An Ocean County judge has ruled a lawsuit filed by two residents to stop a township redevelopment pact they claim amounts to a $9 million public gift to a religious organization should proceed because it has “important public interests.”
Attorneys for Lakewood and the endowment fund of Beth Medrash Govoha, the world’s largest university for Talmudic studies, filed a motion to dismiss the 2010 lawsuit brought by plaintiffs Joseph DeFalco and Yehuda Shain, both of Lakewood. Their motion to dismiss the case was based on a time limit typically used on land deal lawsuits.
However, Judge Vincent J. Grasso on June 5 denied the motion, contending a time limit was not enough to warrant dismissing the suit.
The focus of the lawsuit is 240-plus acres called the Southwest Acquisition Area, which stretches behind BlueClaws Stadium at Cedarbridge and New Hampshire avenues and Pine and Vine streets, and a Township Committee plan in 1996 to redevelop 50 acres along Pine Street into senior residential housing.
In November 1999, the Cedarbridge Development Corporation, formed to act as a for-profit arm of Beth Medrash Govoha, offered a plan for the land to township officials, according to township records. The Cedarbridge proposal offered "high end employment opportunities and tax ratables and generally lift up the whole image of Lakewood," according to court documents.
However, Cedarbridge CEO Jack Mueller had said the 50-acre tract along Pine Street had to be part of the deal to be used as seed money.
By June 2000, plans were in place for a high-tech business park. By 2005, with the township’s assistance, Cedarbridge paid $10 for the 50 acres and then sold the land to Somerset Development LLC for $9 million.
The township agreed to transfer the property if Cedarbridge installed water and sewer service for the potential new businesses.
Cedarbridge officials had said BMG and Lakewood would flourish with the proposed mixed-use corporate park. In exchange, the township would reap a large taxable income from the business development.
But between a downturn in the economy and problems obtaining permits, among other issues, the corporate park never happened.
Now DeFalco and Shain want the agreement between Lakewood and BMG nullified and the township reimbursed the $9 million that the university made in their land deal.
“There are 240 acres of land sitting in the southwest area that could bring in $150 million to the township,” DeFalco said during a recent interview. “The township is embarrassed or refuses or whatever to knock out that option agreement and free themselves so those 240 acres can freely be put it to the open market.”
DeFalco originally filed the suit with Hershel Herskowitz of Lakewood. Shain, a licensed real estate developer who was added a year later as a plaintiff, said there is viable residential development waiting to bring much needed tax revenue for residents now.
Michael M. DiCicco, the attorney for Lakewood, defended his motion to dismiss, saying the deadline to act on the deal has passed. Grasso disagreed, and his decision allows the lawsuit to continue, though no trial date has been set.
“The failure is the township is not minding the store and is giving away the store and the township has to be called to task for that,” DeFalco said.
Cedarbridge also should reimburse state-invested money — $8 million worth of Department of Transportation grants obtained for the project’s infrastructure that Cedarbridge agreed to provide, said DeFalco’s and Shain’s attorney, Michelle Donato of Lavallette.
Cedarbridge representatives have claimed they spent “millions” on the property, but Donato said there is no proof. The next phase of the lawsuit will include discovery made by both sides including expenses, she said.
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