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Christie Dodges Questions About Sandy Funds Spent on Luxury Highrise in New Brunswick

"The Aspire" Received $4.8M in Sandy Relief Funds, Along With Over $60M in Government Loans, and Millions More in Tax Credits
The Aspire Poster
Someone wrote their own commentary alongside an ad for "The Aspire" a new luxury apartment building opening soon in NB. Boraie Development

NEW BRUNSWICK, NJ—Governor Chris Christie continues to avoid commenting directly on his administration's decision to spend a whopping $4.8 million in Sandy relief money to support the construction of a luxury highrise building on Somerset Street.

"We've built a lot of things with Sandy money and I don't know what you're talking about off the top of my head," Christie said in response to a question from New Brunswick Today, raising his voice over protesters.

Last year, NBC New York broke the story that city-based Boraie Development's highrise under construction was being built with $4.8 million in support from the government, specifically disaster relief funds meant to restore housing lost in Hurricane Sandy.

As it turns out, the developer was also receiving at least $60 million in government loans and more than $21 million in tax credits.

The building is expected to open to tenants soon.  Because the Sandy spending was just under $5 million, the project narrowly avoided a requirement to have oversight from an "integrity monitor."

The allocation of the Sandy money to the highrise, situated in a neighborhood where the Hurricane's impact was minimal, despite the developer's track record for failing to keep its promises to state and local governments, struck a chord with the public.

New Brunswick Today's initial article on the Sandy spending in New Brunswick was one of our most popular of all-time, climbing to the front page of the social media network Reddit.

Eager to spend the federal money on replacing housing lost near the Jersey Shore, the Christie administration sought to distribute it to established developers with "shovel ready" projects in nine different counties.

Though some parts of Middlesex County were badly damaged in the storm, New Brunswick was far from the hardest-hit. Other areas of the state had much greater need for replacement housing, critics said.

The revelations about the Boraie building also came at a time when Christie was under fire for spending Sandy money on senior housing in Belleville, another town that was not badly damaged by the storm.  Its Democratic Mayor had crossed party lines to support Christie's re-election.

Christie was also criticized for the spending on the Boraie project because basketball player and real estate developer Shaquille O'Neal, who often works with Boraie, endorsed him for re-election in 2013. 

The development at 135 Somerset Street had already been approved by the city's Planning Board even before Hurricane Sandy struck, and Boraie had already pledged to make 20% of its 238 rental units "affordable" to low and moderate income households in order to secure a city tax abatement.

It was the first of 33 projects to break ground in the first round of awards were made in the state's Fund for Restoration of Multi-family Housing (FRM) program.

In the first round, five of the 33 FRM projects were in Middlesex County, and they received a total of $22.5 million.

But after widespread negative publicity following the Belleville and New Brunswick spending, Middlesex County was nowhere to be found in a subsequent list of 18 FRM additional projects approved in 2014. All but three of the second round projects were located in Atlantic, Ocean, or Monmouth Counties.

Even more troubling was the record of the developer when it comes to affordable housing

New Brunswick Today revealed that the administrations of each of the last four Governors re-negotiated a $15 million loan agreement for a previous Boraie Development project in New Brunswick, after the company failed to deliver on a promise to include affordable housing in a luxury condominimum highrise called One Spring Street. 

Our reporting also forced a spokesperson for the state's Department of Community Affairs to admit to errors in a press release that touted the developer's experience with affordable housing.

The developer has consistently refused to answer questions about the new 16-story building currently being advertised as "The Aspire," with an opening date of "Spring 2015."

Officials at the Department of Community Affairs and the Governor's Office also have not responded to email and phone inquiries about the building.

But many members of the public remember the Sandy spending, and the controversy that ensued.

An advertisement for the building at the city's train station now includes an annotation in marker explaining that the building was "Built with $5 million of Sandy relief money."

In March 2014, more than a dozen protesters disrupted a Christie event in South River, calling him out for the New Brunswick Sandy spending.

"We demand you stop your corrupt uses of Hurricane Sandy money," the group shouted in unison.  

"There are still families without homes who have recevied no aid, and yet Boraie Development is receiving millions to build luxury apartments in New Brunswick," they continued, as they were escorted from the room by State Police.

On May 2, NBToday asked Omar Boraie, the owner of the development firm, whether or not any victims of Hurricane Sandy will be living in the building.

He did not answer, instead saying "Have a nice day," and driving away in his car, which had been illegally parked just over a block from the site of the new building.

Boraie's firm has grown from a small real estate company into a major redeveloper with projects underway in Newark and Atlantic City as well as the Hub City.

Sam Boraie, a Vice President at the development company, has not responded to multiple questions about when the project will open and if there will be any victims of the storm living in the building.

The Sandy money story was one of a trio of damaging developments that befell the administration of Governor Christie in January 2014, including the politically-motivated closures of lanes leading to the George Washington Bridge.

The common thread between all three scandals was David Samson, a former Attorney General who Christie made the powerful Chairman of the Port Authority of New York and New Jersey.

That scandal resulted in indictments against two officials and forced out at least five members of Christie's inner circle, including Samson, whose law firm was also involved in the financing of a Boraie project in Newark.

In another scandal exposed in the weeks after Christie's office was first tied to "Bridgegate," the accusations sounded like the inverse of the New Brunswick Sandy money story.

In that case, the Mayor of Hoboken, one of the hardest hit cities in the state, said Christie's Lt. Governor Kim Guadagno had threatened to withhold Sandy relief money unless the Mayor unless she fast-tracked a development project represented by Samson's firm.

Meanwhile, in New Brunswick, a town that did not suffer from flooding or wind damage as badly as Hoboken did, the Sandy money flowed quickly, and to a developer with close ties to Mayor James Cahill and US Senator Cory Booker.

Samson's firm served as bond counsel for part of the Newark project's financing, having been selected by the developer from among almost two dozens firms eligible to serve as bond counsel to the state's Economic Development Agency. 

Like Samson's law firm, which removed the embattled partner's last name as part of a re-branding last month, the building that received the Hurricane Sandy money also underwent a recent name change.

Wolff & Samson officially became "Chiesa Shahinian & Giantomasi" last month, named for another Christie ally, former US Senator Jeff Chiesa.

Boraie Development did not explain why the building's name was changed, but at some point last year the decision was made to switch to "The Aspire."

Originally called "Somerset Mews," Mayor Cahill mentioned the project in his January 2015 State of the City address: "Somerset Mews near Easton Avenue is nearing completion, bringing online another Boraie Development project with 238 residential units, 20 percent of which are designated as affordable housing, and 10,000 square feet of retail space."

But by the time the speech was published in print, the only change was that "Somerset Mews" was replaced with "The Aspire."

Officials at the Planning Department guessed that the name change may have been the result of another development with the same name in a nearby town, and that "mews," a term that usually is associated with garden apartments, really wasn't a good name for a highrise building.

"The Mayor does not have any new comment on the Boraie building at this time," said Cahill's spokesperson following a request for comment on the allocation of Sandy funds.

Cahill works with Boraie Development in his capacity as the attorney for the Milltown Ford Avenue Redevelopment Agency, which has selected the firm to be the designated redeveloper of an old factory.

But others in city and state government have spoken against the Sandy money going to the Somerset Street project.

"I am 100% supportive of affordable housing, but I do have a challenge when it's at the expense of the Superstorm Sandy victims," Rebecca Escobar, then-President of the New Brunswick City Council, said in response to a question from NBToday.

"Every dollar from the storm needs to be spent on things that are affected," said State Senate President Steve Sweeney when asked about the Boraie project. "Yeah, there's issues... The money should have gone for worthy projects."

However, Christie has thus far claimed not to know the particulars of the project, not unlike his explanations for other alleged scandals.

"First of all, I don't make those decisions, but I'm sure that they were justified by what was happening with Sandy relief money and what the rules were," Christie began his response to this reporter at the April 27 event.

It was the second time the Governor claimed not to know about the Boraie building and its scandalous funding source.

On the second anniversary of Hurricane Sandy, this reporter asked Christie if he stood by his administration's decision to give the $4.8 million to Boraie.

"I don't know the decision you're talking about," Christie said.  "I don't know what you're talking about so I can't give an answer."