North Arlington files against Cherokee
"EnCap owes us money and we want it"
Attorneys for the borough have filed a counter claim against the Cherokee corporation, developers of the controversial Encap project, claiming that the company is in breach of contract for failing to make $3 million in payments to the borough and failure to demonstrate that they have secured financing for their project. The borough also filed a claim for damages for lost tax revenue caused by Cherokee’s breach of contract.
The legal action, filed in the Superior Court of Bergen County charges that Cherokee has failed to negotiate in good faith with the borough to acquire properties in the borough’s meadowlands redevelopment area and failed to secure funding for their proposed 1,625-unit housing project. According to the agreement that Cherokee signed with the previous administration of Mayor Russ Pitman, the company was required to make $2 million payment to the borough on December 31, 2006 and another $1 million on March 31, 2007.
The borough's attorneys are demanding a judgment that will release the $2 million, which was deposited with the court, and for damages caused to community by failing to make payments according to the agreement. The amended complaint charges that Cherokee acted in bad faith for the purpose of forestalling its obligations to advance the borough the $3 million that is owed to North Arlington.
"Cherokee has put a tremendous burden on the public officials and most importantly on the taxpayers of North Arlington," said Robert McGowan, the special attorney hired by the borough to fight the EnCap project. "Because of EnCap, the borough faces severe financial problems that will not go away overnight. We are asking the court to intervene and force EnCap to live up to its obligations."
Mayor Peter Massa sent a letter to Cherokee in late March declaring that the company's agreement with the borough was void because of Cherokee's failure to live up to the agreement. Massa is opposed to the EnCap housing project and the use of eminent domain against the properties on Porete Avenue.
"EnCap owes us money and we want it," says Massa. "Our taxpayers should not have to suffer because of their ill-conceived, under funded, development scam."
