Asbury Council: Demand renegotiation of iStar infrastructure giveaway

The following column by triCityNews Publisher Dan Jacobson appeared in the Feb. 6 issue of the paper. We rarely publish the paper’s content on line. We’re not fools. That’s how a newspaper destroys itself. But we will make an occasional exception here on our Asbury Overheard blog when an important public interest is at stake . [Our asburyparksun.com site remains committed to objective, unbiased journalism.] Here’s Jacobson’s triCity column on what he calls the “infrastructure giveaway” to waterfront redeveloper iStar Financial: 

This is why we started the triCity-affilliated asburyparksun.com website almost two years ago.

It’s to objectively and fairly report the news of Asbury and surrounding areas so all of us — this publisher included — can know what the hell is going on. And make our own decisions about it.

After all, no one else is going to do that. Certainly not the Asbury Park Press.

And last week the Sun’s Jill Bartlett reported a doozy — downtown developer Carter Sackman was never billed for his in-lieu tax payments for the past five years on either his Steinbachs building or his newer 550 Building across the street.

That’s an estimated $700,000 that was never collected for the city. Doesn’t sound like Sackman’s fault either. He deposited the monies into an escrow account with a bank. All the city had to do was send the bills as the payments came due, and the money would be withdrawn. Sackman said he was unaware of any of this until new Councilman John Moor started asking questions about it. Sackman says he wants the payments made. Obviously, he needs a bill!

What an embarrassment. Yet another reason to have a complete lack of confidence in what went on under the last city council, which left office last year.

Which brings us to the big enchilada that now must be questioned — the rushed agreement that pays for the infrastructure for waterfront redeveloper iStar to build more condos on the waterfront. Since that agreement was inked last year, iStar now wants to bring in national homebuilder K. Hovnanian to build “luxury townhouses” on a relatively small lot for that company in the waterfront zone.

It’s time for Councilman Moor and the other two new council members — Amy Quinn and Myra Campbell — to demand that this infrastructure agreement be renegotiated. For it literally cuts the city schools out of new tax revenues from iStar’s future development on the waterfront…for 30 years! That’s what’s being used to pay for the infrastructure that they need for their condos. [I'm not even going to get into how the city's taxpayers were shortchanged in the deal.]

Yup, the last city council screwed our city’s schools and kids, so iStar can now move forward to bring in the Hovnanians of the world — a completely inappropriate fit for Asbury Park.

This is where I puke.

This Publisher and a ton of other people in the city — most likely a majority as shown by the last election results — question the competency of the last council. And with good reason. The failure to bill the largest downtown developer $700,000 for his in-lieu tax payments for five years only reinforces that conviction.

There’s a simple reason that you can’t trust that waterfront infrastructure agreement — it was rushed through before a new council took office. And anytime something is rushed like that, it can’t be trusted.

In fact, the last city council put on hold a massive project to update the whole waterfront redevelopment plan to conform with present-day realities — all so this infrastructure agreement could be pushed through. Shouldn’t the waterfront plan have been updated first? Of course not. Then iStar would have to face a Council that wasn’t comprised of dumb sheep, and they likely wouldn’t have gotten this infrastructure deal. The waterfront plan has still not been updated.

I’m not saying that last council were stupid people outside of their work as elected official. But in their elected capacity they were dumb as stones — and, even worse, they did not know how to look to anyone else to get advice or information. It was absurd.

And they bound the city for 30 years to a massive agreement to pay for iStar’s infrastructure — all on the backs of our city’s kids. In addition, the city’s taxpayers themselves should have gotten much more than was negotiated. I don’t see where iStar had to pay a penny for this.

This infrastructure agreement — actually, it should be called an infrastructure giveaway — should be stopped before anything else is built and it’s too late. The city council should start getting vocal about this. And they should start challenging iStar at every turn — making it clear that iStar will be seen as an adversary on all matters until this infrastructure agreement is renegotiated, and balance is restored to the city-iStar relationship in general.

Because an adversary is what iStar really is — they got their way too often and they are not the city’s partner. Note I didn’t say enemy. I said an adversary, like you get in respectful, but determined, legal negotiations or disputes.

Meanwhile, the last council sure as hell fought with boardwalk redeveloper Madison Marquette. You can debate Madison’s role in Asbury all you want, but what you can’t debate is this: They did deliver benefits — I argue huge benefits — to Asbury Park. I don’t see anything like that with iStar. And with Hovnanian and this infrastructure agreement I see a coming disaster.

Madison Marquette rebuilt the pavilions and the boardwalk zone into a successful entertainment destination — all during the worst financial crisis and recession since the Great Depression. That’s what saved Asbury’s ass, and why parking revenue and beach fee revenue surged. It’s why people still wanted to come to Asbury Park.

But the head of Madison Marquette, Gary Mottola, can be somewhat difficult for some to deal with. Hey, the guy never bothered me. I think he’s a hero. Mottola’s insane drive is what made it happen here, and no one else but someone as crazy as him would have attempted it. Mottola made it work. And the man’s vision of Asbury as a unique and creative place was always perfect pitch.

So while quietly rushing through iStar’s infrastructure giveaway, the last city council fought with Mottola, in particular asserting control of 600 parking spaces that Madison Marquette was using on private land for which they were paying full taxes. After the city asserted control of the spaces, Mottola drew back on his investment here, questioning the commitment of that last council. He was absolutely right, particularly given his company’s successful track record in bringing back the boardwalk, during the most difficult of economic times.

Contrast that with iStar. They’re here because, according to prior reports on asburyparksun.com, they made a bad $100 million bet on the waterfront during the housing bubble. That’s what they lent to the old ownership of Asbury Partners. And when they couldn’t pay up, iStar took over Asbury Partners. In other words, iStar is not a developer. They’re like a bank here trying to recover what they can on a bad loan.

So what has iStar done? Nothing, compared to Madison Marquette. Sure, IStar built the VIVE townhouse complex on Kingsley, which is hardly a game changer in Asbury Park. And now they want to bring in Hovnanian, in an obvious move to attract more national homebuilders to the waterfront.

But this is not a free market situation. Istar cannot do whatever the hell it wants. Istar’s predecessors in Asbury Partners got their waterfront properties through the use of governmental powers of eminent domain for redevelopment, or the threat of that use. And they still get the benefit of other special laws as a redeveloper. So this is supposed to be a public-private partnership — one that’s been way too one-sided in iStar’s favor. And mark my words: The move to bring in national homebuilders will not end up well, especially in terms of the economic dislocation it will cause in Asbury Park.

With the Hovnanians of the housing industry on the waterfront, you’ll get every jerk-off from here to North Jersey buying properties on speculation throughout Asbury Park, driving up rents and prices and displacing residents. That will cause political and economic havoc as speculators arrive in numbers not seen since the last run at redevelopment in the late 1980s. And we all know how that turned out.

Unlike the outspoken Gary Mottola of Madison Marquette, iStar, under it’s low-key vice president of land Brian Cheripka, kept its head down and cultivated a friendly relationship with the last administration, in contrast to the tumultuous one the administration had with Madison Marquette.

That’s why I suspect iStar got all they wanted from the sheep on the last city council. While Madison Marquette’s Gary Mottola was the bad guy — I guess for investing in the boardwalk, bringing it back and saving the city from the financial crisis and recession — Brian Cheripka quietly and methodically did his work, cultivating the last city council and city manager. It sure worked. Gary Mottola was the best thing that ever happened to Brian Cheripka. The last council’s absurd war with Mottola was a total distraction from what they should have been doing: focusing on iStar so the city didn’t get screwed. They failed.

Let me be clear about iStar’s Brian Cheripka: This guy is ethical. He will never lie or deceive. If there’s something to his company’s disadvantage that he doesn’t want to disclose, I would expect him to simply say he can’t state it, rather than mislead you.

But Brian is making a massive mistake by bringing Hovnanian here — for the city, for his company and even for Hovnanian, who will rue the day they made this decision. Hovnanian has no idea what Asbury Park can be like.

Cheripka is bringing in the wrong developer to the wrong city at the wrong time. And he should stop now, and switch course. So instead of using Hovnanian to trigger more Hovnanians coming here [meaning other national homebuilders], why not use an independent and innovative developer — like you find all over the world — to trigger more independent innovative developers here?

In the end, that will bring plenty of value to what’s built, perhaps even more than you’ll get from Hovnanian, Lennar, Toll Brothers and KB Homes. And it will bring less tension and tumult than the national homebuilders.

But that rushed infrastructure agreement, an incompetent and asleep-at-the wheel former city council, Hovnanian “luxury townhouse” and the last council’s distracting and absurd battle with Madison Marquette while iStar got everything it wanted — it’s all way too much.

The new council, and particularly new Councilman John Moor, should take a step back on behalf of the city in its relationship with iStar. The whole thing has to be recalibrated.

First step is to demand a renegotiation of that infrastructure agreement. The Council should be vocal in that regard. It’s in Cheripka’s interest to avoid controversy. But it’s now in our city’s interest to raise the tough issues with iStar — vocally, publicly and continually. The new council should do their job. Unlike the last sheep who sat on the council dais.

The new council should make it clear that iStar was allowed to go too far, and that balance must be brought back to this relationship, starting with that rushed infrastructure agreement that screws our kids and our taxpayers.

In other words, the partnership with iStar and the city should either be a fair one, or things should stop until balance is restored. Right now it’s way out of balance. And that’s at total variance with the public interest. Our elected officials should now do their duty.

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