August 2000

City of Hoboken and Civic Groups Mount Legal Challenge to Millennium Towers Project

The City of Hoboken has filed suit against its neighboring municipality, the City of Jersey City, its Planning Board and Redevelopment Agency for approving the controversial $150 million, twin 43-story Millennium Towers project. Two civic organizations, the Coalition for a Better Waterfront and the Riverview Neighborhood Association, in a separate action, have also filed a complaint in opposition to the Millennium Towers development.

The two law suits charge that the City of Jersey City failed to provide testimony or studies that justified the amendments to the Jersey Avenue Redevelopment Plan that escalated building heights from 110 to 440 feet. Hoboken's complaint submitted to Superior Court by Attorney Hugh B. McCluskey claims the amendment "was adopted solely for the benefit and under the pressure of defendant Millennium Towers, LLC and United Diversified, LLC." The City of Hoboken also cited concerns about traffic that will be generated by this 551-unit project to be located less than 100 feet from the Hoboken border. Traffic from Millennium Towers would spill onto two of only three heavily used north-south thoroughfares, Grove Street and Jersey Avenue, that link Hoboken to Jersey City.

Joseph M. Lucarelli, vice president of operations for United Diversified, LLC, was convicted and sent to federal prison in 1995 for defrauding North Jersey Savings and Loan out of $16.3 million for a failed development project just a block from the Millennium Towers site. In 1989, Lucarelli through two of his companies, L.B.J. Management and Realty, Inc. and Joseph M. Lucarelli & Sons--Construction Division, Inc., defaulted on the mortgage and two construction loans which left that property at 689 Luis Marin Boulevard vacant and abandoned for the past ten years. Shortly after failing to reclaim these funds, North Jersey Savings and Loan was declared insolvent.

Disclosure statements submitted by United Diversified to the Jersey City Redevelopment Agency, however, failed to divulge Lucarelli's criminal past and multi-million dollar fraud schemes. According to the papers filed by the plaintiffs, this Agency also failed to properly scrutinize the track record of United Diversified. Since the principals of United Diversified have little experience as real estate developers, they sited Lucarelli's record as a developer to gain approvals. In addition to the bank fraud, Lucarelli also left a trail of debts totaling more than $385,000 owed to numerous contractors and building suppliers on the Luis Marin Boulevard building.

Despite the fact that the Mayor and Council were later advised of the developer's actual track record, they proceeded to amend the Jersey Avenue Redevelopment Plan on June 14, 2000 increasing the height limit four times the former standard of 110 feet and increasing the density permitted by 20%. On June 20, two weeks before the new ordinance was legally in effect, the Jersey City Planning Board approved the preliminary site plan application for Millennium Towers.

At the May 9, 2000 meeting, the Planning Board Chairman, Gerald Sheehan, contended that the amendments to the ordinance were not in response to any particular application. The complaint of the Coalition for a Better Waterfront and Riverview Neighborhood Association, however, points out that the development application for Millennium Towers was dated on February 9, 2000, over a month before the Planning Board first took up the issue of amending the redevelopment plan. The plaintiffs' complaint states, "the developer had shot an arrow, and the City then proceeded to draw a bulls-eye around the arrow."

Two municipal employees, Charles Tooke, on March 14 and Gerald Sheehan on May 9, chaired meetings of the Jersey City Planning Board that reviewed the amendments that benefited the Millennium Towers developers. According to the plaintiffs' complaint this violated the Municipal Land Use Law which prevents municipal employees from serving as chair or vice-chair of planning boards. It is the intent of the state law to prevent employees of a city, particularly in this instance where a project is being vigorously supported by the City administration, from acting in a manner that might be viewed as partisan.

The complaint of the civic groups also site a conflict on the part of Planning Board member Carmelo J. Sita, a building trades union official who is also an officer of the Hudson County Laborers Pension Realty Corporation. Sita voted to approve the project and spoke in its favor. The complaint asserts that he and his employer could both stand to benefit from this project and he should have recused himself. Union pension fund money may also be providing the financial backing to build the Millennium Tower project. At the May 9 Planning Board meeting and again at the June 14 Council meeting that approved the amendments, building trades union members and union officials packed the council chambers and boisterously backed the Millennium Towers project.

Recent civil court actions indicate that Joseph M. Lucarelli has again failed to pay bills for his construction projects. United Diversified has undertaken several small 5 unit projects on Jackson Street in Hoboken. There has already been a number of construction liens placed on the Jackson Street properties, two of which, totaling $34,655, are still unsatisfied. On May 18, 1999, Superior Court of New Jersey entered a judgment on behalf of Blue Circle Materials of Bayonne against United Diversified, Joseph M. Lucarelli and 208 Jackson Street, LLC for an unpaid bill of $35,687.