It’s a true life political horror story that opens with sound bites and fury and ends with the dirge of a done deal.
The monster is a $376 million New Jersey State office project that could have been a dream come true for the beleaguered capital city but turned into a nightmare.
The saga opens on a bright day in September, 2016.
Governor Christie is back in Trenton after a failed presidential bid that has him — once arguably the most popular Republican in the nation — now toadying to presidential candidate Donald Trump for a job in Washington.
Christie is also facing the last year of his governorship amid grave-deep approval ratings — thanks to Bridgegate, indictments in his inner circle, apparent opportunism, and poor stewardship of the state’s finances.
But then at the groundbreaking for the Roebling Lofts project in Trenton, the governor suddenly goes into upbeat mode and announces good news for Trenton.
“Through the demolition of existing state office buildings, we are paving the way for the West State corridor to welcome new private investment and generate economic development opportunities that will create jobs and help build a dynamic downtown environment,” he says.
The plans call for razing the offices of health and agriculture and taxation and replacing them with two new buildings in a manner that would reduce “the non-taxpaying footprint that we have here in Trenton.”
Then the surprise project continues to surprise when it is put on the fast-track through an arrangement with the New Jersey Economic Development Authority.
This unusual maneuver bypasses the normal way state government projects are funded under the New Jersey State Constitution: through the legislature.
The EDA is an independent state agency, in but not of the state treasury, that finances small and mid-sized businesses, such as Roebling Lofts in Trenton.
Recently available reports show that its annual appropriation for economic development programs is approximately $25 million. It also administers additional funds, such as more than $15 million of American Recovery and Reinvestment Act funds allocated to the state.
The Christie administration’s arrangement for the project is inventive. The EDA is going to secure the $376 million worth of bonds to fund the offices, rent the state properties from the state, and then re-rent the properties back to the state at the cost of the bonds.
The price tag for Christie’s pro-Trenton projects doubles a few weeks later when he announces a similar $300 million arrangement to renovate the now “deplorable” New Jersey State House.
But the arrangement gets noticed and questions are now being asked about the state bypassing the state legislature and the New Jersey State Building Authority, which is normally involved with the state government office construction.
And, oh, what about funding? After all, the state has been dealing with an ongoing economic nightmare: the unpaid pension contributions that earned the Christie administration a record number of credit rating downgrades.
It also bypasses public input and is later found “incompatible with the City’s Master Plan,” as the City of Trenton Planning board unanimously states after an EDA courtesy presentation of one of its pre-planned buildings.
Although Christie had said it was “a good day for Trenton” at the announcement, Trenton business owners and others invested in the community can recall other “good days” when the state demolished neighborhoods to build office buildings, parking lots, and a highway that cut the city off from the river.
Such actions changed the city forever — and not for the better.
With the aid of development experts and urban designers, Trenton community members review the plans and ask the state to reconsider the designs.
Members of the community form a group, Stakeholders Allied for the Core of Trenton (ACT). Aided by urban designers and development experts, they review the plans and ask the state the reconsider its plans for, in the words of a city planning board member, “Soviet”-style buildings going up in state parking lots. ACT members are lobbying instead for the new buildings to be more aesthetically pleasing, located closer the core of the city’s business district, and use public-private partnerships to create mixed-use buildings and residential areas to generate tax revenues and create a more vibrant city.
ACT slowly emerges as one of the most informed and connected grassroots groups to be assembled in the city in years. Its co-coordinators are Anne LaBate, president of Segal-LaBate Commercial Real Estate and longtime Trenton advocate, and Iana Dikidjieva, former Trenton Downtown Association acting director and manager for an extensive property mapping project conducted by Isles, the nonprofit community development group.
In addition to Trenton restaurant and business owners, members with political capital and Trenton ties join ACT: former Trenton mayor Douglas Palmer, former Mercer County executive Bob Prunetti, former U.S. senator and Trenton business owner Robert Torricelli, New Jersey assemblyman (and future Trenton mayor) Reed Gusciora, and then-Trenton City Council president Zachary Chester.
Meanwhile, as then-Mayor Eric Jackson’s administration and the business development nonprofit Greater Trenton passively accept the plans, the Trenton City Council voices its opposition.
Three general camps interested in the projects emerge. One is ACT, petitioning the state to rethink the project to conform to the city’s master plan, serve as an investment in the capital city, and use current development practices — rather than have the state handle the entire operation.
As ACT member and Trenton resident Jeffrey Laurenti — a former executive director of the New Jersey Senate, executive director of policy studies at the United Nations Association of the United States, and U.S. congressional candidate — states at one public session, “This proposal to place these new state office buildings at various points, with no concentration for redevelopment impact, is not only a missed opportunity to leverage the state’s largest expenditure of money for state office construction in a generation, but it is also at odds with every public policy objective that the Economic Development Authority is mandated to advance. This is a case of a state government imposing a plan for its own bureaucratic convenience without input from the citizenry of the affected city.”
Another camp consists of state administrators, legislators, and union representatives arguing that changing and delaying the project would cost taxpayers more and hurt opportunities for union employees (although a more Trenton-friendly project would basically require the same state labor).
As Hamilton assemblyman and president and assistant business manager at the International Brotherhood of Electric Workers Wayne DeAngelo dramatically pleads at one meeting, “This is an enormous amount of work for the men and women of the building trades, putting regional people, local people on local jobs. No one wants to come into the holiday on unemployment, and seeing these projects further delayed would be a detriment to their livelihood.”
And the third is the Christie administration, whose sudden and uncharacteristic interest in Trenton redevelopment draws scrutiny. Some capital city observers speculate it has to do with providing lame duck contracts for political allies.
The three sides clash continuously in 2017 with the project steadily gaining steam.
But then, after months of attending public meetings and advocating, ACT has a victory at a November, 2017, State House Commission meeting.
Here Gusciora convinces the commission to delay approving the advancement of the EDA project so the incoming administration of Governor Phil Murphy can review the plans and make the decision.
The victory is short-lived, and the empires strikes back quickly. As New Jersey Spotlight reports on December 8, 2017, “The construction of two new state government office buildings was given initial approval yesterday by an under-the-radar panel of lawmakers and executive-branch officials during a meeting that came about only after legislators from both parties were swapped in for colleagues, seemingly to make sure the proposal would be passed.”
On December 18, 2017, another state committee meeting approves the project, despite the lack of a required impact study from the Capital City Redevelopment Corporation.
Gusciora responds with the following statement:
“Today the Joint State Leasing and Space Utilization Committee met to rubber-stamp the Governor’s plan for the construction of two new office buildings in Trenton. We truly had the potential to reshape our capital city given the scale of this project. Successful urban revitalization projects are predicated on multi-use development. Single-use office buildings will only perpetuate Trenton’s ‘nine-to-five’ culture. This project will change Trenton’s streetscape for a generation and, after today, we know it won’t be for the better.
“Through some sketchy political machinations, Gov. Christie managed to, in his typically bullish and authoritarian way, undo that important work and ram this project through the approval process in the 11th hour. It’s really disappointing that the governor, who has ignored the capital city for his entire tenure, will be able to exercise his will and reshape the city for the foreseeable future. It’s politics at its absolute worst.”
Hoping to halt the project through litigation, ACT members file a lawsuit. It is unsuccessful, but with the state’s blessing, the EDA is able to secure the bonds to move the project forward.
When the Murphy administration comes into power, changes are made in EDA leadership, and in the transition the state building plan moves into the slow lane.
ACT members then lobby the project’s main client, the New Jersey State Treasury, and its new director, former New Jersey Assemblywoman Elizabeth Muoio, who had co-represented the region with Gusciora.
However, ACT members are soon disappointed to find that the project had been tacitly accepted by the new Democrat administration and is still on track.
The state’s argument is that the bonds are in place and cannot be rescinded.
But Gusciora also gets quietly busy after becoming Trenton mayor on July 1, 2018.
It is then, as demonstrated in a November, 2018, memorandum obtained by U.S. 1, that Gusciora engages the Trenton law firm McManimon, Scotland & Baumann to offer some opinions regarding action.
The firm boasting expertise in finance and public sector law responds that it is financially difficult to nullify the bonds but possible to relocate the projects to more desirable locations.
The reason? The bonds are connected to the state paying rent for the offices space, not the specific sites. Furthermore, the move could be made through only the consent of the state and the EDA.
Since the state owns the property for the new buildings, the report adds, successful relocation would require the city to “identify alternative properties, either owned by the city or which the city can acquire, and which the city can contribute to the state, without costs.”
Although a path of action has now been laid out for the state to revise the project to better server Trenton, nothing happens.
As Laurenti says during a recent telephone interview, the mayor shared his finding with the state treasurer and “got a ‘nice-try’ type of response” as the state project moved ahead.
It’s something Gusciora confirmed during a brief face-to-face discussion.
Laurenti, who sympathizes with a capital city mayor attempting to keep positive relations with state administrators, sums up the situation by saying “the train was moving” and, despite the mayor’s last ditch effort that showed a way through, the state didn’t act.
Laurenti, like other ACT members, then wonders why Governor-elect Murphy or his transition team have never publicly addressed what had become a very public project and if the new administration depended on EDA for guidance — pointing out the irony that the EDA is now under investigation by the Murphy administration for charges that range from cronyism and lax oversight to bureaucratic convenience.
Tax Dollars at Work
A quick glance into the recent history of the EDA is a peek into its problems.
During the Christie years, three Christie allies ran the EDA. Former Christie chief counsel Thomas P. Scrivo served as EDA board chairman. CEOs included Melissa Orsen, a former Christie aide, and Michelle Brown, a federal prosecutor who worked with Christie when he was U.S. Attorney for New Jersey and followed him to the statehouse where she served as his appointments counsel.
According to the Gannett-run North Jersey Media newspapers (which includes the Record), Brown “presided over the largest expansion of tax breaks in state history when she ran the agency from 2012 to 2015.”
Then the competitive bid for the law firm providing the legal framework and security arrangements for the bonds went to Christie’s longtime friend, advisor, and attorney general, Jeff Chiesa. His firm, Chiesa, Shahinian and Giantomasi, was formerly Wolff & Samson.
Samson is David Samson, the former New Jersey attorney general and Christie-appointed Port Authority chairman and confidant who led that agency during the Bridgegate scandal and was convicted in federal court for using his position to bribe United Airlines officials.
As the recent Murphy administration EDA investigation shows, one of the above average beneficiaries of EDA-funded projects is southern New Jersey power broker George Norcross, a longtime friend of state senate president Steve Sweeney.
Various reports show companies associated with Norcross and his family and associates benefiting from a bill that enabled the EDA to develop “growth zones.”
Portions of that legislation were written by Norcross’ brother, Philip, a lawyer and lobbyist. The bill was co-sponsored by another, Donald Norcross, a former New Jersey senator and current congressman.
Norcross is also aligned to Christie, who during his final public presentation as governor said to the alleged South Jersey Democratic boss, “We did it, George, and thank you for being my partner.” The reference is to rebuilding Camden through EDA support.
So is the office building project another example of the EDA being used to divert taxpayer funds to reward the politically connected?
While the community first heard about the project in 2016, a 2013 Taxation Building review was created by southern New Jersey-based architecture firm Lammey and Giorgio, contributors to Donald Norcross. In 2015 the EDA released a Princeton-based KSS Architects Feasibility Study on the project.
According to both on- and off-the-record comments by individuals close to the project, the fast-tracking was to help Republican interests before Democrats took control in 2018.
Others speculate the Republican-supported project may have also benefited the political interests of Steve Sweeney, a Democrat.
Sweeney, who also serves as vice president of the Ironworks International of North America, has had problems with his pro-union credentials — important for a Democratic politician.
One set of problems stems from his support of Christie’s 2011 changes to public sector union benefits. It was followed by escalating tensions with those unions.
The bitterness was so potent the New Jersey Education Association decided to punish Sweeney for his transgression and in 2017 funded his Republican opponent, Fran Grenier, making history for the most money spent in a state election.
More recently Iron Workers Local 46 in New York says Sweeney and the parent organization forced them to abandon a protest movement against Hudson Yards after the Ironworks International cut a deal with the developer that did not include other unions.
Laurenti says,“Trenton activists saw the Senate president’s unprecedented re-shuffling of the legislative members of the State House Commission to ram (the office buildings project) through in Christie’s final days as a sign of his apparent complicity.
“It begged the question how early had Senator Sweeney been informed, involved, and engaged in the building project, when the city itself was not. Did it just arise in the lame-duck session, as the governor tried to tie up the final loose ends of his ‘legacy’? Or was it much earlier?”
As ACT members point out, the seemingly disconnected Sweeney quietly arrived at the December, 2017, State House Commission meeting and huddled with a few commission members before the session that put the plan firmly on track.
John Wisniewski, a former Democratic New Jersey assemblyman who also filed an unsuccessful law suit to halt the Christie administration’s use of the EDA, shares some perspective during a recent telephone discussion.
The former co-chair of the New Jersey State Legislature’s Bridgegate investigations and a 2017 primary gubernatorial contender, Wisniewski says Sweeney’s appearance was just part of the legislative process.
Asked why Sweeney and other legislators did not speak out, Wisniewski says there is a disease in Trenton summed up by the phrase, “‘Why bother?’ People will say why fight, what difference does it make? There is an institutional mindset.”
And as for any motivation for the Senate president to be involved, Wisniewski says he is unable to say what Sweeney was thinking.
He is not alone. Sweeney declined to answer questions submitted to his office about his history with the project, his thoughts regarding ACT’s suggestions, and his views on using the EDA to fast-track the project and bypass the New Jersey Building Authority and the legislature. He was also asked how the project was important to him as a union leader.
Wisniewski, however, says Christie knew about the sizeable economic project and “was not doing right for the people of Trenton but doing right for his political agenda. The decision should have been for the people of Trenton” and to improve the city’s economic strength.
He is also disturbed by the administration’s use of the EDA to avoid a constitutional debt limit clause — something he says the state Supreme Court considered more politically than constitutionally when it ruled against his suit.
“If the state constitution can be violated when it is convenient, then it can be violated for any reason,” he says.
As for Murphy maintaining the status quo regarding the plan, Wisniewski says, “Very few governors come in who are so different than their predecessor.”
U.S. 1 questions regarding the project, ACT’s criticism, and Mayor Gusciora’s report were submitted to the governor’s office. They were then forwarded to Treasury, which did not respond.
Not silent is ACT’s LaBate, who shares her frustrations attempting to communicate with Sweeney and writes the following regarding the buildings:
“New Jersey’s Capital City faces huge economic and social disparities. If we hope to build an integrated, prosperous city, public expenditures must be targeted strategically so that we make the best use of limited funds to unlock private sector investment. That is what responsible, forward-looking elected officials would do.
“The 400,000-square-feet state office building project rising at the fringes of Trenton’s downtown represents public money, not invested, not targeted in any manner that could be considered strategic — but rather money simply spent.
“Governor Christie and senate president Sweeney fast-tracked this ‘big spend’ through a wily use of an obscure state commission in order to avoid a legislative vote.
“Their reasons had nothing to do with promoting the prospects of our capital city.
“Rather, there were North Jersey and South Jersey interests to be rewarded, as Christie and Sweeney played out their respective hands in a card game that no one else was invited to join.
‘Trenton, one of the poorest cities in our state, burdens its taxpayers with the highest effective real estate tax rate in the state among its largest municipalities. We are expected to pay for the ‘honor’ of hosting state government.
“This condition is now exacerbated by an enormous, $225 million investment to construct tax-exempt, single-use office buildings on prime property, taking it off the tax rolls for the foreseeable future.”
It is a sentiment echoed by a Trenton citizen at the City of Trenton Planning Board meeting where the EDA made a presentation.
Her statement is simple and to the heart of the matter: None of you live here, and you’re making decisions that will affect us for the rest of our lives.
The horror is that no one listened.