weigh," Corman said. The borough, he noted, owes Middlesex County the $39 million it borrowed to condemn National Lead. The county has extended the full payment deadline to next April.

"We are fast approaching the point where a decision needs to be made. The county deferred some of the payments, but there is still a deadline," Corman said.

If SERA decides to begin another RFP process, it would have to request new proposals by early 2007, Corman said.

SERA Commissioner Michael D'Addio told the Suburban he thinks the Borough Council's decision to not reappoint the mayor to another term on SERA has benefited the agency, adding that SERA is better off with exclusively Democratic representation.

"We have had more progress in the last five months without the mayor then we have had in the last five years," D'Addio said.

O'Brien took exception to those comments.

"Mr. D'Addio has been a commissioner for five years," O'Brien said, "so he must have been napping during the meetings."

D'Addio said it was Democratic Council President Thomas Pollando who reached out to SERA's professionals and commissioners and urged them to work with NL to find a resolution.

"It turned out to be a positive step," D'Addio said. "The facts speak for themselves ever since we got a new law firm and new commissioners working together."

D'Addio said he understands O'Brien's reason for "lashing out."

"We are making progress without him. The mayor is not a necessary member," he said.

The council's Democratic majority denied O'Brien's reappointment last summer, making room for the agency to replace him and two other SERA members with Democrats. SERA then voted to drop litigation that challenged the constitutionality of state legislation that allowed the council to add two of its own members to the agency.

Democratic Councilman Dennis Grobelny, who was added to the agency this year, said the redevelopment process will benefit from more open dialogue.

"Five years and this is the first discussion we have had with [NL]," Grobelny said. "They want to see this done, and we are going to work together."

But O'Brien said discussions with NL are nothing new, and added that he hopes discussions bring about an amicable agreement that leads to the cleanup of the site.

"This has been going on for 20 years," O'Brien said. "My predecessors long ago started making the trip to NL's door to get this thing going. It is certainly not new, but I am a born optimist. I certainly hope something positive comes out of it."