The land deal fell apart late yesterday, just hours before the City Council was hoping to pass the city’s 2011 budget, immediately throwing the spending plan — which had included the $15 million in projected revenue from this sale — into question. But the administration quickly followed the news of the deal’s demise with a promise that the city would move a budget forward “with no tax increase.”

“We have been working on a Plan B for some time in the event that this deal was not finalized for this year’s budget, and have identified additional revenue sources and areas where cuts can be made,” Kelly said in a statement released yesterday afternoon. “We have been able to realize additional revenues that were not readily apparent earlier in the year and conservative revenue estimates have proved just that, conservative. Items such as PILOT [Payments in Lieu of Taxes, from abatements] revenues, receipts from delinquent taxes and hotel tax revenues have been realized above initial projections.”

But residents at Wednesday night’s council meeting seemed unconvinced, with a handful of public speakers at the meeting hammering Kelly about the budget question.

The often-unperturbed Kelly, who said he receives daily emails from “20 or 30 people” about the budget, showed more irritation than usual at the constant questioning.

“It’s disingenuous to say we don’t have a budget or a spending plan. We have a spending plan that we haven’t veered from,” the business administrator said. He called the budget “a living document,” noting how things can change through the course of a year.

“Yes, this one item of $15 million did not come to fruition, but it’s not like we were resting on our laurels. We were looking at additional spending cuts and revenue,” he continued. “The budget process is 12-month-a-year process.”

He said that the council will meet with the administration on Tuesday to address in detail how the city will make up for this shortfall.

At least one council member — Ward E councilman Steven Fulop — remained as skeptical as the residents, dismissing the notion of a “spending plan.”

“I spoke with the state today,” said Fulop. “They’re concerned about the budget.”

The state, which has to sign off on Jersey City’s spending plan, warned the administration back in July that the city could face state penalties, a bond downgrade, or even the loss of control over the setting the property tax rate if it failed to adopt its budget by August 26. Kelly responded with a letter promising that the city would adopt a budget by September 14; that promise is now broken as the budget must once again change before being approved.

Fulop hammered home a point he’s made for several years about faults in the city’s budgeting process, which usually involves the spending plan being passed well into the year it covers, with the majority of its funds already spent through emergency appropriations. As of the last council meeting, 86.2 percent of the then-$496.6 million 2011 budget — $428 million — had already been allocated.

The councilman and mayoral hopeful also pressed Kelly on where the $15 million was coming from.

“Now miraculously we find $15 million, when we were fighting about the [free health] clinic and about our library cuts and layoffs?” Fulop wondered, saying he was surprised how “easy” it was to find the money all of a sudden.

“It hasn’t been easy; just ask the [hundreds of] people laid off,” Kelly replied. “We did not miraculously find money; we were conservative with our revenue projections.”

What exactly the administration’s “Plan B” is remains unclear, since all of the increased revenue items touted in yesterday’s announcement were also touted when the previous budget amendment was unveiled — and that plan still included the $15 million land sale deal.

It also remains unclear how the administration will keep its promise to not raise property taxes. The most recent budget amendment, which included the land sale, called for $215,107,176 to be raised by taxation; that was already $30 million higher than the amount raised by taxation in 2010′s budget, $185,058,594. However, city spokesperson Jennifer Morrill told JCI earlier this month that property taxes “will be slightly lower in calendar year 2011 versus 2010″ despite that change, a message reiterated yesterday by the administration’s promise of “no tax increase.”

A special meeting of the City Council has been scheduled for Tuesday, September 20 to introduce the revised budget amendments, and a public hearing will be held on Tuesday, September 27, prior to the regularly scheduled City Council meeting. The council will then be able to vote on adoption of the budget at that same meeting.

As we reported earlier today, the land sale was apparently contingent on the developer being granted a long-term tax abatement for the market-rate housing units on the site. But the JCRA says that wasn’t what derailed the deal. Instead, Tessler’s concerns for “market conditions” and the “uncertainty for construction financing” were the primary cause for tabling the project, according to a release sent out by the JCRA.

“The agency worked diligently to bring this matter to a swift conclusion so as not to delay the city from making decisions regarding its budget,” JCRA executive director Robert Antonicello says in a statement. “The agency has been directed by the mayor’s office to revisit the site for alternative solutions.”

City officials have put the $15 million projected land sale into the proposed 2011 budget; no word as of yet how this will change that document. We’ll keep you posted.

Rendering of the once-proposed development courtesy of the JCRA

The property in question has been the subject of debate and controversy since April, when Ward E councilman Steven Fulop began to question whether the city could actually receive $15 million for it, as it had estimated in its 2011 budget. A few months later, a state official said the city was “highly unlikely” to fetch the full price.

But now it appears that it may, with the Jersey City Redevelopment Agency (JCRA) having lined up Tessler Developments as the designated developer for a massive complex that would include not only the region’s first proton therapy center, but also commercial space and about 1,000 market-rate apartments, some earmarked for those undergoing treatment.

According to the Wall Street Journal, the procedure is somewhat controversial in medical circles:

The treatment involves using a proton beam to precisely deposit a cancer-treatment dose near a tumor or affected area with less scattered radiation to the rest of the body, said Dr. Glen Gejerman, co-division chief of urologic oncology at Hackensack University Medical Center. It has so far been studied on brain tumors and on lung, pediatric and prostate cancers.

The controversial therapy is supported by some doctors who say it targets tumors more effectively than conventional radiation and is safer on surrounding tissue and organs.

Others have been critical, saying the relatively new therapy hasn’t been subjected to enough peer-reviewed research.

The City Council will vote next week on a resolution transferring the land to the JCRA, after which plans and engineering drawings would be submitted to the city’s Planning Division for approval, a process city spokeswoman Jennifer Morrill says will take between 9 and 12 months. She said the city expects construction to start by the end of 2012, or early 2013 at the latest.

The administration is still hoping to include the $15 million in this year’s not-yet-passed budget, but Morrill says they are still “working with the state” on that.

Fulop, who has criticized the land-sale process, says that he and his colleagues haven’t yet seen any plans for the site.

In addition to City Council and Planning approval, the project still also must be licensed by the New Jersey Department of Health and Senior Services as an ambulatory care center. No application has been submitted, the agency tells the Wall Street Journal.

But Yitzchak Tessler, Tessler’s owner, tells the paper he’s requesting licensing. To help fund construction, he says he has lined up $250 million in private investments, as well as signed contracts for $90 million worth of equipment and software.

Rendering of the proposed development courtesy of the JCRA

Here’s a list of the buyers and the properties, which were sold at a public auction on Wednesday, June 8:

• The biggest transaction was Mecca Realty Properties’ purchase of 717 Grand Street, which sits across from new development near the corner of Grand and Communipaw, for $72,000.
• Another property just down the block, at 652 Grand Street, was sold to B.J. Power for $52,000.
• Akram Qaiser picked up a handful of properties — three on Dwight Street and one elsewhere — for $60,000. Qaiser paid $15,000 each for 179.5, 181 and 183 Dwight Street, as well as 10 Bidwell Avenue.
• The LLC known as Cambridge Hilltop purchased 29 Astor Place for $21,000.
• Family Collective Day Care bought 465 Martin Luther King Drive for $5,000.

A strong showing by members of the Harsimus Cove Association, who voiced frustration at the lack of dialogue with their organization and argued that the redevelopment plan was an abuse of the city’s power, “opening the door” to future abuses, was not enough to convince the council that the redevelopment plan would be detrimental to the neighborhood.

Dan Levin, a former president of the Harsimus Cove Association and good-government activist, said he was not convinced the city should pursue redevelopment.

“The area the redevelopment is targeting is exciting, it’s a vibrant community, [and] it remains a great neighborhood because it’s not blighted and not in need of redevelopment,” he said Wednesday night.

“This eliminates [the city’s] ability to sell to the highest bidder. Our concern is about value,” he said. “This is not what the law was created to do. This is not blighted land. Put it out in open market, let zoning conform.”

As we reported earlier this month, under New Jersey law, the redevelopment process can be taken on properties that are severely blighted and/or dangerous. But it can also be taken to spur certain preferred types of development in an area if the plans are “consistent with smart growth planning principles.”

In its report on the Erie Street property, Jersey City’s Planning Division, while noting that the actual JCPD headquarters building’s structure is “in fair condition,” says the interior of the building has fallen prey to “substandard maintenance” and “deteriorating conditions,” and it dubs the surface parking lot “obsolete” and “substandard.” City planning and redevelopment officials maintain that this, combined with making sure the right kind of development goes into the area, is more than enough reasoning to designate it in need of redevelopment.

And as for the neighborhood group’s concerns, the council overwhelmingly thought their concerns were met in substance, if not in principle. Before voting for the ordinance, At-Large Councilwoman Kalimah Ahmad, told the neighborhood activists that she was convinced that it “complies with your concerns” in terms of keeping with the neighborhood’s historic integrity. She pointed instead to the lack of dialogue between the city and the neighborhood association as the problem, and something that needs to change.

“You just were not brought to the table, which we should make sure we do going forward,” she said. “You have a right to be heard [before] we draw up plans.”

At-Large Councilman Ray Velazquez, who voice similar concerns about the lack of dialogue, ultimately said that “it’s important the project moves forward” because the expected revenue is part of the budget plan. He also pointed out that just because the council is adopting the redevelopment plan doesn’t mean they will automatically accept any bid, nor issue a tax abatement.

“Clearly there’s some misinformation out there … there’s no tax abatement. We have the final say, if we don’t like the bids, [we can reject them],” he said. “But we can’t afford to waste time. We made a commitment to keep taxes stable.”

Council President Brennan was less sympathetic, pointing out that the redevelopment plan was heard and approved by the Planning Board in April.

“I don’t know how people are coming here and saying this is the first they’re hearing about it,” he said.

“We’re bad landlords, we don’t keep on top of buildings,” Brennan added, referring to the headquarters’ condition. “This redevelopment plan will enhance the neighborhood. It will improve your property.”

To allay some of the fears voiced by residents, Jersey City planning director Bob Cotter spoke at the meeting to explain the redevelopment process. He argued that because of the size of the lots in the project, the zoning restrictions in the neighborhood make it difficult to undertake worthwhile projects.

“There is very little floor play for residential units to be built” within the zoning requirements, he said. “It’s a practical thing. An apartment building that looks like five townhouses” would be more “efficient” for the space, and would look appropriate, Cotter argued. But it would technically violate the zoning.

“We’ll get the most value out of the property,” he said, pointing out that selling to the highest bidder does not always equal the best sale.

Cotter, like Jersey City Redevelopment Agency executive director Robert Antonicello, pointed to the “mistake” made at 121-125 Newark Avenue as a cautionary tale of highest-bidder selling. The city rejected a $2.3 million bid from a developer who had a plan that fit the neighborhood, they said, instead opting to sell the building at auction; it was ultimately sold to Brooklyn’s Lazer Mechlovitz for $2.61 million 15 months ago.

“The city sold the property to the highest bidder, and we got a pizza parlor that looks like something from 1962,” Cotter said, referring to Nick’s Village Pizzeria, “not something [belonging to] the 21st century [as] it should be.”

Cotter argued that more ambitious and fitting developments often cost more, and that often “takes away how much [a developer] can pay for property.” But he said the planning process must be viewed more holistically.

“[Mechlovitz] isn’t investing in Jersey City the way we need,” he said. “We should sell to the best proposal, not the proposal with the most money. Long-term investing is what’s important.”

Charles Kessler, a co-founder of the Harsimus Cove Association, said Cotter presented “interesting information,” but added that it would have been “nice if he’d come to our neighborhood association to get our feedback and tell us these things before it’s imposed on us. We want to have some feedback in the redevelopment plan.”

Meanwhile, another resident took to the podium to advocate for a different neighborhood she said is “in actual need of redevelopment.”

“What I can’t understand is how redevelopment and progress in Jersey City is happening [Downtown] and meanwhile in the Marion section we’re sitting and waiting for something to happen. There hasn’t been any progress; we’re standing still,” Jeanette Rotondo said. “I don’t understand why nothing has been done to encourage this redevelopment.”

Now that the Redevelopment Plan has been approved, the Jersey City Redevelopment Agency will begin the Request for Proposals process.

Photo: Ian MacAllen/New York’s Sixth

Planning Division director Bob Cotter, speaking at Monday’s council caucus meeting, cited the Jersey City Regional Waterfront Access and Downtown Circulation Study’s concerns over Jersey City’s ability to handle a greater influx of traffic that would be brought in by a parking deck placed in the middle of a residential neighborhood whose layout “was planned in the 19th Century.”

The parking deck issue is part of the city’s larger process to sell the historic JCPD headquarters building at 8 Erie Street and an adjacent lot, which is currently a surface parking lot. Ward E councilman Steven Fulop successfully halted the plan’s forward movement at the last City Council meeting when he suggested the city retain the surface lot and build a municipal parking deck there.

But as Cotter explained, the city’s long-term land-use vision is trying to encourage more walking, bicycling and mass transit use — not more parking lots.

“The award-winning plan discourages parking lots and encourages more productive uses,” he said. “Because of the density of the city, it argues for the elimination of service parking lots. One-way streets can’t accommodate such a high volume. The city would like to preserve the historic district.”

He added that there are plenty of parking garages — 15, according to the city’s tally — available in the surrounding area, including on Columbus Drive, a wider street that can accommodate the additional traffic. He noted that many of these lots are underutilized, and that if Fulop’s goal is indeed to provide Downtown drinkers and diners with additional parking options, perhaps the city could work with area restaurants to encourage parking validation at underused lots.

“There is enough parking, as far as I’m concerned, to accommodate people,” Ward F councilwoman Viola Richardson said. She had inadvertently sparked the controversy two weeks ago when she made the seemingly innocuous observation that the Downtown area could use more parking. “I didn’t know [the existing decks] were for anyone to use, I thought they were for people who lived in the buildings [near the decks].”

The administration also brought in an expert to refute Fulop’s claim that the municipal garage would be a long-term revenue source for Jersey City.

“To the best of my knowledge, no municipal parking deck pays its own way,” said Thomas Banker, a professor at Columbia University’s School of International and Public Affairs who also works as a consultant with parking firms like Edison ParkFast. (It was also made known that Banker taught Fulop while the councilman attended Columbia.) “Every other structured parking facility that is government built has some form of public subsidy.”

Structured parking, he added, even when efficient, requires $3,500 to $5,000 of revenue per space per year to pay for the operation, construction and accrued debt.

“[A] multiple-level parking garage, to be efficient, needs to be 120 feet wide and 210 feet long,” he said. “If you can’t have that, you’re compromising the integrity of the plan.” The available lot is approximately 110 by 120 feet, significantly too small for an efficient design.

Similarly, a mechanical garage that stores cars with lifts may require less space, but it is prohibitively expensive.

“A typical, efficient multiple level garage costs in the low $20,000 for a space for a year, while a mechanical garage is in the mid-to-upper-$30,000,” Banker said. “Additionally, mechanical garages can’t be self-park and require staff to be there 24 hours a day, seven days a week.”

Fulop, while saying it was a “nice touch” on the administration’s part to bring in his former professor in an effort to embarrass him, tells JCI that Banker is “hardly an unbiased individual” when it comes to building new parking decks Downtown, due to his professional relationship with Edison ParkFast.

“They own a massive parking lot behind City Hall,” Fulop says of the company. “Banker has a vested personal interest to say that we shouldn’t be pursuing a parking lot, because he works for someone who has a parking lot that may be impacted.”

And more broadly, the Downtown councilman says that “parking is one option of many” for the site, and contends that the city should slow down the sale process — a process that has also come under fire from the local neighborhood association.

“We should not be having a fire sale of property to a developer in a down market. We should explore options,” he says. “This should be a thought-out approach for the best use for the city, whether it is parking, education, commercial or residential.”

Photo: Ian MacAllen/New York’s Sixth

“It strikes us as odd that the city would be satisfied with selling 8 Erie and an adjacent parking lot — prime real estate in historic Downtown Jersey City — for a pauper’s sum of $4 million,” HCA president Mike Francisco says in a statement issued Friday (the $4 million figure comes from earlier reports published in the Jersey Journal; city officials hoping to oversee the sale contend there is no target purchase price). “Anybody who has recently looked at the price of a single-family row house knows that the stated sale price of 8 Erie and the adjoining parking lot is alarmingly low.”

Francisco’s statement also notes a lack of community planning and consultation with those who live and work in the neighborhood.

“Most troubling about this situation is that the proposed sale of this landmark building in the heart of the Harsimus Cove Historic District has not been opened up to the public,” he says. “The residents and business owners in Harsimus Cove and Downtown Jersey City should have a say in what ultimately comes of this property.”

The city’s Planning Division has recommended that the properties in question be declared “in need of redevelopment,” and has created a Redevelopment Plan to guide the future use of the site. Both of these measures were held up at the last City Council meeting, as Ward E councilman Steven Fulop questioned whether the city should keep some of the land for a municipal parking deck. But if the redevelopment measures go through, the bidding process would be altered, and the developer would also be eligible for potential tax abatements, in addition to other incentives.

Once designated “in need of redevelopment,” the bidding process would fall under the authority of the Jersey City Redevelopment Agency (JCRA), the autonomous agency that fosters redevelopment of areas in the city that are blighted, and has helped bring many large-scale real estate projects here.

“The JCRA, pending council approval, is about to begin the RFP [Request for Proposals] process for the sale and redevelopment of 8 Erie Street, which by nature is open, public and transparent,” Mayor Jerramiah Healy says. “Any person or member of the development community who would like to partake in this process is entitled to do so. The city is seeking the highest and best use of the property for not only the residents of Downtown, but also for all of our taxpayers.”

But one prominent good-government activist contends that using redevelopment is not the ideal process for this situation, and thinks that step should only be taken as a last-resort measure.

“By putting forward a resolution to initiate the redevelopment plan, the city started a process that will allow them to avoid zoning requirements,” says Dan Levin, who also lives in the Harsimus Cove neighborhood and is a former president of the HCA. “By putting it under redevelopment, they can limit potential purchasers to whoever they want.”

In other words, the JCRA does not have to award the project to the highest bidder. Instead, it reserves the right to reject “any and all” proposals if they are found unacceptable, as the agency phrased it in a recent RFP.

But JCRA executive director Robert Antonicello says this fact is actually a positive for local development, not a negative. He says that when the city sells a property directly, the developer who bids the highest has to be awarded the property, no matter what they intend to do with it.

“’What did they sell it for?’ is not the only question when selling a property,” he says. “When land is sold through auction, you might get a speculator who wants to flip the land later and sits on it, so the area [continues to be] unused.”

He points to 121-125 Newark Avenue as an example of the negative consequences of a direct city auction. A developer had expressed interest in the hulking property at the triangular corner of Newark, Grove and Columbus, and it planned bring businesses that fit in with the burgeoning “restaurant row” on Newark, according to Antonicello. However, the developer was firm on paying only $2.3 million.

The administration wasn’t thrilled with that purchase price, so it sold the building directly at auction instead, ultimately receiving about $300,000 more for the property, when Brooklyn’s Lazer Mechlovitz bought it for $2.61 million 15 months ago. Since then, one storefront pizza shop did open and several commercial tenants have begun to slowly fill in the upstairs offices. Antonicello contends that if the city had chosen to designate the building “in need of redevelopment,” the JCRA would have had more leverage to force the developer to work within a certain acceptable framework, and on a tighter timeline.

And while Antonicello readily admits that the agency often has ideas about what kind of development it wants at a site, he insists that doesn’t translate to pre-determining who will get to develop that site. The agency, he says, is completely objective when vetting RFPs; if not, developers wouldn’t want to invest the time and money it takes to even submit a RFP.

“If developers thought the process was crooked, they just wouldn’t bid,” he says, pointing out that a fully realized RFP could cost a developer as much as $30,000. “The process costs so much money.”

Redevelopment has historically been an action taken to properties in areas of serious urban decay and blight, as a means to entice developers to work in conditions that would otherwise be difficult or impossible. But that began to change in 1992, when New Jersey consolidated and revised its redevelopment law, creating more municipal flexibility for redevelopment plans.

There are eight criteria used to measure the appropriateness of a redevelopment designation under the state law, including if buildings are unsafe, dilapidated, “untenantable,” damaged by natural disaster, or “detrimental to the safety, health, morals or welfare of the community,” but also if the plans to redevelop are “consistent with smart growth planning principles.”

As the JCRA notes in its glossary of redevelopment terms, by using the criteria, the state has expanded the types of properties that can be determined in need of redevelopment, including “some not typically thought of as ‘blighted.’”

In its report on the Erie Street property, Jersey City’s Planning Division, while noting that the actual JCPD headquarters building’s structure is “in fair condition,” argues that the “substandard maintenance” and “deteriorating conditions” inside the building, as well as the “obsolete” and “substandard” surface parking lot are enough to qualify the property as “in need of redevelopment.”

Antonicello has also inspected the headquarters building, and he contends that the interior would almost definitely have to be gutted for either office or residential use; although he says it is “functionally operational,” he says it is too “dark and depressing” to be attractive to potential residents or business owners.

That, he says, combined with making sure the right kind of development goes into the area, is more than enough reasoning to designate it in need of redevelopment.

“Our mission at the end of the day is, how do you redevelop a city, how do you provide housing, how do you provide economic growth?” Antonicello says. “Price is only part of an analysis in a deal, we also consider, what do we want to happen here? What fits in a neighborhood? And does the developer ultimately have the capacity to fulfill his plan?”

The resolution declaring the area in need of redevelopment and a first-read ordinance approving a Redevelopment Plan for the area will both be voted on at Wednesday’s City Council meeting. If successfully introduced, the ordinance will be up for a public hearing and final vote on May 25.

Photo: Ian MacAllen/New York’s Sixth

- Charter School Put on Probation: The state has quietly put the University Academy Charter High School on probation. The school, located on the NJCU campus, was cited over concerns about the quality of professional development for teachers, the need for revisions of its curriculum and the lack of effective ways to track student achievement through data collection and other means. The Star-Ledger reports that the Jersey City Community Charter School was also warned to improve its student test scores or face a shut down.

- City Budget: The sale of two city-owned properties is seen as crucial to the Healy administration’s proposed budget.

- Newark Avenue Fire: A cat was killed and two residents were displaced by a one-alarm blaze that erupted inside a second-floor apartment at a building on Newark Avenue in Jersey City yesterday morning.

- Blood Drive on Monticello: Absalom of David Lodge 36 will sponsor a blood drive tomorrow on Monticello Avenue.

In Statewide News:

- Unemployment: New Jersey lost 13,000 jobs in January in both the private and public sectors, while the unemployment rate was unchanged at 9.1 percent.

- Redistricting: The tie-breaking member of the bipartisan commission that will draw the state’s new legislative districts said Thursday that he wanted to adhere to a series of legal principles in choosing a new map. MORE on the process from Politicker and NJ Spotlight.

- Shared Services: A bill that would forcefully nudge municipalities, counties and school districts to share services — or face a reduction in state aid — was introduced by Senate President Steve Sweeney Thursday.

- Carroll Nomination Withdrawn: Gov. Christie, who has previously gone to the mat with Democrats to battle for his choices, has quietly yanked Michael Patrick Carroll’s nomination to become a judge.

- Energy Costs: New Jersey’s Supreme Court has told the Board of Public Utilities to go back to square one on a plan that could have raised energy costs by an estimated $50 million.

- Transparency at Rutgers: Rutgers University officials has asked the state Supreme Court to reconsider a scathing appellate court decision that said the school’s board regularly violates “Sunshine Laws” during public meetings.

Properties up for auction range in minimum bid from $200 for a 3-foot-by-75-foot tract of land on Westervelt Place in Ward F to $350,000 for a 3.25 acre piece of land on Tonnelle Avenue.

As usual, the cut-rate auction prices are accompanied by the buyer’s agreement to “repair, alter and improve” the vacant buildings and similarly clean up the vacant lots.

The auction is scheduled for Thursday, November 4 at 10 at City Hall.

Photo: Steve Gold

City Property Auction Nov 10

Photos: Steve Gold

Editor’s note: A document initially included in this report was removed for several days under the threat of legal action. It was put back in the story on April 21. What’s up with that, you ask? Read our explanation here.

After a temporary break from the recent months’ drama at the March 24 meeting, council chambers were once again full for an emotionally charged three-hour meeting on Wednesday. Although the municipal budget has been at the center of much council brouhaha lately, the hottest issue at this week’s meeting was the council’s consideration of the labor contracts with the city’s police and fire unions. A brief flareup between former mayor Gerry McCann and Ward E councilman Steven Fulop, perennial rivals, added to the atmosphere of tension in the room. About 200 people attended the meeting, a large portion of them union members and their supporters. All nine council members were present to consider nine first reading ordinances, four second reads and 36 resolutions.

Police and Fire Contracts Rejected

After more than a year of negotiations between the city and the police and firefighters’ unions, respectively, the contracts presented to the City Council for approval at Wednesday’s meeting were roundly rejected. Despite the urging of union members to pass the contract — most memorably by Local 1066 Firefighters Union president Joseph Krajnik — the council was not moved. Krajnik’s face grew red and his words were passionate as he admonished the council in advance for their 1-8 vote against the resolution to ratify the contracts.

“There should be no doubt to support the men and women in blue,” Krajnik shouted. His tirade at the podium also took Gov. Christie to task for what he called a “lack of intestinal fortitude to help municipalities in their time of need.” Krajnik was perhaps referring generally to Christie’s evisceration of state aid to municipalities as part of his unsparing budget, but Krajnik’s ire was also visibly raised by a new law that requires all government employees in the state to contribute 1.5 percent of their salaries to the cost of their health benefits. This law will take effect on May 22, and the unions were hoping to have a negotiated contract in place before that date in order to delay taking on those costs.

Council members cited a lack of city funds to pay for raises that were promised in the contracts as the reason for their nays. Although the unions had conceded a change to their health care plan that according to business administrator Brian O’Reilly would save the city about $1 million annually, the raises called for in the contract are estimated to cost about $8 million over the four-year contract period. The contracts provide for a retroactive 3 percent pay raise for 2009, 3.3 percent in 2010, 3.4 percent in 2011 and 3.5 percent in 2012.

“I can’t in good conscience vote for a contract that gives these raises out when other employees are being furloughed,” said Ward B councilman David Donnelly as he voted no.

Council President Peter Brennan made his case for a no vote in similar fashion. “We had to pass two tax increases to meet our budget,” he said. “This city cannot afford another $8 million increase.”

The council members were backed up by a March 31 letter from Marc Pfeiffer, acting director of the state Division of Local Government Services (LGS). LGS did not approve of the agreement because it “disregards the ability of the employer and, by extension, the taxpayer to pay for it. … [It] is simply too expensive.”

In a letter of response, Mayor Healy informed Pfeiffer that the unions were unwilling to renegotiate the terms of the contracts and he was forced to submit them to the council as they were voted on Wednesday.

Although voices were raised during the public comment portion of the meeting, emotions really bubbled over the surface as the council voted the contracts down, and several angry supporters of the contract were removed from chambers. As Donnelly cast his nay, one man in the front row stood up and began to shout at him, but he was quickly shushed by police union head Jerry DeCicco. However, the man had more to say when Ward F councilwoman Viola Richardson added her no to the list.

“How many jobs are you working on disability,” he cried out, interrupting Richardson’s vote. Richardson is a former Jersey City police officer who retired from the force in 2001. She currently works for the Hudson County Department of Corrections. The councilwoman responded to the heckler only by shouting “Whatever” repeatedly.

The man continued shouting at the council while he was escorted from chambers by police officers, and several angry union supporters followed him out. Raised voices could be heard coming from the hallway for several minutes afterward.

Only At-Large councilman Mariano Vega* voted in favor of the contracts, saying that “the contract was fairly negotiated. … The question of whether we can afford this or not was part of that negotiating process.”

JC1TV Do-Over … Again

Beginning as a first reading ordinance proposed by Fulop, a change in policy for the city-owned cable station JC1TV has gone through several revisions and appeared on the council agenda Wednesday in its third iteration as a first read. The law would require JC1TV to televise city council meetings.

At the urging of the administration, certain controversial provisions were removed from the initial bill, such as requiring the live broadcast of meetings and council approval of the station’s program schedule. But even the watered-down version of the bill could not garner enough support from Fulop’s council colleagues to pass introduction and the bill was voted down on another occasion after Fulop reintroduced it.

After gaining an unlikely ally in Ward B councilman David Donnelly, a new version of the bill was introduced at the March 24 meeting, but it did not pass its second read on Wednesday. The new bill eliminated the additional cost of videotaping the meetings by repurposing the video capture system that the City Clerk’s office already uses to record council meetings. The majority of the council was supportive of the new cost-saving ordinance, but Ward D councilman Bill Gaughan, At-Large council members Willie Flood and Mariano Vega* and Council President Peter Brennan dug in their heels and lodged nays.

When those who voted no were asked by resident John Seborowski to explain their opposition, Brennan responded that “we have two weeks … to change our minds.” Those two weeks indeed proved critical.

At Monday’s caucus, city press secretary Jennifer Morrill and communications director Stan Eason asked the council to support a new first reading ordinance and defeat the second read that would appear on the agenda this week. The new ordinance removes a small number of sections, including provisions that set guidelines for programming priorities and formats, replacing them with a section specifically dedicated to the requirement to broadcast city council meetings. A provision setting a moratorium of 130 days before an election on a candidate for office appearing on the station “advocating any cause, viewpoint or proposed policy of a partisan nature” was reduced to 90 days; Morrill explained that 90 days was “more applicable” given other laws in New Jersey that govern this type of activity.

Morrill told the council that the new legislation “keeps intact the same sentiment that was present in the [original] ordinance,” and Fulop agreed.

“This captures everything in the first ordinance and achieves the goals,” Fulop said as he asked the council to support the new bill.

In order to convert the video capture made by the system installed in council chambers to a format usable by JC1TV, city clerk Robert Byrne explained that his office will need to purchase a $4,000 DVD recorder. Morrill told JCI that this one-time outlay is “a better cost savings” than staffing a two-camera operation at all meetings, which could create a situation where the Division of Communications would be required to pay overtime. “If we can do it without a body there it just seems more feasible,” she added.

With the administration’s stamp of approval, the full council voted to introduce the new ordinance on Wednesday, and the second read bill was unanimously defeated.

City Won’t Ask for Tax on College Students

A resolution proposed by Ward A councilman Michael Sottolano to request that the state legislature establish municipal service fees to be paid by college students was narrowly rejected by the council. Several representatives from New Jersey City University (NJCU), as well as a student and a community activist, addressed the council during the public hearing to urge the council to vote against the resolution.

As municipalities across the state search for ways to make up dramatic budget shortfalls in the face of dwindling state aid and plummeting property values, assessing fees to college students has emerged as one option to account for millions of dollars in revenue that cannot be collected from tax-exempt institutions such as universities. Wayne, Teaneck and Montclair are a few of the many North Jersey college towns that have passed similar resolutions.

Speaking at the caucus, Sottolano justified the need for the fees, which would be $100 per year per full-time student and $50 per year per part-time student.

Students “certainly do use an extraordinary amount of city services,” he said. “It’s about time that a lot of the tax-exempt [institutions] start to pay their fair share.”

Opposition to the bill was organized primarily by administrators at NJCU, including university president Carlos Hernandez, who spoke at Wednesday’s meeting. Hernandez stated that the model of taxing students originated in Midwestern towns “with residential colleges.” Jersey City’s colleges “are urban institutions; we’re largely commuter institutions,” he said. “I think the model is inappropriate.”

Hernandez also pointed out that 30 percent of NJCU’s students reside in Jersey City, meaning they would bear the burden of any municipal fee assessment in addition to local property taxes.

John Melendez, NJCU’s vice president for student affairs, brought the question of class into the conversation when he pointed out that “only 18 percent of our students come from families with incomes over $60,000.” Calling students at urban universities “the most vulnerable,” he said that municipal fees would represent an “onerous attack.” Similar points were made by NJCU librarian Sheila Kirven and student Veronica Garcia.

Local community activist and 2009 challenger to Sottolano’s council seat Rolando Lavarro joined the chorus of opposition. Saying that “these municipal service fees will bleed our students dry,” Lavarro centered his remarks around the rising cost of living, tuition and supplies that students are “already getting hammered by.”

In a statement released before the council meeting, Mayor Healy took a characteristically moderate position on the issue but expressed reservations.

“We are examining proposals such as this one and are reviewing the pros and cons they would have for Jersey City,” Healy said. “However, I am not sure the current resolution before the City Council is the best way to go about it. … [We] want to make sure we do not create a disincentive for students continuing to matriculate” at Jersey City’s colleges.

At-Large councilman Mariano Vega* was the resolution’s most outspoken critic on the council. Characterizing the bill as “ill-advised,” he said at Monday’s caucus that he was “opposed to singling out the colleges,” which he claims are responsible for bringing significant revenue into Jersey City “on open house day alone.”

Vega*’s son attends St. Peter’s College. When asked by JCI whether he felt he should have abstained from the vote, he said no.

“I don’t think it would have enriched or impacted my family, a hundred bucks,” he said.

Vega* was joined in voting against the resolution by Fulop, Ward B councilman David Donnelly, Ward C councilwoman Nidia Rivera Lopez, and Ward F councilwoman Viola Richardson. Despite the failure of this bill, the state legislature may yet elect to enact legislation instituting the municipal service fees.

Fulop Ruffled by Rival’s McCanntics

Providing an undercard to the main event of the police and fire contracts dustup, former mayor McCann and councilman Fulop locked horns during the public hearing portion of the meeting when McCann resuscitated an accusation of voter fraud he has previously made against Fulop.

McCann distributed to the council copies of a police report dated April 2008, in which city resident William Cortez stated that he and others were paid a total of $1,000 by someone from Fulop’s campaign to vote in several locations under several names in the 2005 election. Charges relating to the alleged fraud were never brought against Fulop or any other individual.

“I’m hoping that this type of activity doesn’t happen again,” McCann said. “This is something that I think we need to root out of Jersey City.”

After McCann concluded his remarks, a brief battle of wills ensued during which Fulop repeatedly demanded that McCann step away from the podium and return to his seat while Fulop responded. This mini-squabble ended with McCann standing just before the railing that separates the audience area from the dais and front tables.

Fulop did not mince words as he responded to McCann’s accusation, and his indignation was apparent.

“For two years you’ve been walking around with a fraudulent police report that one of your friends submitted,” he said. “There is not a shred of truth to this.” Fulop also took the opportunity to bring up McCann’s criminal record. “You didn’t lose an election, buddy; you went down in handcuffs!” Near the end of McCann’s second term as mayor, he was convicted on federal bank fraud charges and resigned his post.

The fiery exchange continued for only another moment or two, with calls for order erupting from the audience, before city clerk Robert Byrne put a stop to it.

“It’s over,” Byrne shouted. “I’m bigger than both of you. … That’s it!”

McCann returned to his seat, the next speaker was called, and that was indeed it.

Reliable’s Permit in Danger?

Community activist Felicia Collis returned to the podium this week to address the council on the issue of Reliable Wood Products‘ processing plant on Caven Point Road.

She reported that after a meeting between community members, who have been complaining for years about foul odors and fumes coming from the plant, and representatives from the Hudson Regional Health Commission (HRHC), which is contracted by the city to handle complaints of that nature, it has become clear that HRHC is unable to act on the community’s complaints.

Ward F councilwoman Viola Richardson, who has been advocating for the shutdown of the Reliable plant, has a new idea about how to go forward against the company. She has suggested that the council ask the city not to renew Reliable’s permit to operate at 50 Caven Point Road; the permit expires on April 30. “The ball is now in our court,” Richardson said as she asked her council colleagues for their support.

By way of additional suggestions, city attorney Bill Matsikoudis also offered up “the possibility of filing a lawsuit enjoining [Reliable's] activities.”

The council assured Collis that they are committed to resolving the ongoing issue and informed her that she should expect action in the coming weeks.

Firehouse Sales Bring in $880K

The public auction of four old firehouses on March 30 brought a total of $880,000 in revenue into the city’s coffers.

GothamWest Builders snatched up the one at 120-122 Monticello Ave. for the bargain-basement price of $140,000, while Paul Schaetzle of Union Street nabbed the one at 106 Boyd Ave. for $175,000. Meanwhile, the Jersey City Firemen Federal Credit Union was able to buy the building that houses them at the ominous-sounding 666 Summit Ave. for $275,000, and Brunelleschi Construction picked up 218 Central Ave. for $290,000.

In other city-owned property news, the council voted to introduce a first-read ordinance approving the sale of nine city-owned properties that “are no longer needed for any municipal public purpose or use” to the Jersey City Redevelopment Agency for a minimum of $4.2 million. The properties first have to be appraised, so that sum could go up, but the important thing for the city is that the agreement forces the JCRA to pay up by the end of this fiscal year (June 30, 2010).

The properties included are: 451-457 Ocean Ave./79-81 Dwight St., 115-121 Martin Luther King Drive/186-188 Woodward, 421-423 Martin Luther King Drive, some unidentified lots on Chapel Avenue, 100 Hoboken Ave., 824 Garfield Ave., 642-646 Communipaw Ave., 373-377 Communipaw Ave. and 28 Bright St.

Budget Watch

Regular readers of the council report will note that, as has come to be expected, the council OK’ed the usual resolution on the agenda approving emergency temporary appropriations that the city needs to fuel operations in the absence of a budget for the current fiscal year — which ends June 30. Well over $446 million, or nearly 88 percent of the fiscal year 2010 budget, has been spent in this fashion. Also following the usual pattern, Fulop cast the only nay against the appropriation.

With the final draft of the proposed municipal budget up for a vote at a special hearing next Wednesday, the council was also asked to introduce the budget as amended. In the weeks since the initial introduction of the budget in January, the administration has unearthed an additional $2 million in revenues and decreased the amount of the budget to be raised by taxes by over $10 million. Lopez and Fulop both cast votes against the amended budget without offering explanations.

Other First Reads

In addition to the first reading ordinance on JC1TV and property sale to the JCRA, the council approved seven other items unanimously with little comment. (For all the first-reads in their full-text glory, click here.)

• Ord. 10-053 would make certain amendments to the Tidewater Basin Redevelopment Plan, an area that includes the Golden Cicada bar on the corner of Grand Street and Luis Munoz Marin Boulevard. Planning division staffer Kristin Russell explained at Monday’s caucus that certain changes in the permitted height of buildings requested by Golden Cicada owner Cheng “Terry” Tan were agreed to in part by the Planning Board. But while the Planning Board agreed to increase the permitted height to four stories plus a set-back fifth penthouse story on corner lots, Tan is seeking no less than seven stories, which he says is needed to make his proposed construction project “financially feasible.”
• Ord. 10-054 would expand the R-1A zoning district to include seven properties on Duncan and Fairmount Avenues in Ward B. Donnelly stated at the caucus that he had supported the Planning Board’s recommendation at the meeting where the decision was reached.
• Ord. 10-056 would change the stop sign at the intersection of Erie and 10th Streets to a three-way stop.
• Ord. 10-058 would establish rules for on-street reserved and metered parking on Skinner Memorial Drive near the Jersey City Medical Center. Jersey City Parking Authority CEO Mary Spinello explained at the caucus that the new parking spaces would provide additional parking for hospital workers as well as teachers at nearby P.S. #3 and bring in revenue from sales of parking permits.
• Ord. 10-059 would change the flow of traffic and establish a no-parking zone along parts of Colgate Street near the Brunswick Estates housing complex in order to accommodate emergency vehicles traveling to and from the Jersey City Medical Center’s new Emergency Services headquarters at 415 Montgomery Street.
• Ord. 10-060 would authorize a 50-year license agreement with telecom carrier Light Tower Fiber Long Island to install and maintain telecommunications facilities in certain public areas. Light Tower will reimburse the city $5,000 for its administrative costs associated with the agreement.
• Ord. 10-062 would honor longtime local hockey coach Charlie Heger by naming the ice skating rink at Pershing Field after him.
• Ords. 10-057 and 10-061 were withdrawn at the caucus due to confusion about who had proposed the ordinances and why. Council President Peter Brennan and Spinello were under the impression that the ordinances, which taken together would raise the fees for parking permits on certain Downtown streets, had originated with Fulop. When Fulop stated that he had nothing to do with the ordinances, the council withdrew them.

Odds & Ends

• Only one of the four second reading ordinances was contentious, but it passed with the same 7-2 vote by which it was introduced. Fulop and Lopez both lodged nays a second time against an administration-backed bill addressing vehicles that belong to certain high-level staff members, which was drafted in response to Fulop’s failed ordinances that attempted to rein in the personal use of city-owned cars. The ordinance repeals provisions in the current code that regulate the use of city-owned cars assigned to staff by the mayor and replaces them with a clause that classifies the cars as “compensation.” The new bill is intended to reflect the fact that council members and department directors are required to pay taxes on their city vehicles.
• The second version of the JC1TV ordinance was euthanized 0-9 as agreed at caucus; you can read more about that and the other second reads here.
• The council approved a contract with American Traffic Solutions (ATS) to install a red-light enforcement camera system at Tonnele Circle as part of a state pilot program. The council authorized the contract in spite of the objections of a representative of Redflex Traffic Systems, which competed with ATS for the bid. Craig Primiani, a regional sales director for Redflex, brought to the attention of the council “three or four concerns” his firm had about the bid evaluation process. In particular, Primiani said he “was very shocked” to hear from the references Redflex had provided in their proposal that none of them had been contacted by members of the committee who were charged with making the decision about which vendor to use. He asked the council not to approve the contract with ATS and “go back and open the process.” After hearing from business administrator Brian O’Reilly, however, the council was evidently confident in the administration’s vetting process and voted 8-0-1 to approve the contract. Donnelly abstained, saying that he had been “somewhat involved in the [bid] process before I became a councilperson,” referring to his previous job in the Mayor’s office.
• The council voted to take the first step towards redeveloping the corner lot at Bright and Varick Streets Downtown, by authorizing the Planning Board to do a preliminary investigation into whether the lot — known officially as the “Bright and Varick Study Area” — should be declared either an “area in need of redevelopment” or an “area in need of rehabilitation.” The lot is currently occupied by trailers which are used by P.S. #3.
• Vega* cast the lone nay against a resolution to approve a license agreement with PSE&G; the agreement allows the utility provider to access property in Morris County that is owned by the city in order to perform tests related to an electrical transmission tower replacement project. Vega* voted against the bill as a protest against PSE&G’s practice of burning coal in Jersey City.
• We love it when folks turn 100. The council passed a resolution honoring retired cab driver Robert Ward, Sr., on the occasion of his 100th birthday, which was on March 25.
• All of the other resolutions were approved unanimously without comment.

What Are We Buying?
The council approved the following purchases on Wednesday:

• $360,000 for an automated system to issue citywide emergency alerts via phone, mobile and email (awarded to C3 of Nutley).
• $252,464.66 for the replacement of curbs and sidewalks around the city (awarded to Diamond Construction of Brick).
• $172,260.71 for the resurfacing of Sip Avenue between Kennedy Boulevard and Bergen Avenue (awarded to English Paving Company of Clifton).
• $92,904.40 for the installation and configuring of Info Cop software, a wireless system for law enforcement, and the provision of 20 software and toughbook bundles, (awarded to Gold Type Business Machines of East Rutherford).
• Up to $37,525.54 for additional environmental analysis and remediation at Hamilton Park (awarded to Melick-Tully and Associates of South Bound Brook).