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Court Finds Against LumberYard Petitioners

The community group had its day in court, but Judge John T. Kelley disagreed with their arguments.

The final word may have been spoken on petitioners’ requests to halt the redevelopment action at the LumberYard site.

In state Superior Court in Camden on Monday, Judge John T. Kelley rejected legal arguments that the borough ordinances regarding the project should be subject to a ballot question.

Collingswood had sought a declaratory judgment in the case to hopefully curtail additional legal wrangling on the question.

“While I certainly can understand the concerns the petitioners have, there is a narrow issue before the court: whether these are subject to referendum," Kelley told plaintiffs Joseph Dinella, Robert Gittler and Nathalie Marquet.

The petitioners offered a variety of arguments in their challenge to the proposal, from a broad invocation of the state constitution (“all power is inherent in the people”) to case law hinging on the Faulkner and Walsh Acts (which describe rights of referendum in municipal government) to the argument that the borough government “did not educate the public that the redevelopment was not subject to remonstrance.”

“The New York-New Jersey statute where we have based our remonstrance states that we can’t question an ordinance except where other requirements are made by law,” Marquet said. “Normally exception ordinances are carved out.”

“It’s a burden on the taxpayer,” said Gittler.

Kelley said that under those challenges, the existing case law is principally the same: Local governments as elected have the right to issue ordinances that govern the people who elected them.

“At the end of the day, [the LumberYard] is a project that was adopted through the appropriate ordinances by the government of Collingswood,” Kelley said. He urged the petitioners and the interested parties they represent to make their changes “at the ballot box.

“It’s not the role of this court to go beyond the legal validity of these processes,” Kelley said.

Upon hearing news of the decision, Collingswood Mayor James Maley said that borough leadership hopes that this verdict “brings this chapter to an end.

“We’re glad that the judge agreed that it’s not permitted by state law,” Maley said. “It’s what we said since the moment it was raised at the meeting.”

Maley said that although the court found in favor of the borough, addressing the challenge still cost Collingswood money; exactly how much, he couldn’t say offhand.

Regardless, he said he is hopeful that today’s judgment will mark the end of further challenges to the redevelopment project.

“As I understand, [the petitioners] don’t disagree with our legal position; they just think the Constitution should allow it,” Maley said.

Calls to Dinella and Gittler seeking comment were not immediately returned Monday afternoon.

Bob G-man October 01, 2012 at 08:44 PM
On Behalf of the Petitioners: Today’s ruling was predicated on a narrow, technical application of New Jersey redevelopment law. It also largely hinged on the non-substantive difference between “incurring of indebtedness” and the forswearing of municipal and school tax revenue for an entire generation. It is a shame and travesty of democracy that New Jersey residents cannot submit for referendum ordinances that nonetheless impact the fiscal health of their community and certainly their tax bills. The “real world” fact remains, however, that giving a 25-year PILOT to the proposed Lumberyard apartments shifts tax burden to existing taxpayers, rather than provide much-needed relief from real estate taxes. If nothing else, a solid tax base – rather than giveaways to favored builders – is needed to address the $35.1 million borough debt (2011 - both figures from NJ Department of Community Affairs), which has skyrocketed from only $3.9 million in 2005. The decision by the Borough to pursue this matter in court rather than allow citizen input likewise shows a level of disdain for taxpayer interests as represented by the petitioners and the over 400 citizens/voters who signed the petitions. The Petitioners look forward to the day when local government is held accountable and fiscal decisions that do not involve continual giveaways and/or shifting tax burdens are rendered in the Borough of Collingswood. Robert E. Gittler
Dave D October 02, 2012 at 12:53 PM
Mr. Gittler, from what I've read, the project will produce approximately $180,000 per year in new revenue to the borough through the PILOTs. The project currently produces ZERO revenue. So, your argument that this is hurting taxpayers is misplaced, at best, if not duplicitous. The borough isn't issuing any new debt to facilitate the apartment project and the new revenue will allow the borough to pay down existing debt incurred in earlier phases of the Lumberyard. So, if you are going to argue that this is a corruption of democracy, at least provide the full story.
Patch User October 02, 2012 at 01:03 PM
Put together a campaign in the next election.
Jasomm October 02, 2012 at 01:07 PM
It is appalling that the borough would stoop to so low as to ask an impartial body's to confirm their course of action. It is every American's right to grandstand against progress - and every municipality's duty, to not only build that grand stand, but to cover it in red carpet. And furthermore... derp.
Joseph Forrest October 02, 2012 at 03:11 PM
@Dave D. - As someone who has worked in Philadelphia and Camden, I (unfortunately) have too much experience with this PILOT tax nonsense. Philadelphia is a rare example of a REAL tax abatement. In the glory days of Philadelphia redevelopment, homeowners and developers would pay little or NO taxes for upwards of ten years. Soon after the development boom, Philadelphia then became the poster child for "why tax abatements aren't a bright idea, long term". Camden City over the past 10-15 years has become the poster child for PILOT (Payment in lieu of taxes) payments. Hospitals and other entities that otherwise would pay hundreds of thousands - if not millions - in taxes, could now broker a deal with the local government to pay a FRACTION of their true tax burden. These PILOTS were supposedly giving small businesses a chance to grow and thrive. Unfortunately these tax breaks were not going to the local pizza shops or residents, but instead they were going to rich hospitals, big time developers, and other politically connected people. Lastly - chew on this little factoid: Ingerman's tax burden for 100 apartments and their new sprawling office will amount to the combined tax burden of 20 Collingswood homeowners! If you think that is FAIR and LOGICAL...then you're delusional. Why are Collingswood residents so damn complacent and/or apathetic!?
Jack S October 02, 2012 at 05:22 PM
The Lumberyard project should never have been implemented in the first place. The sky-high vacancies and otherwise abject failure of the project is testimony to that fact. Yet many of the same politicians who championed the white elephant are still running Collingswood. And now an activist judge -- based on a "technicality" and not objectivity or realism -- decides against the voting public. If it were easy to vote politicians out of office, the judge's parsing of the law would not be an issue. However, with politicians such as those in Collingwood who are part of cronyistic Camden County machine that has had a stranglehold on our area for 3 decades+, voting out politicians is easier said than done. A referendum, on the other hand, would have permitted voters to address an issue head-on. Unfortunately this judge is willing to ingore the value of a referendum because, with his taxpayer-funded salary and guaranteed job, he has the luxury of deciding based on dubious technicalities rather than on the realities that confront taxpayers.
Matt Skoufalos (Editor) October 02, 2012 at 06:04 PM
Jack, I don't have a vested interest in this from the perspective of a borough taxpayer, but I think that in a declaratory judgment, the court is asked to consider the function of the existing statutes and apply them. To couch it in your terms, it would more accurately be an instance of "judicial activism" if the judge ruled against the existing statute and found in favor of the plaintiffs on a First Amendment basis, for example; in fact, his remarks were all geared toward how the legal precedent here is heavily in favor of the borough. (Full disclosure: I think "activist judge" is crummy piece of jargon for anyone to use because there's a lot of implicit assumptions. Pet peeve.) Now, we can have conversations for days about the philosophical aspects of the project, of which there are many angles, several of which you and other commenters raised above. Just got hung up on the one.
Dave D October 02, 2012 at 06:39 PM
Mr. Forrest, with all due respect, you know not of what you speak. Both Lourdes and Cooper are nonprofit organizations. They are not required to pay real estate taxes under New Jersey law. They contribute nothing to Camden's tax base. (Although one or the other of them may have agreed to voluntarily pay some sort of PILOT to Camden to appease local complaints that these institutions are a drain on the municipal coffers). One of Camden's fundamental problems is that more than 50% of its land is owned by tax-exempt organizations or government entities that are not required to pay taxes. Comparing Collingswood's situation to that of Camden or Philadelphia is like comparing jawbreakers to flags (if you don't get the reference, see the Diane Sawyer article elsewhere in Patch).
Will McGowan October 02, 2012 at 06:44 PM
While I agree on most of these point and have no dog in this fight, I think the answer is obvious...VOTE OUT MALEY AND THE CREW. As much as people get angry over taxes and the direction of the town, we have no viable candidates out there to change it. So Maley, Joan Leonard and everyone else just cross their ankles on their desks and smoke some high end cigars knowing their positions are secure. Until that happens, the direction and tone of the town is wherever they think it should go. As my answer to liquor in town from Mayor Maley once was " I don't think that's a good idea..."
Jack S October 02, 2012 at 08:44 PM
Matt, I'm not impressed by the judge's default to 'precedent.' I've rarely read a judicial opinion that does not claim to be based on the weight of precedent. Everyone knows that a large number of opinions go on to be reversed in whole or in part, permanently or temporarily, as was effectively the case today in PA with regard to their voter ID law. Certainly we can argue over what constitutes 'judicial activism,' but my view remains that a judge who interprets statute too rigidly is as culpable of being an activist as a judge who interprets statute too loosely. The bottom line is that the judge's decision prevents local residents from voting on further manifestations of a project that has by all objective accounts been a major fiscal disaster for the Borough and which places at risk more and more taxpayer money with each passing day. I truly question that the NJ Legislature intended that result, notwithstanding the judge's selective citation of precedent.
Matt Skoufalos (Editor) October 02, 2012 at 08:56 PM
I hear what you're saying, Jack; I just got the sense from being in the room that the judge was of no mind to buck several more traditional interpretations of precedent; hence his comments to change things via vote-em-out or legislation. Again, we can argue over the reliance upon precedent, but the challenges were really based on a much looser interpretation of case law that would have called upon foundational legislative principles as the basis of redress here. Had it been something like a civil rights issue or something in which people were being dispossessed or displaced by the construction, maybe those challenges would have overruled the weight of the statute. I grant that the scope and nature of this project has changed since its outset and that that is troubling to many people. I just don't think it's a landmark type of case, and for that reason, Kelley didn't seem interested in staking his rep on it.
Bob G-man October 03, 2012 at 02:13 AM
Dave D Thank you for chiming in. You have fallen prey to a false choice, a logical fallacy that involves a situation in which only two alternatives are presented, when in fact there is at least one if not many additional options. Dollars to donuts that is what was presented to the current Lumberyard residents (for whom I have great sympathy, as does everyone in town). But the false choice is to say, “either build this, in this form, or nothing will happen there” with the implicit “ever” tacked on the end. I think it’s more than a stretch to say nothing would ever be built on a prime piece of land in the center of Collingwood. In the short run – a year, two perhaps, I think you are probably right that the land would not be developed and produce any revenue. Of course, that reflects the market realities – which then contradicts all the rosy predictions (another issue for another posting). The salient point here is that at a point of improving market conditions something could and would be built. This would occur with either no tax abatement or at least one that is in the realm of reasonability and what is done in most other places – 5 years, or 10 at the most (I believe current Collingswood policy allows for 3 years generally) .
Bob G-man October 03, 2012 at 02:16 AM
continued Here we have a situation where a child as yet unborn would still be subsidizing this project when they are in their 20’s. Talk about making future generations pay. I actually worked a bit with the abatement program in Philadelphia and am familiar with the pros and cons – but even there it is only 10 years. A huge number of the 435 petitioners suggested that the land, instead of letting sit as an eyesore (and whose fault is that?) should be improved as a public amenity e.g. perhaps a simple park, until market conditions improve. This is known as land banking, and it is widely practiced. And at least then it would provide a short- and mid-term benefit for all residents. You should also be aware of the magnitude of the differential – over 25 years the cumulative difference between what 104 PILOT units (the original, comprehensive number, it may have changed slightly) will pay, and what they would pay based upon current tax for an existing 1br unit at the Lumberyard is in excess of $12 million (for the sake of argument, take a couple years off of that to account for earlier construction, we’re still talking many millions of dollars no matter what assumptions you put in –unless the apartments are very low quality indeed). None these funds will be available for schools, by the way, for 25 years – so we have to make up the difference. So, in the end – yes – we are still subsidizing this project, just the same as if debt had been incurred.
Collingswoodnative October 03, 2012 at 01:24 PM
Vote Libertarian and vote OUT the Gang of Three. Now all we need are three compinent people to run for office.
Will McGowan October 03, 2012 at 06:19 PM
If put to a vote, I BET..HANDS DOWN, anyone would vote for an option like land banking...a park, benches, statue...gathering spot, etc. over putting up apartments with a 25 year hold on taxes. YES that eyesore needs to be attended to but does it have to be done this way? Was "land banking an option? Could we as the subsidized tax payers get a say? This fight is only over if you let it end.
Lester G November 01, 2012 at 03:02 PM
It's time for those three to go. One for being the top perpetrator and the other two for following along. That town needs a viable opposition candidate with name recognition who has been active in the community. By the way, heard from a neighbor that the power is out at the LY and won't be back on until next week sometime. Transformer blew at the site. New construction and they don't have power. Go figure.

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