How Pressure Mounted for Development in Hoboken
By PATRICK McGEEHAN and CHARLES V. BAGLI
The New York Times
January 29, 2014
HOBOKEN, N.J. — Last May 8, a severe rainstorm left the streets of this city flooded once again, causing the mayor, Dawn Zimmer, to recall the inundation from Hurricane Sandy.
So she dashed off a letter to Gov. Chris Christie, imploring him to help with Hoboken’s “ongoing flooding emergency,” and attached photos of cars in water up to their hoods. She was due to meet the next day with officials of the New Jersey Department of Environmental Protection, when she hoped to talk about protecting Hoboken from the next catastrophic deluge to come.
But according to newly obtained emails sent among the participants, the first topic of discussion on the agenda was “review of concepts for flood control measures at Rockefeller property,” a reference to a billion-dollar office complex proposed at the north end of town. The developer, the Rockefeller Group, which had long been trying to gain approval from local officials, sent two executives, two lobbyists and an engineer to the meeting.
Mayor Zimmer, through a spokesman, said on Wednesday that she went to the meeting but refused to discuss the project, feeling it was premature to do so.
Though a developer tried for years to gain approval for a billion-dollar office complex, the area near 14th Street and Park Avenue remains dormant.
(Robert Stolarik for The New York Times)
The next day, the mayor has said, she received a call telling her that Lt. Gov. Kim Guadagno would visit Hoboken the following Monday. Ms. Zimmer, a Democrat, has alleged that during that visit, while in the parking lot of a Shop-Rite supermarket, Ms. Guadagno, like the governor a Republican, told her that the Rockefeller project was important to Mr. Christie and that the mayor needed to “move forward” with it if she wanted Hoboken to receive the flood protection money being distributed in the wake of the hurricane.
The Christie administration has denied ever linking the Rockefeller project to hurricane relief, an accusation that is now under federal investigation.
But whatever the outcome of the inquiries, the emails and interviews make clear that the development-wary mayor was coming under increasing and repeated pressure from politically connected lawyers working for Rockefeller Group and from the Christie administration.
The company had laid out about $100 million to buy up property in a forsaken section of town littered with bus lots and long-dormant factories, property that was zoned for low-slung industrial buildings but blessed with a stunning view of Manhattan. Though the plans have never been made public, in discussions with local officials they described a project that would dwarf anything that Hoboken had ever seen.
Following a well-worn playbook, they hired lawyers and lobbyists with connections to the leadership of both parties. State officials, beginning with the administration of Gov. Jon S. Corzine, a Democrat, have come through for the company with money and support. Just last June, the state’s mass transit agency reached a nonbinding agreement with the company for the construction of a light rail station near its property.
Rockefeller Group had every reason to expect that local officials would come through, too. For years, Hoboken was known as development-friendly, a financially stressed city happy to move beyond the old image of a dockworkers’ ghetto immortalized by Elia Kazan in “On the Waterfront.”
But Hoboken took a sharp turn when it elected Ms. Zimmer mayor in 2009. She had entered local politics primarily because she thought Hoboken needed more parks. She joined the City Council during the second term of David Roberts, who as mayor welcomed development and encouraged the construction of the 25-story W Hotel that is still Hoboken’s tallest building.
After granting several interviews last week, Ms. Zimmer stopped speaking publicly about the issue, saying federal investigators had asked her not to. On Wednesday, a spokesman for Mr. Christie provided the dates of five meetings Ms. Zimmer had with state officials over the past year in which they discussed how the state could help Hoboken recover from the hurricane. The spokesman, Colin Reed, also noted that the mayor had asked Rockefeller engineers to come up with ideas to protect the city from major storms, and in her January 2013 State of the City speech, she thanked them for doing so.
The Christie administration also has questioned the timing of her accusations, which came eight months after the Guadagno meeting, and just days after evidence surfaced that the governor’s aides had created a huge traffic jam in Fort Lee to punish its mayor. That episode, too, is under federal investigation.
City’s North End
A wave of residential development and the long decline of manufacturing had already swept away much of Hoboken’s industrial past, including a shipyard and the factories that produced Stahl Soap, Lipton Tea, Maxwell House coffee and Tootsie Rolls.
Rockefeller Group, a national developer, began prowling Hoboken for construction sites in 2007. (The company built Rockefeller Center, but has not had a relationship with the Rockefeller family since the late 1980s.)
At the northern end of Hoboken, not far from the mouth of the always congested Lincoln Tunnel, Leslie E. Smith Jr., Rockefeller Group’s executive vice president overseeing development in the region, envisioned a vast, $1.1 billion complex that included a 40-story office tower, 300 condominiums and parking for 1,400 cars. Another developer, Larry Bijou, had spent two years and upward of $70 million buying land in the north end, for a residential and retail development of 14-story buildings.
By late 2007, with the economy starting to flag, Mr. Bijou agreed to sell most of the property — roughly 4.9 acres on three adjoining blocks — to Rockefeller Group, for about $100 million.
Mr. Roberts, the mayor, did not dismiss Rockefeller Group’s concept out of hand. There was, after all, the promise of 5,000 jobs and millions of dollars in state and local taxes. But he had questions about putting a large office complex on the north side of Hoboken, instead of closer to the city’s transit hub at the south end.
Mr. Roberts said in a recent interview that he needed “more convincing that it could work, and more discussion about mass transit.”
The next mayor, Peter J. Cammarano III, seemed enthusiastic about the project, but he resigned after 31 days in office, after he was caught accepting a $25,000 bribe from an F.B.I. cooperating witness who was posing as a developer.
The Rockefeller investment was a risky proposition from the start. There were no indications of what zoning changes the Council would allow in Hoboken, where a 14-story building is considered a high-rise, and many residents wanted to retain the relatively low-scale character of the city.
According to people who know him, Mr. Smith presumed that the company, with its resources and connections, could overcome any obstacles and get the project approved within two years.
In a statement on Wednesday, Mr. Smith said: “The north end of the city presented an excellent opportunity for commercial development and infrastructure improvements that would benefit all of Hoboken. We feel our project will make a positive contribution to employment opportunities, new amenities and future tax revenues for the city.”
In 2007, Rockefeller Group hired Wolff & Samson, a law firm with deep ties to New Jersey’s Republican leaders, to handle environmental issues. The company hired DeCotiis, FitzPatrick & Cole, a firm with Democratic connections, to handle land use issues, and the Hoboken Strategy Group, run by a former vice chairman of the Hudson County Democratic organization, to lobby local officials.
Ms. Zimmer became mayor in 2009, promising more transparency in dealing with developers and better planning for the city’s future.
“It was a political sea change in Hoboken,” said Thomas W. Newman, a cabinetmaker and former councilman. “Part of the machine-style politics of the past was making deals with the developers.”
Ms. Zimmer kept the developer and their lobbyists at arms’ length, saying she did not want to deal with a single project before she had conducted a planning study for the entire north end. But there was never any money in the city budget for the study.
If the Rockefeller Group could not gain much traction with local officials, they were doing better with the Corzine administration. In 2009, the state’s Economic Development Authority approved reimbursing Rockefeller Group up to $750,000 for the removal of contaminated soil and underground storage tanks and monitoring groundwater contamination.
Efforts on the state level accelerated after the election of Mr. Christie as governor in late 2009. Mr. Christie, like most governors, has been eager for new developments and uses them to lure companies to New Jersey.
He also is close to David Samson, a Wolff & Samson founder whom the governor would name as chairman of the Port Authority of New York and New Jersey in October 2010, a connection that Ms. Zimmer and her supporters have highlighted. The firm said in a statement that its work for Rockefeller Group was “appropriate in all respects.”
The company suggested that the mayor seek money for a planning study from the Port Authority, which sets aside some of its revenue from tolls and airport fees for local economic development projects. Bill Baroni, a former state senator and Christie appointee at the Port Authority, authorized up to $75,000 for the study. Mr. Baroni, who emails indicated was involved in the Fort Lee lane closings, has resigned from the Port Authority.
Slow Progress
The study dragged on for two years, delayed partly because of the hurricane. Four years after buying the Hoboken parcels, Rockefeller Group still had no certainty that it could build a large-scale project, so it asked Wolff & Samson to expand its work with the Christie administration in early 2012, two executives involved with the project say.
When the study, conducted by a planning firm based in Trenton, was finally completed in early 2013, it concluded that out of 19 north end blocks, only the three Rockefeller Group blocks qualified for redevelopment. That recommendation, if ratified by the city, would have given Rockefeller tax breaks for up to 30 years.
The group believed that the slow gears of City Hall were finally moving. It demolished buildings in danger of collapse, including the old Tootsie Roll factory, later used by Macy’s to store its Thanksgiving Day parade floats. The company also thought the mayor was warming to it, especially after her State of the City speech.
A few months later, the company struck a memorandum of understanding with New Jersey Transit to build a light rail stop near their property. Transportation planners have long said a station would someday be needed there, but for Rockefeller Group, which would pay part of the costs, it made the project more attractive to tenants. A spokesman for the mayor said that Ms. Zimmer was not apprised of the agreement. A transit agency spokesman declined to discuss it.
By the mayor’s accounting, the pressure really began last spring. In an April email, Hoboken’s planning lawyer wrote that Mr. Samson and Lori Grifa, a lobbyist from his firm and a former member of Mr. Christie’s cabinet, wanted to meet with him. The planning lawyer wrote that he was “getting the full court press on this.”
Later that month, Hoboken officials discovered that Ms. Grifa was going to be in attendance at the May 9 meeting in Trenton about flooding. “If this is a meeting between city and state, please explain what role Lori Grifa has in this,” a mayoral aide, Stephen Marks, wrote in an email to one of Ms. Grifa’s colleagues at Wolff & Samson.
“Wolff & Samson P.C. and Lori Grifa categorically deny Mayor Zimmer’s allegations relating to this firm’s role in the Rockefeller Group’s redevelopment project,” the firm said in a statement.
The day before that meeting, May 8, Ms. Zimmer wrote her letter to Mr. Christie: “I have tried to assure Hoboken residents that Hoboken would be treated fairly because you have always treated Hoboken fairly in the past.”
That was also the day that the planning board met to vote on whether to accept the redevelopment study. As it turned out, Rockefeller might have inadvertently hurt its own bottom line. The planner who did the study, Michael Sullivan, told the board that after the demolitions, two of the three Rockefeller blocks would no longer qualify as redevelopment property under New Jersey guidelines. With that, the planning board voted to designate the entire north end a “rehabilitation” area, allowing for much smaller tax breaks.
Rockefeller Group said the decision made no difference; the zoning change it needed was still possible.
Accusations and Denials
The conversation between Ms. Zimmer and Ms. Guadagno occurred the following Monday. She has said Ms. Zimmer’s version of their talk is “not only false, but is illogical.”
In the fall, the governor’s office called Ms. Zimmer’s office to set up a meeting with two state officials: Marc Ferzan, who oversees New Jersey’s hurricane recovery and rebuilding efforts, and Michele Brown, who oversees economic development. To the mayor’s office, the meeting, which was postponed, was another example of the Christie administration’s tying hurricane aid to the Rockefeller project.
Mr. Reed, the governor’s spokesman, said that was a mischaracterization. “It’s common practice for members of the Christie administration to jointly meet with officials from Sandy-impacted communities across New Jersey,” he said, noting that Ms. Brown’s agency also has a major role in distributing hurricane relief money.
Ms. Zimmer has also alleged that, in a separate meeting in December, Mr. Ferzan linked Hoboken’s prospects for receiving aid to her appetite for development. A spokesman for the governor said that Mr. Ferzan denied drawing any such connection.
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Privately, representatives of Rockefeller Group say they were taken aback by the mayor’s accusations, especially after their cooperation with the city on flood planning. And just a few days before she first discussed her meeting with Ms. Guadagno, on Jan. 18 on MSNBC, Ms. Zimmer met with company representatives in her office. They presented their latest plans, scaled back to 1.5 million square feet of office space, down from 1.8 million, with a possible future apartment building and no buildings taller than the W Hotel.
Last week, the mayor invited the public to view plans for protecting Hoboken from floods should it get the necessary funding. City officials said it was merely a set of ideas, not concrete plans.
But the Rockefeller Group representatives could not help thinking that the proposal was sending a message. In the drawings, one of the company’s three blocks had become a retention pond.
http://www.nytimes.com/2014/01/30/nyregion/powerful-allies-pushed-a-project-in-new-jersey.html
