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Newark Mayor Sharpe James has been locked in battle with the City Council over two city-owned properties. The council passed resolutions selling them, but the mayor won’t execute the contracts. So the council and a developer sued – and both won.

But this mayor had another card to play. Wearing his other hat – as state senator from Essex County – he sponsored a bill that would overturn the 1989 Appellate Division precedent that handed the council its victories.

James introduced the bill, S-967, within five days of losing appellate stay requests in both cases. The bill would be retroactive to Jan. 1, 2002, thus voiding both court orders. (In one case, his lawyer argued that the order should be stayed to give lawmakers time to adopt the bill.)

The bill wouldn’t help only James: It would change the balance of power in real estate sales and leases in 65 of the state’s larger municipalities.

The power at issue is deciding what city-owned land and buildings to sell or lease, when to sell, to whom, and on what conditions and price. The bill would affect every municipality that has a mayor-council form of government under the Faulkner Act of 1950 – including Hillside, part of James’ legislative district.

In a statement Friday, James called his measure “an anti-corruption bill” and said he received support from many mayors before introducing it.

Such legislation would be likely to attract some attention and debate. However, S-967 flew under the radar. The bill drew no reaction and James apparently told few legislators about his local battles and court losses. On March 1, it sailed through the Senate Committee on Community and Urban Affairs, 5-0, without a word of testimony. (And why not? The chairman is Sen. Ronald Rice, D-Essex, a deputy mayor of Newark and James ally. The vice chairman is James. A third member is Sen. Leonard Connors, R-Ocean, mayor of Surf City. And James’ co-sponsor, Sen. Glenn Cunningham, D-Hudson, doubles as mayor of Jersey City.)

One legislative source says the two Republicans on the committee had no idea the bill would overturn court orders and help James in his political skirmishes.

On March 22, S-967 breezed through the Senate, 38 to 0. No one spoke on the floor about the legislation, which is in the Assembly but still needs a sponsor.

The League of Municipalities was also caught napping. “I wasn’t aware of it until recently,” says executive director William Dressel Jr. The organization will take no position on the measure until its legislative committee meets.

Says another anonymous legislative source: “This is what Sharpe does. His Senate seat is used to strengthen himself as a mayor. You get information that seems innocuous. Who knows that he wants to piss off [Hector] Corchado?”

Corchado is the Newark North Ward councilman who introduced the November 2002 ordinance approving the sale of a building in his ward to the nonprofit organization La Casa de Don Pedro, for a nominal fee, to create the city’s first Puerto Rican cultural center. The sale is one of the two that James seeks to undo.

James Loses in Court

But while James is succeeding in Trenton, he continues to fail in court. On Friday, Essex County Superior Court Judge Carol Ferentz granted a motion by the City Council’s lawyer, James Savage, to appoint someone to sign the La Casa contract of sale and execute the deed on behalf of the recalcitrant mayor.

The judge noted wryly that neither James or his lawyers told the state Supreme Court about his bill when the mayor appealed to the justices to overturn the Appellate Division’s denial of a stay. The Supreme Court also denied the stay.

This week, Luanne Peterpaul, the lawyer for the developer who won the other court order requiring Newark to convey property, intends to ask Superior Court Judge Stephen Bernstein for a similar order replacing the mayor with someone who will finish the land deal.

Ferentz rejected three major arguments by the mayor’s lawyer. Angelo Genova, of Livingston’s Genova, Burns & Vernoia, insisted that the mayor’s duties in executing such contracts were discretionary. But Ferentz said she had ruled on that point and, based on the law and case law, she had no choice because the council has the exclusive power to initiate and negotiate real estate transactions.

Second, Genova argued that even if Ferentz’s Dec. 5 order is enforceable, she should hold the council’s motion in abeyance “for a reasonable period of time due to pending legislation that, if enacted, would compel reversal of the order and a rescission of the conveyance directed by the order.” He pleaded for “judicial efficiency and economy.”

The judge responded, “This court’s interest is not in weighing political problems or resolutions, but is in enforcing its orders.” Besides, she added, who knows how long, if ever, it would take for the bill to pass the Assembly and be signed by the governor?

Savage told the court he expects a vigorous fight in the Assembly, where Newark Councilman Donald Tucker is the speaker pro tempore. He said further that on April 21 the City Council unanimously passed a resolution saying it “strongly opposes” the bill, a copy of which was sent to the League of Municipalities.

Third, Genova argued that the council’s November 2002 ordinance conveying the building to La Casa was conditioned on the nonprofit satisfying the terms of sale within a year, including architectural plans, financing and rehabilitation permits.

“Stop right there,” Ferentz said. “Why would anyone invest resources, time and money in a project” not knowing whether title could be gained to the property?

Ferentz also had problems with the retroactive portion of James’ bill. “Heaven knows how many other transactions would be overturned . . . statewide,” if it was adopted.

In his brief in support of the motion to have the court name another person to execute the sale, Savage wrote, “Mayor James fails to understand that the City of Newark is not his personal fiefdom” and that he cannot ignore the council’s ordinances and court orders.

Savage, of Newark’s Scarpone, Staiano & Savage, succeeded in convincing Ferentz that replacing the mayor in the transaction makes more sense than holding him in contempt or jailing him. Savage recommended Peterpaul, of Springfield’s Peterpaul, Clark & Corcoran, because of her familiarity with the issues. But Peterpaul declined because of the possibility of an appearance of a conflict with her role as the mayor’s adversary in the other case.

The statute in question is the Local Lands and Building Law, N.J.S.A. 40A:12-1, which states that sales of city-owned parcels are done only through resolutions and ordinances.

In 1989, Newark’s City Council sued James over the same issue when he refused to execute a land deal passed by the council. The trial court ruled for the mayor but in Council of the City of Newark v. James, 232 N.J. Super. 449, the Appellate Division reversed, finding that “the Local Lands and Building Law explicitly assigns to the Council the entire function of selling city-owned real property . . . It is therefore unnecessary to decide whether that function or any part of it is administrative or legislative.”

Appellate Division Judge Warren Brody wrote in the case, “The mayor cannot adopt a resolution or ordinance. Only the council can act in that manner.” So, where the general law requires that a function be performed by resolution or ordinance, “it necessarily assigns that function to the council, not the mayor.”

Genova, the mayor’s lawyer, and Newark solo Alan Bowman (the city’s lawyer in the other case), argued that under the Faulkner Act conveyance of city property is an administrative function carried out by the executive branch under the mayor-council form of government.

But Bernstein and Ferentz rejected that claim, citing the clear language of the 1989 case, saying the local land law controls.

In arguing before Ferentz last Dec. 5, Celia Bosco of Genova, Burns took the position that the Appellate Division got it wrong 15 years ago. Ferentz said, “Ms. Bosco, let me give you a little tip that . . . sometimes papers suggest to a court how strong or weak counsel may . . . feel about their case. When the Appellate Division has decided something, albeit it’s wrong, you don’t then say to a trial judge who, even if I disagree with that, that it was wrong and I should rule differently.”

In the case before Bernstein, would-be developer John Zidziunas won planning board approval in September 2000 and ordinance approval in December 2000. But after completion of work on the site, a brownfields location near Newark Airport, and after a June 2001 resolution authorizing the sale for $450,000, the mayor had second thoughts.

His administration persuaded the council to rescind the resolution, even though the contract had been prepared. But he council again passed the resolution in September 2001, only to have James’s city corporation counsel, Joanne Watson, sit on the papers in both transactions.

Asked, through a spokeswoman, why he changed his mind on the issue after living with the case law for 15 years, and why he blocked these deals, James issued a statement on Friday from Brazil, where he is on official business.

“It does not take an Einstein to know that no municipality should give away $8 million worth of municipal property, located one block from the airport, free, because of a political payoff.”

Zidziunas fumed at the remark, saying he has spent more than $100,000 in preparatory work. He added, “The mayor gave me the green light on the project, and his office designated me the developer.” He had a potential lease with Hertz Rental to use the site after it was remediated for more than $1 million, which would have been an offset credit on the land’s price.

Noting that James has approved similar developments, where the developer’s cost is solely the rehabilitation of the property, Zidziunas added, “If he thinks there’s corruption, let him go to the federal prosecutor, but he won’t because it will come back to him.”

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