A Hudson County jury has awarded $8.15 million, $6.5 million more than the state’s last offer, to owners of property condemned for the abandoned Hudson River rail tunnel project.
The Oct. 12 verdict came after the owners presented evidence of the sale of seven comparable, residential properties nearby in the trial before Superior Court Judge Lourdes Santiago.
The award, in New Jersey Transit v. Mary Franco and Carol Franco, HUD-L-6300-09, is the latest expense for the project Gov. Chris Christie canceled in a cost-cutting move.
At issue was a 1.89-acre site, 65 percent of which is in Hoboken, 25 percent in Union City and 10 percent in Weehawken. The site can be accessed, by vehicle only, from 18th Street in Weehawken and was used as a service garage and storage lot for buses.
Condemnation was instituted on Dec. 15, 2009. The tunnel’s proponents said additional rail capacity was sorely needed and noted that the federal government and the Port Authority of New York and New Jersey were picking up most of the $8.7 billion cost.
But Christie called off the project in October 2010, saying cost overruns would have overburdened the state’s finances. The federal government then sought to make New Jersey pay the $271 million that had been spent on the project, but the state settled that obligation for $95 million.
Mary and Carol Franco, owners of the 1.89-acre tract at issue in the litigation, argued that existing zoning would allow construction of 126 housing units.
The surrounding area, with views of the Manhattan skyline, was historically an industrial zone but has been experiencing a recent boom in residential development, says the owners’ attorney, Paul Fernicola, who heads a firm in Red Bank.
Although the owners had no immediate plans to develop the site, to prepare for trial they commissioned detailed architectural renderings showing a hypothetical conversion of the property into a residential development.
The plans showed a 13-story, 54-unit building on the Union City portion of the site; a four-story, 72-unit building on the Hoboken portion; and an access road through the Weehawken portion. The development depicted in the renderings is allowed under existing zoning.
New Jersey Transit initially valued the property at $934,500, based on its continued use as an industrial site. But the owners rejected that offer, maintaining that the site’s value was $9.27 million.
Then, in late 2011, the agency conceded that the site would likely have been converted to residential use if it were not condemned for the tunnel project. But the agency said the site would only accommodate 35 housing units, Fernicola says.
New Jersey Transit also claimed that Weehawken officials would likely oppose development of the large residential buildings in the other two towns, since high-rise developments are not allowed under zoning of its portion of the parcel, says Fernicola.
But the owners took the position that Weehawken’s jurisdiction was limited to determining whether the access road met state standards, Fernicola says.
New Jersey Transit “argued that Weehawken had the authority to block the buildings on the Union City portion and the Hoboken portion of the property. We argued no, Weehawken had limited jurisdiction to review if the cul-de-sac met state standards,” says Fernicola.
New Jersey Transit’s lawyer in the case, George Frino of DeCotiis, FitzPatrick & Cole in Teaneck, says, “we believe the verdict is the result of a series of erroneous pretrial rulings and evidentiary rulings that constitute reversible error.” He declines to elaborate.
A New Jersey Transit spokesman, John Durso Jr., says only that the agency was reviewing the verdict. •