JERSEY CITY-Peter Mocco, the developer of the huge Liberty Harbor complex in Jersey City has filed for Chapter 11 bankruptcy protection in what he tells GlobeSt.com is a strategic move to break up a court logjam over claims against the property so he can settle and move ahead with construction.
Jersey City Redevelopment Agency chief Robert Antonicello responded to the Tuesday bankruptcy filing with fire and fury, insisting that Mocco’s move is an an unconscionable blow to the city’s rebuilding effort and will have “tragic consequences” for unpaid contractors. Antonicello said numerous small construction businesses, architects and other operators listed as debtors in the bankruptcy filing will be “crushed” and some will never recover.
“This is not a failure of the Jersey City redevelopment market, which has over 1,000 new units under construction today, and will have 3,000 by the end of the year,” Antonicello tells GlobeSt. “It’s not the economy, which has caused other developers to go through very difficult times and navigate through with commitment and dignity.It is certainly not the fault of the many business operators who worked on this project, believed in it, and now, with this bankruptcy action, will not be ‘made whole’ for what they are owed."
Mocco replied: "We are in this pickle for only one reason: The JCRA handled the Kerrigan eminent domain case from soup to nuts." The Kerrigan family of Jersey City, whose Jersey Avenue property was seized by the city under its ‘eminent domain’ authority in 2004 to add to the sprawling, 28-block, 80-acre Liberty Harbor site, is owed the largest debt - $21 million - listed in the bankruptcy filing.
The Kerrigans sued the JCRA and won $18.1 million in a jury trial in compensation last year, with interest of $287 per day. The JCRA argues that its redevelopment agreement with Mocco explicitly makes him liable for the debt, and it has sued him in turn. Mocco says his attorneys are already trying to work out a settlement with the Kerrigans. But the parties were blocked from settling by a prior claim against Liberty Harbor filed back in 1999 by lawyer/broker James Licata, and still pending in Essex County Superior Court.
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Mocco says, “The sole reason we filed for Chapter 11 is that the bankruptcy court judge has the power to order the Licata case be settled so we can proceed to settle with the Kerrigans.”
Antonicello was not mollified by Mocco’s explanation: “What happens to the contractors in this scenario? Is he going to make them whole? This is really a tragic turn of circumstances for them.”
According to published reports, four contractors had sued Mocco’s companies for various amounts several years ago, and others said at the time they were continuing to work although paychecks had stopped coming. Those contractor debts were evidently folded into the Chapter 11 filing.
One high-profile creditor listed is the Miami architecture firm, Duany, Plater, Zyberk & Co., owed $11,274. The firm is nationally known for developing the “New Urbanism” neighborhood design that is the basis for Liberty Harbor’s layout on the five completed blocks of condominiums and rental apartments. Inglese Architects of East Rutherford is also owed $95,000. Another debt of $185,182 is owed to Brinkerhoff Environmental Services of Manasquan for remediation work at the site.
Mocco set up three companies to orchestrate the Liberty Harbor project, each of which filed for Chapter 11 protection. They are known as Liberty Harbor Holding, Liberty Harbor II Urban Renewal Co. and Liberty Harbor North.
Antonicello said every developer with a major project in Jersey City confronted dire straits during the economic recession and housing credit crisis. “Yet, others managed to find ways to survive and keep their projects going,” he said. “I would mention George Filopoulos at Metrovest Equities and his new equity partners and their work at The Beacon, for example.” The Beacon is another massive mixed-use housing complex created in the restored historic buildings of the former Jersey City Medical Center.
“What happened at Liberty Harbor simply did not have to happen,” said the redevelopment chief.
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