Stopping EnCap in North Arlington does not come cheap. The council voted unanimously to approve up to $300,000 to pay for the legal battle between the brownfield redeveloper and the borough.
Borough attorney Anthony D’Elia reminded the public that Cherokee, an EnCap-affiliated developer with plans to turn light industrial businesses and warehouses on Porete Avenue into a 1,625-unit housing development, sued North Arlington for the borough’s refusal to condemn Porete properties.
Now, the borough must incur litigation expenses, including attorney fees and payments to expert witnesses. D’Elia estimated the cost to fall between $200,000 and $300,000.
Cherokee filed its suit against North Arlington at the end of 2006. Legal fees jumped $220,000 in 2007, largely due to payments for special counsel to handle the litigation with Cherokee.
D’Elia admitted the borough hoped EnCap would collapse entirely this year and still hopes this will be the case. Nonetheless, EnCap’s backer, Cherokee Investment Partners, appears to be in good financial shape as it continues to fund projects across the country and around the globe. Cherokee’s finances could not be obtained because it is a private company and its records are not available to the public.
On Jan. 14, the borough would have gone to court for a case management conference with Judge Jonathan Harris. This conference gives the lawyers from either side a chance to talk with the judge about the case and come up with a time frame for discovery, the process where each side presents their evidence, according to borough redevelopment attorney Joe Maraziti.
Borough attorneys must review 1,200 documents from state agencies such as the New Jersey Meadowlands Commission, the Bergen County Improvement Authority and the Department of Community Affairs to prepare for its battle with Cherokee. In addition, the borough must hire financing experts.
"It’s labor intensive and it costs money," said D’Elia, adding that the resolution reaffirms the desire of both the democrats and newly-elected republicans Joseph Bianchi and Richard Hughes to "get out from under the EnCap mess."
Bianchi and Hughes voted in favor of the resolution. Councilman Salvatore DiBlasi, who owns a business on Porete Avenue, abstained due to the conflict of interest.
Mayor Peter Massa noted the possibility that litigation could be settled out of court. Regardless, the borough is legally obliged to defend itself against Cherokee’s suit for the time being. "We do have to take the proper precautions to make sure the community is protected," said Massa.
