OK, what to do? We need to clean up City Hall--starting with setting standards of conduct. If you're under inditement, we say: "You're fired!"
Demand Vega resign.
In Hoboken the residents marched on City Hall to demand the Mayor resign. I was there, so I know it actually happened. Had I not been there, I never would have believed it possible to rouse and wake the residents.
If Hoboken can do it, surely Jersey City can!

Great take on the city council's decision last Wednesday to introduce an ordinance that would ultimately permit the city to lend $8 million to a hotel developer.

Businessman's Guide to Jersey City
(from the blog Hudson Democracy)
by Douglas Carlucci

Tarrunumn Murad, the C.E.O. of the real estate group to which Jersey City could lend $8 million to build a fancy hotel, knows how to do business in this town.

The City Council voted 6-2 last week to introduce an ordinance which would let the city borrow $8 million, secured by its federal Community Development Block Grant funds, and then re-loan the proceeds to a subsidiary of Murad's Tramz corporation, which was formed to build the hotel.

The subsidiary, under the name State of Liberty Harbor Noth Redevelopment Urban Renewal, LLC, wants to put up the hotel, along with some condominiums, at the foot of Marin Boulevard near the old canal basin. First, it has to pay to clean up the property, which is a contaminated Brownfield. Some of the $8 million is intended to ensure the company can qualify for federal funds to clean up the mess. The rest is to build the hotel, at some point.

TramzConrad Hilton Phase 1
Tramz Hotel Jersey City: Just $5,100 Down

If the company defaults, the city has to repay the loan out of its federal grants, which are intended for things such as infrastructure maintenance and antipoverty programs, things it needs much more than a hotel. Jersey City would have to line up with the rest of the company's creditors in bankruptcy court to reclaim its community development money should the company default.

It's a risky loan at this time. Mayor Healy wants to raise taxes about twenty-four percent. The city is weighed down by a $45 million structural deficit. The city would be stretched too thin in the best times, but the ongoing recession has made each problem so much worse. The next fiscal year is four months away, and the city hasn't passed a budget for the current year.

It's a bad time to bet on a real estate project with $8 million worth of federal grants, which could end up being the difference between insolvency and making it through another year.

The risks are balanced only with dubious rewards: the typical vague promises of jobs for Jersey City residents and the "D" word, economic development, which, we are to assume, could be achieved in no other way but subsidizing the construction of a luxury hotel.

Why would the city take the chance?

The Jersey City Independent reports that Murad donated at least $5,100 to Healy-controlled political organizations for last year's municipal elections.

In March 2009, he donated $1,500 to Healy's City Council slate, which included all six council members who voted to introduce the loan ordinance.

In May 2007, Murad donated $2,600 to Healy's mayoral campaign, for which the mayor raised $3 million to win about 16,000 votes.

In November 2007, Murad donated $1,000 to the Hudson County Democratic Organization, of which Healy remains the chairman.

Now it all makes a little more sense. Mayor Healy has a problem. He governs the city according to what his campaign contributors want, which, as the city's accounts dwindle, is frequently at odds with what his constituents need. Healy, along with Councilman Mariano Vega and his formerly secret tax abatements committee, have sold the city out for campaign cash again and again.

In fact, they were caught on tape trying to make just such an arrangement with another "developer", who turned out to be a secret F.B.I. witness. Now Vega is under indictment for taking bribes and lying to F.B.I. agents about it. Yet he still votes on projects like this, and won't be held accountable for his blatant conflicts of interest.

Two other men who ran on Healy's slate last year, Phil Kenny, who won the West Side council seat, and Guy Catrillo, who lost the Downtown one, also were caught taking bribes from the same secret witness.

Healy leads a pervasive culture of the corruption inside the Democratic organization.

Vega clearly has no shame. If Mayor Healy won't reconsider his policy of making major decisions based on his campaign ledger, he's just as bad, with or without an indictment.

I don't see why we should put taxpayer resources at risk to fund private development. If the economics make sense, they should be able to get private financing. I'd rather use public resources to finance things the private sector will not build on its own--like parks and schools.

Peter will not close the Sand Bar until he is ready to build on that property - you should have several more years to enjoy it!

If it closes the Sandbar for good, I'm all for it !

The hotel will NOT be on the Morris Canal - Peter Mocco owns that property. It is directly across from the Liberty Harbor Marina, south of Gull's Cove. There will be an area of parkland on the Morris Canal at the southern end of Marin Boulevard.

Jersey City had the 108 loan for Newport. The same story, the jobs will go to local residents. Then stories came the construction workers were as far away as Texas. I wish I saved those articles. Local people did not receive construction jobs.

Jersey City Council withdraws controversial hotel loan ordinance

By Melissa Hayes/The Jersey Journal
December 16, 2009, 7:32PM

The Jersey City Council withdrew an ordinance tonight that would have guaranteed an $8 million federal loan for the developer of a waterfront hotel.

The move came after a lengthy debate during Monday?s council caucus meeting.

Tarrunumn Murad, CEO and founder of Tramz Hotels Group, is proposing a 300-room Hilton Hotel along Marin Boulevard in the Liberty Harbor North Redevelopment Area.

Murad is seeking the loan through a program that would put the city on the hook if she were unable to pay it back.
The funds would be issued through the federal Department of Housing and Urban Development?s Section 108 Loan Guarantee Program, which allows municipalities to guarantee loans for private developers.

If a developer fails to repay the loans, the guaranteeing municipality can lose its federal Community Development Block Grant funds, which are distributed through HUD.
Ward D Councilman William Gaughan said he was concerned about the developer?s ability to repay the loan.
Murad offered to put $1 million of the loan in an escrow account, which the city could use to pay the loan if she defaults, however she said she has no intention of not repaying the loan.

Ward E Councilman Steve Fulop suggested the company get a letter of credit to back the loan.

Deputy Mayor rosemary McFadden said banks are requiring more collateral for letters of credit because of financial climate but she would ask Tramz if they would pursue it.

Murad said Monday she wants the loan so she can move forward to remediate the site and begin construction. If things move forward, the goal is to complete the $118 million project by April 2014.

The council put off introducing the ordinance tonight until they hear whether Tramz is willing to get a letter of credit.

Council debates federal loan to hotel developer

Hudson Reporter

JERSEY CITY -- The City Council at its council caucus discussed a $8 million federal loan to the city that would go to the developer of a new Hilton Hotel located in downtown Jersey City.

The Section 108 loan, which is issued by the U.S. Department of Housing and Urban Development (HUD), would finance the construction of the 300-room hotel by Warren, N.J.-based Tramz Hotel. Along with the hotel construction, the $118 million project also includes 470 residential units, an automated garage with 738 spaces and 12,294 square feet of retail.

A Section 108 loan is a financing tool for economic development projects that benefit low-and-middle income people. The hotel project is to employ low-and-middle income residents on both construction and in the operation of the hotel.

But the loan is not without risk to the city, as it would have to guarantee the loan if the developer fails to do so. That guarantee would happen by the city dipping into its CDBG (Community Development Block Grant) funds that it receives from the federal government and then allots to various social service programs across the city. Tramz Hotel is putting $1 million in an reserve account when the loan is ready to be paid off.

The council's concern is that the risk is a reality, especially in tough economic times.

City Councilman Steven Fulop, who represents the area where the hotel will be built, said based on conversations with hotel operators in downtown Jersey City, hotel occupancy rates have gone down and creates a tough market for construction of any new hotels.

But Tarrunumn Murad, CEO of Tramz Hotels, said while this is a time that hotels have reached their "lowest point," they are beginning to show signs of picking up occupancy and that Jersey City has an upside as a "hub of all new hotels" as opposed to New York City.

The ordinance authorizing the loan will have its first reading at Wednesday's City Council meeting. - RK