Donald Trump submitted a new budget and a list of prospective investors for EnCap, the troubled landfills-to-golf courses project in the Meadowlands, as the state requested on April 15 and 18. Still, state officials were not satisfied with Trump’s submissions, stating they "leave open a number of important issues and include numerous contingencies," but providing no further details.

Attorney General Robert Romano said the state would be reaching out to Trump to meet to address the "issues and contingencies." Trump and Michael Cohen, Trump’s executive in the Meadowlands, met with the state on Friday. Neither Cohen nor a representative from the Governor’s office responded to questions about the content of the meeting by press time.

Rutherford Mayor John Hipp did not know what the state’s concerns were, but said he strongly objected to a private meeting between the Governor’s office and the Trump Organization. Hipp feels all the stakeholders in the project, including the New Jersey Meadowlands Commission and the local mayors, should be privy to all meetings. "We ought to be doing this as one group," he said.

The state Office of the Inspector General released a report in February detailing how EnCap "divided and conquered" state entities and local governing bodies in order to gain hundreds of millions in funding for the project.

The budget

Trump’s $124 million budget only described the cleanup of four landfills on the site and not the development planned for the remediated landfills. When Trump took the project over from EnCap in November 2007, he told the state he planned on amping up EnCap’s plans for building multi-story housing, a hotel, golf courses and retail and office space on the remediated landfills by adding more luxury housing and a "world-class" golf course.

Trump has not submitted any plans for this development and the state wants the developers to focus on the cleanup component of the project before a new development plan is discussed.

Still, Trump’s cleanup budget does not mention removing soil placed over the landfills believed by some to be contaminated. The fill media reports deemed contaminated came in because of lax monitoring of the site. The monitoring has since been changed to make sure there are state officials on location full-time.

Governor Jon Corzine said in a meeting with the South Bergenite last week that state experts have not determined how much contaminated fill EnCap put on the site or how contaminated the fill is, but did not rule out the possibility that the state will tell Trump to remove the soil.

Financing

Last week, Trump announced he was in talks with Cherokee, the main investor in the project, to buy out its interest in EnCap. Also, he said he was willing to front "significant sums" of his own money to entice investors to fund the project. According to press reports, Trump said he would front $35 million or more.

Trump submitted details on the investors interested in the project to the state. The potential investors include Deutsche Bank, Fillmore Capital Partners and ProCapital Associates.

Still, Trump said "an additional 180 days is required to permit completion of due diligence activities and successful access to funding for the Phase 1 Project," in his letter to the state, bringing the forbearance period to November 9, 2009.

The state has granted at least four forbearance periods to EnCap, periods of time offered to cure contract defaults. Forbearance period or not, the state still reserves the right to cancel the agreement at any time and collect a $150 million surety bond from AIG to close the landfills itself.

While Hipp believes this process is easily said and done, Corzine said last week he believes it will lead to lengthy litigation and slow the process of getting the landfills cleaned up. Hipp, an environmental lawyer, pointed to a November letter from AIG to the New Jersey Meadowlands Commission. The NJMC asked for the performance bond, but AIG said that until the contract with EnCap is voided, the agency could not collect the money.

Because EnCap has already defaulted on the contract, the state could pull out the rug from under it and still get the landfill cleaned up. "If we had taken action in November 2007, we’d have that money now and we’d be cleaning up this mess in a big way," said Hipp.

Corzine disagreed with Hipp’s view. "I have been in these kinds of situations in the private sector and it sometimes takes longer than people expect," said Corzine. "This isn’t about Donald Trump, it’s about making sure that we have the cash to keep financing the moving forward of the remediation."

Corzine believes fighting the insurance company in court to obtain the performance bond would be even more costly. "We’re certainly interested in making sure the public doesn’t end up losing a lot of money. We already have way more at stake than I think was reasonable," he added.