- The Washington Times - Monday, June 7, 2010

HOBOKEN, N.J. | With a rooftop pool and 24-hour concierge service, the new luxury condominiums off Frank Sinatra Drive here seem an unlikely spot in need of a multimillion-dollar federal giveaway.

Yet U.S. taxpayers doled out at least $8 million on a public walkway and park space in front of the Maxwell Place development here overlooking the New York City skyline - an amenity the development touts alongside its entertainment lounge, rooftop hot tub and theater screening room.

But the decision to use tax dollars to fund the walkway project was made after private developers had already agreed in 2003 to pay for it - indeed, it was a key condition for getting the project off the ground, according to public records and interviews.

Still, under the so-called earmarking process, by which Capitol Hill lawmakers slip requests for pet projects into larger spending bills, Sens. Frank R. Lautenberg and Robert Menendez, New Jersey Democrats, later pushed for millions of dollars in federal funding for the project.

In the swamp of federal earmark funding, $8 million isn’t a lot. But critics say the project is emblematic of why the earmark process so enrages many taxpayers.

Mr. Lautenberg and Mr. Menendez combined have received approximately $100,000 in campaign donations from executives of past and current developers of the Hoboken project and their employees over the years, federal election records show.

What’s more, the developers’ lobbyist, whose firm reaped more than $200,000 in lobbying fees, was a longtime senior aide to Mr. Menendez, who was a member of the House when the lawmakers secured funding for the project in 2005.

Neither Mr. Menendez nor Mr. Lautenberg said the donations influenced their decisions. They also said they were unaware that the developer had already agreed to spend millions of its own dollars to complete the walkway.

The public walkway and park were dedicated by city officials last year, and developers, on top of the money from the federal government, separately paid out millions of dollars for the project. But questions persist. Watchdog groups, while noting there was nothing illegal about earmarking federal funds for the project, question the push for taxpayer money if developers already were obligated to foot the bill.

“If it already was going to be done by the private sector, why would we swoop in and pick up the majority of the costs?” said Steve Ellis, vice president of Taxpayers for Common Sense. “That same $8 million could have been used on other worthwhile projects.”

But aides said the lawmakers sought the money because the city asked for it.

“The agreement with the private entity was made by the city and the decision to press for a federal investment was made by the city, with the state’s support,” Menendez spokesman Afshin Mohamadi said. “It would seem to me that questions about how that process came about should be asked at the local level.”

Mr. Lautenberg’s office agreed: “At the request of the City of Hoboken, Sen. Lautenberg and his colleagues requested funding for this walkway and improvements to the waterfront because of its great benefit to the community, allowing residents of the area to enjoy the river and a unique open space in an urban environment,” said Lautenberg spokesman Caley Gray.

Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said congressional offices probably didn’t give as much scrutiny to a request made by a city as they would have if a private company had been asking for the money directly.

The development has changed hands over the years, but the earmark ultimately benefited a subsidiary of Toll Brothers, a publicly traded company that calls itself the nation’s leading builder of luxury homes. The push for public funding began before Toll Brothers owned the site.

“Toll Brothers doesn’t need the money,” Ms. Sloan said. “I don’t know why anyone would be covering that cost. The question is: How did it happen and why?”

‘Sole cost and expense’

Hoboken’s planning board approved the project in March 2003, leaving no doubt in a resolution that the more than 800-unit luxury development had to include access to the Hudson River with a public park and walkway, city records show.

Within weeks of the approval, Hoboken Mayor Dave Roberts wrote to Mr. Menendez asking for federal funding, but made no mention of any involvement by private developers, according to a copy of the letter obtained by The Washington Times.

“This project will construct the final section of North Sinatra Drive and create a single scenic roadway/pedestrian promenade along the entire length of Hoboken’s historic Hudson River waterfront area,” Mr. Roberts wrote.

Mr. Roberts, reached by phone, initially agreed to discuss the project, noting that it recently won a “smart growth” award from a New Jersey advocacy group. Asked about his role in securing federal funding, Mr. Roberts said he would have to research the issue and did not return repeated phone messages.

Within months of Mr. Roberts’ letter, the mayor also signed an agreement with developers to eventually transfer the park and walkway portion of the project to the city. Under terms of that agreement, the developer would - “at its sole cost and expense” - construct a public access walkway and build a waterfront park, records show.

Still, the agreement did nothing to keep the federal earmark from sailing through Congress as Hoboken officials pushed for funding. In a standard appropriations request, later reviewed by Mr. Menendez’s office, officials stated “no” to a question asking whether the project had already received any other sources of funding.

While Congress was poised to set aside money for the walkway, PT Maxwell, a developer of the Maxwell project, hired a lobbying firm in September 2004 that employed Michael Hutton, a longtime congressional aide and former chief of staff to Mr. Menendez.

Mr. Hutton and other lobbyists at Bockorny Petrizzo Inc. contacted the House and Senate on federal transportation funding, among other issues. The firm was paid more than $300,000 in lobbying fees.

Mr. Hutton did not return phone and e-mail messages seeking comment, while an aide in Mr. Menendez’s office said the former staffer’s lobbying doesn’t change the fact that the congressional office wasn’t apprised of the developer’s agreement to build the walkway.

When Mr. Hutton left Bockorny Petrizzo and started his own lobbying firm, PT Maxwell switched from Bockorny Petrizzo to Mr. Hutton’s new firm, Hutton Strategies, which received more than $200,000 in lobbying fees from early 2007 until the relationship ended in June 2008.

Political support

The name of the Maxwell Place development - where one-bedroom condos start at nearly $500,000 and town homes at $1.7 million - pays homage to the old coffee factory that occupied the property for a half-century.

As early as 1999, city officials said, they would try to push for grant funding, according to one of the earlier developers of the Maxwell site, Daniel Gans. He said it made sense to secure public funds for the walkway because projects up and down the Hudson riverfront also had received taxpayer funding.

Although there was no guarantee in writing that public funds would help pay for the walkway, he said, “we went forward with the expectation that the city was going to do what it could do. The whole idea was to create open space.”

Mr. Gans defended the federal expenditures, saying the project set aside more open space than any other private developer in the city. He said the federal money helped with urban revitalization and open-space preservation on the waterfront.

Both Mr. Gans and a partner in a development company involved in the Maxwell project, Hoboken Brownstone, have contributed more than $45,000 in political donations to Mr. Menendez’s campaigns over the years, and $16,000 to Mr. Lautenberg, election records show.

Mr. Gans said the donations played no role in the lawmakers’ help in securing the federal funding.

“It wasn’t as if Bob Menendez came in and said, ‘What can I do for you guys?’ It was initiated by the city,” he said. “This didn’t come about through our support of them.”

Mr. Gans said he has supported both Mr. Lautenberg and Mr. Menendez for years, before and after their work securing funds for the Sinatra walkway project.

Both lawmakers also have received significant contributions from Toll Brothers employees and executives, records show. They’ve given Mr. Menendez’s campaigns at least $23,700 in contributions and another $15,400 to Mr. Lautenberg.

Leslie Paige, a spokeswoman for Citizens Against Government Waste, said the flow of contributions from developers to the politicians involved gives the appearance of “back-scratching.”

“It looks like another one of these examples of payoffs to friends and political allies using taxpayer money,” she said.

Subsequent developers, along with aides to Mr. Menendez and Mr. Lautenberg, also said the donations played no role in the lawmakers’ work to secure the earmarks.

“We do not comment on specific political contributions made by individual directors or employees other than to say that such contributions were in compliance with federal election rules,” Toll Brothers spokeswoman Christine Sciarrotta wrote in an e-mail to The Times.

Ms. Sciarrotta called the project a “successful public-private partnership” that resulted in a “beautiful public park and walkway along the Hoboken waterfront.”

“We understand the city of Hoboken sought funding as early as 1999,” she said. “Funding for these types of projects often takes many years to secure.”

“This was a cooperative effort between PT Maxwell, the city of Hoboken and the New Jersey Department of Transportation,” Ms. Sciarrotta wrote. “For their part, PT Maxwell donated five acres of waterfront property to the City of Hoboken, and expended significant sums beyond the federal grant in cleaning up and improving the public park/walkway.”

While PT Maxwell is now a wholly owned subsidiary of Toll Brothers, according to Securities and Exchange Commission filings, it was described in a 2006 article in New York Construction, a trade publication, as a joint venture between Toll Brothers and New Jersey-based developer Pinnacle Downtown.

Spending millions

In early December 2007, the Hoboken City Council met to approve what might have seemed like a formality: spending millions of dollars in federal funds for the Sinatra walkway.

At the meeting, Peter Cammarano, then a council member who had worked as an attorney on Mr. Menendez’s 2006 Senate campaign, said the federal funds came about when “Sen. Lautenberg and congressman Menendez put an earmark into a piece of federal legislation that was the [Department of Transportation] bill. … The grant money was then available to the city to subsequently put in an application.”

Cammarano, who later became mayor, resigned from office last year just weeks after he was sworn into office and after his arrest on corruption charges. He has pleaded guilty and is awaiting sentencing.

By contrast, former Hoboken community development officer Fred Bado said in a phone interview that the city applied for the money first, then Congress came through with the funds. He said the city sought federal money because project developers had agreed to transfer the land to the city.

“Because it was going to be a public park, they asked if we would apply for public money to help with the development of that park, and the city agreed to attempt to do that,” he said.

He also suggested work on one section of the project to rehabilitate a pier on the waterfront might not have been as extensive without the federal money. Still, despite the absence of any city tax dollars involved, several council members voted against awarding the federally funded construction contracts.

One council member, quoted in a Jersey Journal newspaper article covering the meeting, said, “We could have taken the stance, ‘Hey, you were relieved of an obligation and you should try to ingratiate yourself to the community and making a contribution elsewhere.”

• Jim McElhatton can be reached at jmcelhatton@washingtontimes.com.

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