By Ron Leir
The EnCap bankruptcy and subsequent demise of plans to turn part of the Meadowlands into a recreation/entertainment mecca have spawned a Swamp War over tax dollars between Lyndhurst and the New Jersey Meadowlands Commission (NJMC).
Lyndhurst took its case public at an Oct. 3 press conference to zap the NJMC for failing to pay taxes on 13 township parcels that sit in the Meadowlands district and that are now part of the NJMC’s Kingsland Redevelopment Plan.
In a letter sent Aug. 22 to Gov. Chris Christie, Lyndhurst Mayor Richard DiLascio said that EnCap, which the NJMC designated to develop those parcels, ran up “a sizable delinquency” on property taxes owed for that land.
That tax obligation, DiLascio said, “was assumed by the NJMC” which, he added, “has not paid the delinquent taxes . . . .”
In April 2011, the NJMC filed an appeal with the New Jersey State Tax Board, claiming it was exempt from any tax obligations.
In May, Lyndhurst proposed a settlement of the matter but has gotten no counter offer from the NJMC, DiLascio said. “As part of our settlement proposal,” the mayor noted, “we have offered to forgo interest on the (tax) lien and tax balances.”
In the absence of any formal response, DiLascio said Lyndhurst is appealing to the governor for help.
“We are prepared to meet in Trenton, or any other place, at any date and time so as to finally resolve this issue,” he concluded.
At stake, according to Lyndhurst fiscal experts, is a 6-year tax bill for an estimated $9 million and climbing.
In response, Lori Grifa, state Community Affairs commissioner and NJMC chairwoman issued a statement reading: “The assessed value of the taxes associated with these 13 properties (and the obligations related to them) has been in dispute for quite some time.
“The New Jersey Meadowlands Commission was awarded title by court order to these properties in March 2011. A tax appeal was promptly filed. There is now also litigation pending.
“We regret that the Township of Lyndhurst has chosen to mediate this dispute in public. The Commission and Department of Community Affairs has consistently said it is willing to negotiate, but it must be under a system that is fair to all parties.”
DiLascio declined to provide specifics about the township’s settlement proposal but did say that Lyndhurst “has talked about PILOTs (payments in lieu of taxes) – we don’t have any objections to it.”
And, in his letter to the governor, DiLascio says that the NJMC “has sufficient resources to pay the settlement proposed by the Township and structure a fair and final resolution.” He says an auditor found that NJMC “has $7,429,051 in unreserved surplus . . . out of a total surplus of $20,978,635. This surplus has been created out of the wallets of the Lyndhurst taxpayers and should be paid to the Lyndhurst treasury.”
Until last week, Lyndhurst was refusing to pay the second installment of its NJMC tax-sharing pool contribution to six “receiving” districts, including Kearny and North Arlington, which was due Aug. 15.
Kearny filed a claim against Lyndhurst in Hudson County Superior Court to collect the $175,000 it is owed from the tax-sharing pool account.
“We feel that Lyndhurst’s issue with the NJMC is unrelated to the tax-sharing issue,” Kearny Mayor Alberto Santos said.
Santos said that Lyndhurst came across with its payment last Thursday.
Robert Benecke, Lyndhurst’s financial consultant, placed the assessed value of the disputed 13 meadows parcels at $122,347,500 which, he said, would have translated to $2,261,881 in real estate taxes for 2010.
In its appeal, the NJMC simply claimed that, as a state agency, it was tax exempt, and listed no assessed values for the disputed properties. It listed eight, including several landfills that are being remediated, as vacant land and the rest as industrial sites.
In a deal transacted in September 2004, Lyndhurst was “promised over $500 million in new revenues over 35 years (from the EnCap venture),” DiLascio said.
Now, the mayor said, “the New Jersey Meadowlands Commission owes us millions as we battle for survival . . . . What was dubbed ‘the Miracle of the Meadowlands’ has become the ‘Disaster in the Dumps’. ’’
When asked why Lyndhurst doesn’t take the NJMC to court, Benecke replied: “We can do things at a higher level (but) we don’t want to do that. We could end up in litigation for years. We just want them to come to the table.”