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Vol. LXI, No. 40
Wednesday, October 3, 2007
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Despite Ongoing Concerns, Borough-Developer Talks Will Continue in Private

Matthew Hersh

Princeton Borough Council last week voted to continue negotiating in closed session with the developer contracted in the municipal downtown development project, amid increasing concerns that a handful of sticking points between the two parties would be better aired in public than behind closed doors.

The developer, Nassau HKT Urban Renewal Associates, LLC, has been in closed session talks with the Borough for more than a year in a project that is now almost three years behind schedule. Major sticking points in the negotiation process include legal fees picked up by the Borough in a series of mostly resolved liens filed by subcontractors against the deposed former general contractor, Troast, in relation to the first phase of the redevelopment project, which included Hinds Plaza, Witherspoon House, and the Spring Street Municipal Garage.

The Borough and NHKT are also stuck in talks concerning when the developer was supposed to begin paying ground rent on the Tulane Street surface parking lot, the tentative future site of a five story, mixed-use residential and commercial building. The Borough contends that the developer should have begun making payments, about $15,000 per month, starting in April 2006. NHKT principals have said otherwise, citing delays to the completion of the garage that, per the developer’s agreement, precluded NHKT from getting started on the Tulane lot.

In August, Borough Council revealed that it would furnish a final offer for the developer that would either be honored, or would otherwise take the Borough in one of several directions, including a temporary hold-off on the Tulane Street development, the potential search for a new developer, or finding alternate development options for the site. However, several members of Borough Council have said that a continued dialogue with the developer would be in the best interest of the project, considering that NHKT’s principals include a silent financier who is a Borough resident and Jack Morrison, a prominent business owner whose holdings include Witherspoon Grill and Blue Point Grill.

That final offer has not yet been publicly revealed, and the Borough Council, in endorsing last Tuesday’s 4-2 vote to proceed with closed session negotiations, has, for now, expressed a willingness to move ahead under the recommendations of Borough attorneys.

But that willingness began to show signs of wear with two Council members urging public disclosure of the negotiations process, and other members of Council appearing to be on the brink of phasing out any behind-the-scenes talks.

Neither Mr. Morrison, nor NHKT consultant Robert Powell, a former NHKT principal whose holdings have since been bought out, were present at Tuesday’s hearing.

On September 14, Borough Hall received a response from NHKT that, according to Councilman Roger Martindell, suggested that the Borough “was not engaged in good faith negotiations.”

Mr. Martindell did not say what led NHKT to take that stance, but he said the missive was a sign that the Borough could begin thinking about other options. “It would be a mistake, at this time, to go into closed session discussions about Nassau HKT’s positions, unless we announce our final offer publicly so people know where the Borough stands,” he said, adding that further negotiations would not be “credible” from a public standpoint if they were to be conducted privately.

“We said it was the final offer, and now we’re going to go back and look at our final offer: how final is the final offer going to be?” Mr. Martindell said.

Councilman Andrew Koontz agreed with Mr. Martindell, saying that “much of the complex portions of this project have been completed” but that the developer “seems to think that they can demand the full attention of the Mayor and Council for every detail of the project.

“We have spent an enormous amount of time on this project and I’m not sure it’s been time well spent,” Mr. Koontz said, adding that open session review could expedite the process.

But Barbara Trelstad, as well as other Council members who favored continuing private review, said that Council should meet in closed session to examine the latest NHKT response, and then discuss potentially opening the process.

Council President Peggy Karcher disagreed with Mr. Koontz, saying that the developer “should have the full attention of Council,” though she warned that a full public negotiation could be damaging.

“To open it to the public at some point and have members of the public opine this way or opine that way would not move us forward,” she said.

But Mr. Koontz contended that closed session discussions were “meant to protect the interests of the public and I have a strong concern that we are going into closed session to do exactly the opposite — we are negotiating the work at the expense of the public.”

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