Jones Lang LaSalle

City looks to earmark $33.5M for local projects
Funds part of disputed $80M intended for nonprofits
Thursday, March 16, 2006
BY JEFFERY C. MAYS
Star-Ledger Staff

Instead of giving $80 million to two nonprofit corporations to aid development, Newark will set aside $33.5 million in the municipal budget to fund projects ranging from an expansion of the Newark Museum to a dormitory for Seton Hall Law School, the city council and Business Administrator Richard Monteilh said yesterday.

The move comes a week after Susan Jacobucci, director of the state Division of Local Government Services, ordered Newark to "take no action" with the $80 million until her agency could review the deal. Four city residents also filed a lawsuit to stop the transaction.

The $80 million is a portion of the city's $450 million settlement with the Port Authority of New York and New Jersey over back lease payment for Port Newark and Newark Liberty International Airport.

Monteilh said the city's attorneys and auditors believe that they do not need state approval to appropriate the funds to city agencies like the Newark Public Library and Newark Museum through the municipal budget. The remaining $46.5 million will sit in reserve until a meeting with state officials, said Monteilh.

"We have the authority to make these appropriations within the law. More than half this money is going to city facilities," he said.

Sean Darcy, a spokesman for the Division of Local Government Services, disagreed.
"As a general rule, this letter prohibits the money from being used to make a charitable contribution to a nonprofit corporation," he said. "The Division of Local Government Services was advised that no action would be taken until our meeting."

The city and the division have had conversations about a meeting but have not set a firm date, added Darcy.

The council did not vote on the new proposals before The Star- Ledger went to press, but at least six council members expressed support for the plan.

Questions about the Newark Redevelopment Trust Fund Inc. and the Newark Neighborhood and Recreation Redevelopment Trust Fund Inc. arose after it was revealed that Mayor Sharpe James was on the board of trustees of both corporations and that both were incorporated the same day the council voted to set aside the money.

In addition, the agencies were funded before rules were established under which the money would be awarded.

Following a raucous meeting filled with arguments, jeers, cheers and passionate speeches from residents and candidates for public office, city council members endorsed the plan after saying that the public and former councilman and mayoral candidate Cory Booker had attacking them unfairly. With the May 9 election approaching and today the last day to file as a candidate, accusations of political grandstanding were rampant.

Earlier this week, a Booker- funded piece of campaign literature began arriving in residents' mailboxes. It accused James and the council members of using some of the $80 million to "fund their retirement account."

Two council members running on Booker's ticket, Augusto Amador and Luis Quintana, voted to endow one of the corporations with $30 million, a fact not mentioned in Booker's campaign literature. Both changed their minds and unsuccessfully attempted to have the council rescind their earlier action last night.

After announcing the projects they wanted to spend money on, a few council members threatened to sue Booker for slander and libel. Booker could not be reached for comment last evening.

"I didn't break any law. I didn't do anything illegal," said Councilwoman Bessie Walker.
"Build a brand new school for special needs children. This is the slush fund they are talking about," said Council President Donald Bradley as he held up a large board with a list of all the proposed projects.

Monteilh said the goal is to boost the level of development going on around the city with projects that will help to change the face of Newark.

"We want to get the enthusiasm out that other development projects apart from the arena can get going. People want to see that the city is trying to drive the quality of life in Newark," said Monteilh.

In addition to giving money to the museum and library, the city would help fund a $5 million redevelopment of Symphony Hall. The city would also provide Seton Hall Law School with a $3 million loan to help its student housing project get off the ground. Some of the organizers of the projects to be funded have to present the city with redevelopment proposals that will have to be approved by the city council.

"I want $5 million for Newark Symphony Hall. I want $1 million for summer jobs," said Councilman Ras Baraka. "I wouldn't vote for $80 million to go into anybody's pockets."
But angry residents questioned the council about the way it originally appropriated the $80 million, saying they did not see any public input, the money was awarded hastily before an election and the council was unsure of all the details about the nonprofit corporations themselves.

"Representing the public means we ensure that the people are aware of critical public issues before we make final decisions and that they are given the chance to comment, influence and participate," said community activist and advisory school board member Richard Cammarieri.
"It is your responsibility to take care of our money and make sure our future is secure and our children's future is secure," said resident Leonard Thomas.

Cammarieri said he didn't know what to think of the council's latest funding proposals because, like the original proposal, they were kept from residents until the last minute.