Edgewater officials accused of corruption by developer seeking to build on Hess site

EDGEWATER — A developer that aims to build on the site of a former Hess Corp. terminal on River Road is accusing borough officials of corruption in preventing the project from moving forward.

In a complaint filed in federal court on Wednesday, 615 River Road Partners says borough officials are keeping the developers from building on the site because of local developer Fred Daibes' influence, by using the tool of eminent domain and other means.

"Daibes and Edgewater have been engaged for decades in an unlawful conspiracy through which Daibes Entities and Edgewater municipal officials profit at the expense of lawfully competing real-estate developers, low-income residents, and the public trust," the complaint reads.

The complaint claims that numerous officials — including Mayor Michael McPartland and several current council and Zoning Board of Adjustment members — receive cash payments, employment in enterprises linked to Daibes, or other favors from Daibes-owned businesses, such as apartments for below-market rent.

In return, the complaint says, Daibes receives preferential treatment by the borough and its zoning board, with areas of the borough rezoned to allow for residential properties where they weren't permitted before.

McPartland and Daibes said the allegations of favors being exchanged were false. A statement from the mayor adds that the allegations against individual officials are "wrong and defamatory."

"This thing is full of lies, and this is a sad attempt to blackmail the town," Daibes said, adding that he was being used as a scapegoat.

"I've taken no cash payments," McPartland said. "I overwhelmingly deny any of those accusations."

In response to the allegations that he has given jobs or apartments to borough officials, Daibes said he is the largest apartment owner and employer, so it's a given that many people in the city will either work for him or live in one of his buildings.

"Edgewater's a small town," he said. "You can't be in Edgewater and not be affiliated with me."

According to the complaint, more than 90 percent of zoning relief to allow for high-density development since 2000 has benefited Daibes. The developer 615 River Road Partners said through its attorney that the complaint is accurate and based on documents in the public record and its own investigation.

In October, the borough adopted ordinances amending the zoning in areas of River Road and Old River Road to allow for mid- to high-rise developments with required affordable housing. The lots on River Road affected by the zoning change are owned by Daibes and include the Quanta Superfund site and surrounding properties near City Place.

On the Hess site, 615 River Road Partners wants to build a 1,873-unit mixed use complex with five residential towers and 60,000 square feet of retail, while the borough intends to use the 18.7-acre waterfront site for its Department of Public Works, a garage, a park and recreation space. According to the complaint, the borough is moving forward with its plans to seize the property because the high-rise development there would compete with Daibes' own properties.

The complaint says there are 7 acres of "blighted or underutilized" properties near the current DPW that can be used to expand, and that the developer's plan would add parks and waterfront access, and generate revenue for the borough.

"No town needs a multimillion-dollar view for its public works department; and no New Jersey mayor can credibly claim that his town does not need more tax revenue," Thom Ammirato, a spokesman for 615 River Road Partners, said Thursday.

Daibes said he's never gotten the kind of density on his properties that 615 River Road Partners is proposing. He added that he has no say in what the town does, but as an adjoining property owner, he's against it, and so is the rest of the town.

"The pulse of the town is that we're doing the right thing," McPartland said. "This complaint is yet another in a long list of actions brought about by 615 in an effort to force their development down the throats of the people of Edgewater."

Edgewater has seen its population double, to around 12,000, in the wake of a development boom in the past 20 years. 

The 615 River Road complex had been projected to generate $12.3 million in tax revenue and create 375 affordable-housing units.

McPartland said this year that such a development would destroy the borough and increase its population by 30 percent. The influx of new residents would clog roads, crowd schools and deprive residents of much-needed open space, he said. He added that the area is not zoned for the kind of project 615 River Road Partners wants to build.

Last year, a Superior Court judge dismissed a claim by the developer that it was entitled to automatic approval because of missed deadlines by the Edgewater zoning board. The borough argued that the proposal was incomplete.

The developer then submitted two new proposals mirroring the initial proposal, which have not yet been heard before the zoning board. McPartland said the borough set several dates for the proposals to come before the board, but 615 River Road Partners canceled each appearance.