$25.5 million Zimmer debacle revealed

9/22/2010:

HOBOKEN411 EXCLUSIVE!

Lawsuit details how Dawn Zimmer botched sale of Muni Garage

SHG accuses Zimmer administration of fraudulently seeking NJDEP approvals by closing deadline

Hoboken411 has obtained documents filed by developer S. Hekemian Group (SHG) in its multi-million dollar lawsuit against the City of Hoboken.

The 322-page filing outlines the path to disaster for the $25.5 million sale that began to unravel when Dawn Zimmer became Mayor. The suit draws a roadmap that exposes the false statements made by Zimmer, un-elected Councilman Michael Lenz and their “public relations team” in an effort to hide the city’s bungling of the sale and garage relocation. SHG is seeking a jury trial in Hudson County Superior Court, which will likely involve sworn depositions of the Mayor and other key players in this debacle. Here’s an exclusive look at how SHG is making its case.

SHG: Hoboken is in Breach of Contract

SHG’s suit repeatedly refers to the terms of the Purchase and Sale Agreement (PSA) and Re-Developer’s Agreement (RDA) specifically approved by a vote of the City Council, including Dawn Zimmer and Peter Cunningham. The PSA states the city was obligated at its sole cost and expense to investigate and remediate certain environmental conditions on the garage site and obtain specific approvals from the NJ Department of Environmental Protection in order to close on the sale of the property. This included a site-wide No Further Action letter regarding soil contamination and an approved Remedial Action Workplan for groundwater. That may sound a bit complicated, but by all accounts it should have been easily accomplished within the time allowed before the sale deadline. All it would take is a bit of due diligence, which is exactly what Zimmer lacked throughout the process.

Zimmer accused of fraud trying to secure NJDEP letter

SHG charges Zimmer’s team submitted information and reports to NJDEP that mis-characterized the results of their environmental investigations and ignored regulatory requirements – as well as the advice of her own consultants – in an effort to fraudulently obtain approvals by the August 13th Closing Date.

For months, critics of Zimmer’s handling of the Muni Garage fiasco were warning that she was not going to get her DEP letter because she had ignored the problem for too long.

Repeatedly Zimmer, Lenz, Environmental Services Director Jennifer Wenson-Maier and Zimmer’s legal and environmental consultants said the critics were wrong, and all would be well by the closing date. Now, nearly six weeks after the deadline, there’s still no sign of the NJDEP letter Zimmer said would come before the closing. With her credibility in tatters and a default looming, Zimmer and her 5-vote council majority chose to speciously declare SHG in default three days before the city would officially and spectacularly default on its own.

SHG was ready to close the sale August 13th

In spite of Lenz’s repeated public claims that SHG “Never had any intention of closing the sale,” the developer outlines the opposite in the suit against the city.

These unsubstantiated and politically motivated comments by Lenz will likely come back to haunt him once he’s deposed under oath by SHG’s attorneys. SHG notes it was Zimmer who failed to appear at the scheduled time and location of the closing where they were ready, willing and able to conclude the sale. This means they’re prepared to go to court and prove they had access to the $22,950,000 due at the closing to buy the property.

Lenz and Zimmer try to keep SHG’s money, charges of tampering rebuffed, the most likely outcome in court & all the supporting legal documentation available after the jump!

City wants to keep the deposit, SHG says not so fast…

The lawsuit seeks to compel the return of SHG’s deposit of $2.55 million plus accrued interest held in escrow since June 2008 and all fees paid including a City Administrative Fee of $200,000. On top of that $2.75 million, SHG is seeking court costs, attorney’s fees and “other relief this court deems appropriate” following a jury trial. SHG also notes the original closing date for the sale was May 31, 2010 but was extended “upon the city’s insistence” to August 13. While SHG was informed of the change, it was later learned that Zimmer failed to inform the bank that held the note on the property.

Suit annihilates Zimmer claims of SHG tampered DEP approval

The city’s pre-emptive charge SHG was “in breach” of their agreements was based on their claim the developer was improperly involving itself in the environmental investigation discussions. Zimmer and Lenz tried to make a case that this involvement caused the delay of the DEP’s NFA letter. In the suit, SHG outlines how it only involved itself to the point allowed in the contract, and that it was the city that participated in improper ex parte discussions. SHG notes the agreement specifically states the city won’t contact DEP without contacting the developer first, and that Mayor Dawn Zimmer herself tried to twist arms in Trenton to get the letter without informing SHG of her contact, in violation of the contract.

The environmental stuff is pretty heavy, especially in regards to the rules and regs of a cleanup. It’s all in the documents below for those who wish to take a look and see exactly how out-of-line the Zimmer Administration likely was throughout the process.

The bottom line:

SHG is probably getting its money back, and then some

Zimmer has yet to answer any of the allegations in the lawsuit, and none of the so-called “traditional media” has even bothered to look into it.

Instead, they accept carefully-crafted press releases from Zimmer’s office as fact, and leave the hard work to others. Zimmer’s pattern over the years is to do anything she can to avoid having to testify in court.

She gave up her city council seat in 2007 rather than see more of her campaign workers deposed about illegal practices. Just this week, Zimmer announced she was attempting to end litigation with Hoboken Unleashed over the city’s improper occupation of 1714 Willow Avenue rather than face being sworn under oath. Though she wants the case dismissed, Mike Stigliano is fighting for the rights of small business owners throughout Hoboken and pressing on with his case.

Hekemian is a much bigger fish than Stigliano with deeper pockets and even more reason to be royally pissed at Zimmer. Judge for yourself by reading the documents and you’ll find their lawsuit is quite thorough. Zimmer and Lenz may yet try to squirm out of it with an offer to give SHG back it’s $2.75 million, but the developer is not likely to let them off so easily. Discovery will be very interesting in this trial. Hoboken411 will continue to lead the way on the never-ending Muni Garage story.

Documents:

SHG Hoboken Renewal Associates vs. The City of Hoboken

OFFICIAL COMPLAINT AND JURY DEMAND (31 page document clearly outlining the facts of the case)

Supporting Exhibits you may (or may not) want to follow along with in the complaint

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Leave a Reply

14 Comments on "$25.5 million Zimmer debacle revealed"

mooshu
Member
mooshu

Ugh. I am absolutely ashamed that this woman is a member of my own species…

matt1122
Member
matt1122

TL;DR version: Zimmer’s an idiot.

AndyT
Member
AndyT

Can we impeach her, she is a bumbling fool !

xyzpdq
Member
xyzpdq

SHG’s complaint reads more like an indictment of the Mayor and her bumbling crew. Fraud is a very strong word for them to use. Now I understand why the developer didn’t speak up. They had such a slam-dunk court case against Zimmer they wanted to hit her only where it counts. The bad news is we’re all going to pay for her incompetence and negligence. It’s not just the $25.5 million. It’s millions in tax revenue and jobs lost. Massive FAIL.

hobokenj
Member
hobokenj

Anybody else starting to wish we gave Cammerano a pass…can we have a more incompetent mayor????

Litteredboken
Member
Litteredboken

We should have more of a choice than a crook or a moron. [quote comment=”197781″]Anybody else starting to wish we gave Cammerano a pass…can we have a more incompetent mayor????[/quote]

getz76
Member
getz76

Exactly. Especially for a job that pays as much as it does (even without stuffed envelopes) for what should be a part time job.[quote comment=”197787″]We should have more of a choice than a crook or a moron.

[/quote]

judy law
Member
judy law

If some one out there where wishing to do some real investigating (hint hint) they should look into what Hoboken now has to do to clean up that site. My understanding is once you start a remediation process you have to finish it. Can Zimmer just say move back and let the enviormental problems just lay there? Somebody better get on her!!!!!!!! Sorry to knot your tail Dawn! More money! More lawyers! More taxes! Oh yeah more layoffs! Going forward should a municipal worker become ill, boy you staring down the face of a major law suit! [quote comment=”197781″]Anybody else starting to wish we gave Cammerano a pass…can we have a more incompetent mayor????[/quote]

whineanddineinhob
Member
whineanddineinhob

The city is most likely one of the pollutants with their garaged cars and what not. The mess is an environment problem when the property is being sold and has to be cleaned up for the next tenant. In this case, the city is moving back on it’s own property.[quote comment=”197782″]If some one out there where wishing to do some real investigating (hint hint) they should look into what Hoboken now has to do to clean up that site. My understanding is once you start a remediation process you have to finish it. Can Zimmer just say move back and let the enviormental problems just lay there? Somebody better get on her!!!!!!!! Sorry to knot your tail Dawn! More money! More lawyers! More taxes! Oh yeah more layoffs! Going forward should a municipal worker become ill, boy you staring down the face of a major law suit!

[/quote]

judy law
Member
judy law

are you SO SO sure! Why don’t you call the NJDEP before you respond![quote comment=”197783″]The city is most likely one of the pollutants with their garaged cars and what not. The mess is an environment problem when the property is being sold and has to be cleaned up for the next tenant. In this case, the city is moving back on it’s own property.[/quote]

whineanddineinhob
Member
whineanddineinhob

Listen ms attitude. I didn’t say I was SO SO sure. It didn’t have to be cleaned up while they originally occupied it, so why when they returned. One thing I am SO SO sure of is that with your attitude you can Kiss my A$$. And if you don’t like responses then don’t post a question.
[quote comment=”197793″]are you SO SO sure! Why don’t you call the NJDEP before you respond!

[/quote]

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