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Council Rejects Idea Of Binding Arbitration On Controversial Project

Myrna K. Bearse

Speaking through its attorney, Borough Council has rejected a proposal by Concerned Citizens of Princeton to put before binding arbitration the question of whether the Borough should build its planned $13.5 million downtown development complex.

At last Tuesday night's Council meeting, Concerned Citizens' James Firestone read a prepared statement asking the Borough to pursue binding arbitration in this matter through a method called Alternative Dispute Resolution (ADR). Under this, both sides would agree to accept the final decision of the arbitrators, assuming a mediated resolution is not reached.

Concerned Citizens, a group of Princeton residents opposed to the redevelopment project, failed in Superior Court to have the project halted. It has since filed an appeal, with a decision expected early next year. By that time – in fact, by the end of 2003 – the Borough and its development partner, Nassau HKT Associates, expect the 500-space garage to be open for business.

Mr. Firestone, who is also a candidate for Borough Council in November, stated, "Submitting the lawsuit to ADR will not only save the Borough continuing legal expenses and eliminate the threat of a negative appellate division decision, but it will dramatize that both the Borough and Concerned Citizens have the best interests of the public at heart."

At the Council meeting, Borough Attorney Michael Herbert cautioned Council members not to respond to the Concerned Citizens' proposal because the matter is under litigation. Council went into closed session at the end of the meeting to discuss its response.

On Friday, Mr. Herbert announced that Council regarded the appearance by representatives of Concerned Citizens [Herbert Hobler introduced Mr. Firestone] as more of a public relations ploy than anything else.

"The case is over as far as we're concerned," he said. We had a full proceeding in trial court and we won there. There were two separate efforts by Concerned Citizens to overturn the trial court's decision on motions. One was summary disposition and one was to stay the bond sale. Both were unsuccessful."

The attorney also said that one can't delegate to arbitration a responsibility vested in the courts, and that the Borough has contractual commitments with Nassau HKT which would be violated through an arbitration process. "We obviously respect the views of Concerned Citizens, but their offer is not to be taken seriously and not accepted," he said.

The complex that Concerned Citizens is attempting to block consists of a 500-space garage, currently under construction, a public plaza, and two five-story apartment buildings with street-floor retail space. They will rise on the two Borough-owned parking lots on either side of Spring Street.

In a related action, Borough administrator Robert Bruschi reported that the $13.5 million in bonds needed to finance the redevelopment project were sold at 4.3 percent interest. He said original estimates were 4.75 percent, and that the lower interest rate will enable the Borough to save about $250,000 over the long term. The development complex bonds were part of a $27,567,000 bond issue that also included more than $13 million in general improvement bonds. Moody's Investor Service recently downgraded the Borough's bond rating from Aa1 to Aa2, something Mr. Bruschi said he did not think affected the interest rate. He said the downgrading resulted from Moody's position that the Borough should have more surplus on hand. "In lieu of having surplus, we've used that money to reduce taxes," said Mr. Bruschi. "Moody's believes we should be relying more on tax increases and thus building our surplus. This is not the path we've chosen."

He does not anticipate a change in the Borough's philosophy of using surplus to reduce tax increases, but feels there might be a happy medium of building surplus without putting additional burdens on the taxpayer. "We're stuck between a rock and a hard place," said Mr. Bruschi. "We try to keep taxes down and draw upon reserves and surplus to mitigate big tax raises.