While the EnCap deal is over, nothing changed in North Arlington’s lawsuit with Cherokee Porete, one of EnCap’s "cousin corporations" that struck its own deal with the borough separate from EnCap’s deal in the Meadowlands.

The fate of Porete Avenue, which falls entirely under North Arlington’s jurisdiction just outside of the New Jersey Meadowlands District, will remain in litigation. North Carolina-based Cherokee Investment Partners funds both EnCap Golf Holdings and Cherokee Porete. But while EnCap filed for bankruptcy, Cherokee Porete did not. "They set up limited liability corporations like you collect comic books," said Borough Attorney Tony D’Elia at the May 8 mayor and council meeting.

Cherokee Porete sued North Arlington at the end of 2006 after the borough failed to acquire Porete Avenue businesses through eminent domain to make way for Arlington Valley, a 1,625-unit housing development. North Arlington has since countersued, alleging that Cherokee Porete did not have the financial wherewithal to complete the project.

"The lawsuit continues," said D’Elia. "We’re going ahead with the litigation."

Michael Cohen, The Trump Organization’s executive vice president in the Meadowlands and the project manager of Cherokee Porete, said Trump will continue to pursue development on Porete Avenue. "We’re looking at all options available, but will take into serious consideration the wants of the mayor and the local populace," said Cohen.

As for any changes to the redevelopment plan, Cohen said everything is on the table. "We’re looking forward to meeting with Mayor Peter Massa and Borough Attorney Tony D’Elia," said Cohen.

Council President Steve Tanelli, an outspoken critic of both the EnCap deal in the Meadowlands and the Cherokee Porete deal in North Arlington, believes the turn of events will benefit North Arlington’s legal battle. Tanelli said the NJMC’s decision to terminate the EnCap agreement strengthens the borough’s argument that its cousin corporation, Cherokee Porete, never had the ability to execute the agreement. Furthermore, the governor’s refusal to hand out PILOT (Payments in lieu of taxes) bonds, money borrowed for government backed by future property taxes, set a precedent for other developments seeking this kind of financing, like Arlington Valley.

"While our litigation remains on the table at this time, we’re confident the elimination of phase one will eventually mean the elimination of phase two," said Tanelli.

Dumping could continue

When the New Jersey Meadowlands Commission and EnCap envisioned their plan for a large-scale golf course and housing development atop landfills in Rutherford, Lyndhurst and North Arlington, the NJMC decided to close the 1E landfill in North Arlington and Kearny and shut down its baler.

The decision to close the landfill was influenced by the luxury development plans for the surrounding properties. The landfill is currently slated to become a Bergen County public golf course, although a feasibility study revealed the project would be very costly.

The North Arlington borough council passed an ordinance on May 8 asking the NJMC to keep the landfill and the baler open, stating the benefit to the taxpayers would be worthwhile. The landfill is scheduled to close at the end of 2008. "I think it has to stay open now because there is no plan to close the landfill without EnCap," said D’Elia. "The overall project collapsed. There is no money to cap the problem and no reason to shut it down."

Currently, the borough receives $1 million per year in host fees from the New Jersey Meadowlands Commission for baler operations and over $350,000 every six months in revenue from the landfill. Also, the borough does not have to pay tipping fees, which costs area towns $700,000-plus annually.

The loss of revenue for dumping operations in the borough has been at the center of discussions about the borough’s financial crisis, which Mayor Peter Massa declared when he took office in 2007. That year, the borough experienced a 33-percent tax increase incurred by the loss of impact fees from Cherokee Porete. The developer stated it would place impact fees in an escrow account while they were in litigation with the borough.

This year, the borough focused on cutting corners and introduced a zero-percent tax increase. Still, the loss of $1.7 million in revenue and a $700,000 expense for tipping fees would take a 20-percent chunk out of North Arlington’s revenues.

The landfill is due to reach its maximum capacity in or around Dec. 31, 2008, at which point it is scheduled to close, according to Brian Aberback, a spokesman for the commission. The future of the landfill and the baler depends on the outcome of North Arlington’s court case with Cherokee Porete, he added.

"If North Arlington wishes to keep the baler and the landfill, if it hasn’t reached capacity, open past Dec. 31, we will work with them if possible to accommodate their wishes," said Aberback.