Home Debt How an N.J. town’s redevelopment plan turned into metal trailers and a mountain of debt

How an N.J. town’s redevelopment plan turned into metal trailers and a mountain of debt

by admin

In Caldwell, there were high hopes back in 2021 when the borough council adopted an ambitious downtown redevelopment plan to build a new municipal complex and create more parking for the small businesses and restaurants along Bloomfield Avenue.

Led by then mayor John Kelley, Caldwell hoped to capitalize on low interest during the coronavirus pandemic and replace its antiquated borough hall and give downtown businesses a boost. To do it, the town took on about $41 million in new bonded debt – a borrow now, pay later strategy that pushed the Essex County borough of 9,000 residents to its debt limit allowed by the state.

Approved without a public referendum, the combined bond ordinances set aside about $16 million to retire old debt. After fees, that left about $23 million for the redevelopment project, according to borough officials – seemingly enough to build a state-of-the-art municipal building and add parking spaces downtown.

Pushed to its debt ceiling, Caldwell had little wiggle room if something went wrong. And a lot did.

Three years later, a good chunk of the $23 million set aside for the project has been spent, and almost nothing has been built. The old borough hall and the public library have been closed and replaced by trailers, with the police station, municipal court, borough offices and public library all crammed into metal sheds in a parking lot of Smull Avenue.

The Caldwell Community Center, which was supposed to be renovated and reopened so its programs could begin generating revenue, has been gutted but the restoration isn’t complete. Nearby, the town’s historic Carnegie library, devastated by Hurricane Ida in 2021, is also empty and may be demolished.

A fence now surrounds the Caldwell Public Library and much of the books are now in storage. A temporary library is set up in trailer behind Smull Avenue.

The project stalled when a proposed land swap with the First Presbyterian Church fell through due to Green Acres restrictions. Former councilman Jonathan Lace said he found out the land swap wasn’t possible after contacting the New Jersey Department of Environmental Protection, which oversees the Green Acres program.

The mixup sent the project back to the drawing board. The architects on the projects ultimately produced three designs, all of which were rejected by the Caldwell Council last August. The council then severed ties with Cozzarelli Cirmineillo, after paying the firm $1.2 million in fees, according to borough officials. The firm did not respond to a request for comment.

Unable to borrow more money, Caldwell officials are looking for another architect to produce a scaled-down version of the project, but a big chunk of the $23 million has already been spent.

“We have $14 million left. Maybe,” said Paul Alonso, a councilman who took office in 2023.

“We’re maxed out on our credit card, so we can’t borrow anything. We’re stuck.”

Alonso said the council is awaiting the results of a forensic audit to trace where all the money went. But besides the architect’s fee, the town spent $1.8 million renovating the senior citizens center, and approximately $1 million to buy three properties on Smull Avenue to convert them into parking.

Kelley left office as mayor at the end of 2022, then left town and moved to Texas, according to borough officials. His part-time business administrator, Thomas Banker, left Caldwell at the end of 2022 when his contract wasn’t renewed.

Reached by phone, Banker said Caldwell was a town that was resistant to change. “I’ve never heard a rational explanation as for why they didn’t like the plan, other than they just didn’t like it,” he said. “I think in Caldwell, there’s a whole segment of society that is resistant to change. People would talk about things in Caldwell that just weren’t there anymore.”

Others disagree. Former councilman Jonathan Lace consistently voted against the project. He said the process was flawed from the very start, when the Caldwell council voted against holding a public referendum on the bonding ordinances.

“In my opinion the process the borough followed regarding a new municipal complex was absolutely horrendous and bore no resemblance to the principles of good government,” he said.

Kelley’s replacement as mayor, Garrett Jones, held a town hall meeting in July to explain the dire straits the town was in. The acting borough administrator at the time, Thomas Tucci, delivered the bad news, telling the residents the usual way that government bails out – taking on more debt – is unlikely to be an option.

“What does this mean? It means the borough cannot borrow one dollar more unless it petitions the Local Finance Board and shows a hardship,” he said. Caldwell is due to begin pay off the 30-year bonds this year, he said. An initial $600,000 debt service payment is due in 2024, which will cost the average taxpayer $149, he said.

Caldwell Borough Hall was closed more than a year ago. A new borough hall is supposed to be built, but despite, the redevelopment plan has stalled due to lack of funds.

It will be up Jones, now in his second year, and the council, to find a way to jumpstart the project. Jones did not respond to repeated phone calls seeking comment.

But at least for the foreseeable future, Caldwell’s seat of government will be a set of trailers in the municipal parking lot on Smull Avenue. Those trailer rentals cost taxpayers about $15,000 a month plus another $5,000 for storage, which includes about 90% of the library collection.

“For now, we’ll have to make do with what we have,” Alonso said.

To cut some of its losses, Caldwell is auctioning one of the three properties on Smull Avenue it bought to expand parking. The borough bought the two-story house at 22 Smull Avenue, in 2022 for $575,000 and is now looking to unload it through the online auction site GovDeals.com. Bidding ends on Feb. 6.

The house is occupied by a dentist on the first floor, Dr. F. Stephen Bauer and a 91-year-old woman who lives upstairs. Bauer used to own the property, but said he agreed to sell it to the borough because he felt powerless to stop the redevelopment plan.

After the sale, Bauer and the resident upstairs signed a lease with the town that allows them to stay in the property until early 2025. Bauer said he’s been told the lease applies to whoever buys the place.

“I’ve been here for 44 years and the lady upstairs (has) lived here for 55 years,” Bauer said. “We come with the property. But this isn’t good for my business. My patients come in and want to know, ‘how long are you going to be here?’”

Our journalism needs your support. Please subscribe today to NJ.com.

Richard Cowen may be reached at [email protected].

You may also like

Leave a Comment