MIDDLESEX, NJ–After over a decade of negotiation, remediation, and construction, “The Lofts” redevelopment project has completed its first phase, culminating in 78 residences along Lincoln Boulevard near the border between Middlesex Borough and Piscataway.
The site, which sat unused for decades, was the scene of a devastating chemical explosion that destroyed the ChemRay Company paint factory, as reported by the New York Times in 1985.
The largest construction project the borough has seen in 20 years, “The Lofts” development was a collaborative effort between the Middlesex County Improvement Authority (MCIA), CME Associates, the New Jersey Institute of Technology, and 150 Lincoln Boulevard Urban Renewal, LLC.
“This project is the successful result of smart cooperation between the New Jersey Department of Environmental Protection, the MCIA, the Borough of Middlesex and our development group,” said developer Massimo Pinelli, the owner of the LLC.
The redevelopment process began in 2006, when the parcel of land was designated by the borough as an area "in need of redevelopment," but the property itself had been in dire need of attention since long before then.
Due to the considerable cost of dealing with the environmental fallout from the 1985 explosion, developers had been hesitant to develop the property.
But the MCIA was able to secure a $200,000 "brownfields assessment" grant from the US Environmental Protection Agency (EPA).
While Pinelli's company was responsible for a portion of the expenses and the property acquisition, local and county officials looked to grants for additional funding for legal work, engineering, and construction.
The project “benefits all the residents of the Borough by bringing a long abandoned property back on the tax rolls and by giving us more resources to provide needed services throughout Middlesex” said Middlesex Borough Mayor Ronald DiMura.
According to an MCIA press release, the new developer will provide the borough with "up to $314,000 in additional tax revenue," as well as seven new permanent jobs. The project also created some 850 temporary construction jobs, according to the statement.
However, there is some question whether "The Lofts" will really benefit all residents, because, unlike most property owners in the borough, the owner of the new apartment complex will not pay full property taxes.
In 2014, the Borough Council and Mayor approved a long-term tax exemption for the developer, which means that the LLC will pay 12% of its revenue to the borough instead of traditional taxes, and it will also be unaffected by any increases in the tax rate for up to three decades.
Developers typically agree to set aside a certain percentage of the units in their new residential buildings as "affordable housing" in exchange for such an exemption.
Instead, in this case, the developer agreed to make a one-time payment of $100,000 to the Borough of Middlesex as documented in Ordinance #1860-14.
Also of concern is the dual role that State Senator Bob Smith played in making the development a reality.
Negotiations to develop apartments on the site materialized in 2011, the same year that Democrat Ronald Dobies won election as the borough's Mayor, with the help of some questionable political fundraising organizations allegedly run by Pinelli's legal representative: none other than State Senator Bob Smith.
After Dobies won election, Smith's law firm (Bob Smith & Associates) was hired to serve as the borough's official attorney as well as municipal prosecutor.
Pinelli, the President of Quantum Real Estate Group in New York City, also became active in donating to Senator Smith’s campaign around this time, contributing $2,000 in September of 2011.
The developer had previously contributed $2,000 to Senator Smith's campaign fund in 2004, as well as $2,500 to the Democratic Political Action Committee (PAC) that contributes to the campaigns of many county officials, such as Freeholder Director Ronald Rios.
Freeholder Director Rios was quoted in the MCIA press release about the project, saying, “Through this project, the MCIA and the County have fostered new relationships and partnerships, both in the community and on a federal level, while making substantial upgrades to the infrastructure along the Lincoln Boulevard corridor.”
This is not the first time that there has been concern over conflict of interest involving property development and Senator Smith, who represents Piscataway, New Brunswick, North Brunswick, Franklin, and Milltown in the State Senate.
In 2012, PolitickerNJ.com reported on numerous questionable conflicts between Smith's private clients and his role as an elected government official, including the situation in Middlesex Borough.
Governor Chris Christie was quoted in the article: “If anyone thinks Bob Smith is cleaning it up, Bob Smith is cleaning up with the money he is taking into his shadowy PAC's. He’s not cleaning anything up.”