Passaic Library Sues For $100,000

Tuesday, October 16, 2007 Copyright 2007 The Record Online, North Jersey Media Group Inc.

By MEREDITH MANDELL

PASSAIC -- Two developers owe the city's financially strapped library system at least $50,000, and now the library is testing its claim in state court, officials said.

The Passaic Public Library filed a lawsuit in state Superior Court in Paterson on Friday to stop the municipal Redevelopment Agency from renegotiating a deal that stipulated that two local developers give the city's library system $100,000.

The developers, George Capodagli and Rigoberto Sanchez of River Edge at Passaic Urban Renewal LLC, signed an agreement with the city in 2005 to develop a 6-acre tract into a 138-unit residential community along the Passaic River. Part of the agreement called for the developers to give the library two $50,000 installments -- one after the redevelopment project's initial approval and the other at its completion. The developers failed to follow the time schedule.

The Redevelopment Agency, whose members are appointed by Mayor Samuel Rivera, has taken no formal action against the developers.

"At the very least we want an order that says $50,000 is due," Lane Biviano, library board attorney, said Monday. "The window will close if they can renegotiate that part of the agreement."

The legal action follows an article published in the Herald News last month, showing that the two developers, one with close connections to Rivera, signed a redevelopment deal with the city in 2005.

The developers told the Redevelopment Agency in June that the poor state of the city's real estate market prevented them from moving ahead with the project. As a result, the agency formed a subcommittee last month to negotiate a three-year extension and other amendments to the deal.

Glenn Carter, Redevelopment Agency director, said the clause in the agreement directing the developers to give the library two $50,000 installments would most likely be amended.

On Monday, an attorney for the developers said he felt the library board acted prematurely in filing the lawsuit.

"The whole premise of the payment is based on the development, and if there is no development, than there is no payment," said Henry Walentowicz, an attorney for River Edge, who added that he was unaware that the developers were in default.

Jennifer Credidio, special counsel for the Redevelopment Agency, said that based on the circumstances city officials have every right to renegotiate the deal with the developers.

"It would be highly unusual to restrain a municipality from exercising its redevelopment powers," she said, "including the negotiations in the redevelopment agreement as it may be necessary in the best interest of the city and its residents."

The lawsuit represents the latest issue in what has been a saga for the city's public library system, which includes the Julius Forstmann Main Library and the Reid Memorial Branch Library.

Last spring, the financial plight of the library regained public attention when library officials proposed shuttering Reid Memorial and moving a portion of the collection to the Passaic Boys & Girls Club.

At the time, library officials said they could no longer afford to keep the Reid open because roof repairs were too costly.

Public outcry stopped the plan, and Rivera later said he would start a private foundation to save the library.

But library officials contend the Reid requires at least $155,000 -- a lot more money than the $13,500 the mayor has said was needed to repair the roof.

In its lawsuit, the library board is demanding that River Edge preserve the Passaic library's status as a third-party beneficiary to the original redevelopment agreement.

The lawsuit also names the city of Passaic, Redevelopment Agency, Passaic Planning Board, River Edge at Passaic Urban Renewal LLC., along with its partners Capodagli and Sanchez

Sanchez, one of the developers, is a close friend of Rivera, who appoints all members to the Passaic Redevelopment Agency and all but one member of the Planning Board. Rivera, who also can appoint two members to the Passaic Valley Water Commission, also appointed Sanchez to the PVWC in January 2005.

The developers were supposed to buy 6 acres for the project from Walter Jurczak and Matt Realty of Branchville in Sussex County, by April 30, 2006, according to a copy of the redevelopment agreement. The contract stipulated that River Edge would pay the library $50,000 after receiving final approval for Phase I of the housing project and an additional $50,000 when completed.

The Planning Board approved site plans for the project in May 2006.

But the developers never paid the first $50,000 installment to the library.

The developers were unable to negotiate a purchase price with the property owners, who still operate their businesses at the same location.

Reach Meredith Mandell at (973) 569-7107 or mandell@northjersey.com.


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