Land dispute puts budget in jeopardy

Saturday, March 31, 2007
By KEN THOBOURNE
JOURNAL STAFF WRITER

Jersey City's budget is in limbo due to a land sale state officials say the city has no right to make.

The issue arose during a routine state review of Jersey City's municipal budget for the fiscal year that ends June 30. If the matter isn't resolved, the city will be faced with a $9 million hole in its budget, city officials said.

The issue involves 6.2 acres of vacant land Downtown in the Liberty Harbor Redevelopment zone along Marin Boulevard. The city has signed an agreement to sell it to three developers who plan to build 600 residential units and a hotel.

The negotiated price is $26.3 million, with the city kicking back $7 million for environmental remediation, officials said.

City officials assumed $9 million in income from the sale for this year's budget, which is being reviewed by the state.

But state officials are saying the state has an interest in the land, because tidal waters once flowed in the area. State and city attorneys are now researching laws and agreements that date back nearly 100 years to resolve the problem.

All parties seem to agree that a 1918 statute granted Jersey City the right to lease the property to anyone it wishes, which the city has done over the years.

But the buyers - Applied Development of Hoboken, SK Properties of Bridgewater, and Tramz Hotel Group of Warren - want the land with a clear title, city officials said.

City officials said they are negotiating a settlement with the state that would allow a project to move forward which they say will create 600 permanent jobs.

"We are negotiating with the state and are hopeful to reach a reasonable compromise whereby they will not seek to extract too much money that would otherwise be dedicated to property tax relief," said Corporation Counsel Bill Matsikoudis, who refused to discuss details of the negotiations.

Lee Moore, a spokesman for the state Attorney General's Office, was similarly tight-lipped.

"We are working with Jersey City to come to a resolution of this issue," he said.

City spokesman Stan H. Eason refused to speculate about consequences on the city's budget - or on property taxes - if the sale were not to go through.

"We anticipate a decision that will allow us to move forward with the development," he said.

Tarrunumn Murad, chief executive officer of Tramz, remained hopeful her company would soon start building a 300-room Hilton Hotel.

"I'm sure they will be able to resolve this issue," Murad said. "This is going to create jobs, and a lot of economic activity in the city. The hotel will generate 300 permanent jobs and they are also mostly non-skilled jobs."