Don’t believe everything you’re told — unless you get it in writing in an official legal agreement.
That’s what Kearny learned the hard way as part of a court ruling that nixed the town’s efforts to padlock the Keegan landfill.
In his July 27 ruling, Hudson County Superior Court Judge Peter F. Bariso Jr. concluded that the New Jersey Sports & Exposition Authority could use eminent domain to take ownership of the dump and extend its life.
Kearny, which accused the authority of “bad faith” in having promised to close the landfill after its lease expired June 30 so the town could use part of the 110-acre site for recreation, filed an appeal the following day.
As part of his ruling, Bariso appointed three condemnation commissioners — Fairfield attorney Gary Potters, Jersey City attorney Anthony J. DeSalvo and Union City real estate agent Carl J. Mucciolo to “fix the compensation” to be paid to Kearny for the property.
The court ordered the commissioners to report back to the court by Dec. 1 with their determination.
Potters, as “presiding commissioner,” is to be paid at the rate of $250 per hour while DeSalvo and Mucciolo will each receive $225 an hour for their work, by order of the court.
In his 34-page ruling, Bariso said that the NJSEA had a legitimate public purpose for taking the landfill, to generate revenues from tipping fees to pay for post-closure expenses like leachate collection and monitoring, not only at Keegan but at the 1D landfill at 1500 Harrison Ave. in Kearny.
But in a prepared statement, Kearny Mayor Alberto Santos said he felt the court “erred on the law [because] this condemnation action impairs the NJSEA’s contract with the town to surrender the landfill for recreation uses on June 30, 2016.
“The U.S. Supreme Court has held that the Constitution imposes a much higher standard of the state when it impairs its own contracts. That standard requires that the contractual impairment be ‘necessary to serve an important public purpose.’
“Unless that standard is met, the state lacks a valid public purpose to proceed with an eminent domain action. What the NJSEA is doing is clearly not necessary for post-closure of the landfill. A proper accounting will show that the NJSEA’s gross revenues from the Keegan landfill since 2010 exceed $150 million. In other words, more than sufficient funds have already been generated for post-closure costs [estimated at $30 million for Keegan spread over multiple years].
“At the end of the day, all we want is what was promised to us by [NJSEA predecessor N.J. Meadowlands Commission] officials at a public meeting held in Kearny back in 2005 [when we were told] that the town would get ‘a 9-hole municipal golf course … plus ballfields …. Or, it can be a whole series to complement Gunnel Oval, soccer fields, baseball fields and tennis courts ….”
But the court rejected the town’s arguments.
Kearny claims it was promised $3 million by the NJMC to develop those facilities after the closure of the landfill. Then, this year, after the NJSEA had announced its intention to keep the landfill open, the authority offered to buy the land from the town for only $1.88 million, Kearny’s complaint said.
Moreover, the town griped, when the NJSEA sought an extension of the Keegan lease through 2020, it “maintained that Kearny had the obligation to fund post-closure activities, a notion contrary to the lease terms and NJDEP findings.”
Ultimately, Kearny asserted, this is a case of the NJMC/NJSEA not living up to its promises — an argument that the court rejected wholesale.
The NJSEA countered that when it first proposed at a 2014 public hearing to extend Keegan’s operation — and thereby meet its statutory mandate — by raising the height of the mounds, from 60 to 100 feet (something it has yet to do), it got no complaints from Kearny.
Moreover, the NJSEA said, the existence of a lease agreement “does not foreclose NJSEA from exercising its right to eminent domain.”
Bariso found that the “NJSEA may acquire property through condemnation where it is necessary for any of its projects,” including “providing for solid waste disposal.”
In fact, the judge wrote, the case presented by NJSEA shows “conclusively that … Keegan … is an extremely vital landfill in northern New Jersey, and its closure at this time would have drastic and deleterious effects on the surrounding communities and their taxpayers ….”
This is true, Bariso concluded, because Keegan “is the only landfill” that accepts construction and demolition debris in northern New Jersey, because its use “is vital during natural disasters,” because its closure would cost the Passaic Valley Sewage Commission more than $8 million between now and December 2019 — a cost that PVSC would pass on to its customers and because NJSEA relies on Keegan revenues to pay for “post-closure obligations” at other landfills in the meadows district.
As for Kearny’s “bad faith” claim, Bariso wrote, “Kearny’s reliance on statements and other oral representations made before the lease agreement was entered is immaterial [since] … any prior oral statements cannot be relied on to alter the written agreement.”
Bariso wrote: “Kearny has … failed to present clear and convincing evidence that NJSEA’s true purpose for condemnation is an attempt to avoid its contractual obligations pursuant to the lease agreement,” especially, he added, as NJSEA has demonstrated that [its predecessor agency] spent approximately $25 million to … construct a leachate collection system and containment wall around the entire landfill, acquire adjacent land and build two sewage pump stations to move the leachate to the PVSC [treatment] facility.”
The condemnation action, Bariso noted, was initiated by NJSEA happened “only when it was served with a notice to quit [by Kearny].” The authority’s determination that it was better off in an ownership position versus a tenancy is a “choice [that] belongs to NJSEA; in this circumstances, this court cannot substitute its judgment for that of NJSEA.”
Any financial obligations contained in the lease agreement — such as the $3 million payment due Kearny — will be decided by the commissioners in the condemnation proceedings, Bariso said.
NJSEA was represented in the lawsuit by James Stewart of Lowenstein Sandler LLP of Roseland while Gregory J. Castano Jr. of Castano Quigley LLC of Fairfield appeared for Kearny.