October 2000

Community Groups Submit Petitions for Referendum Vote on Millennium Tower's Tax Abatements

Vito Brunetti and Robert DuVal along with their supporters display referendum petitions they are ready to submit the City Clerk.

Let the voters of Jersey City decide. This is what leaders of a referendum petition drive say concerning a Jersey City ordinance granting tax abatements to the developers of the controversial Millennium Towers 41-story high-rise. On October 3, Bob DuVal, of the Sgt. Anthony Neigborhood Association and Vito Brunetti, of the Riverview Neighborhood Association submitted over 3,300 signatures to Robert Byrne, Jersey City's municipal clerk. 2,470 signatures, which represents 15% of the Jersey City votes cast in the last state assembly election, are required to put this issue on the ballot in a binding referendum.

In September, the Jersey City Municipal Council passed an ordinance granting a 20-year tax abatement to the developers of Millennium Towers. Instead of paying real estate taxes based on the assessed value of their property, the owners would make a payment in lieu of taxes to the City of Jersey City and would be relieved of any obligation to pay taxes to the school district or to the county government for this 20-year period. The petitioners claim that this abatement will mean the owners of this property will pay 45% of full real estate taxes, saving them tens of millions of dollars over then next two decades.

If the minimum number of required signatures are validated by the City Clerk, the City Council would then have an opportunity to rescind the ordinance granting the tax abatement to the Millennium Tower project. If the Council refuses to rescind, the City Clerk is then required within a 90-day period to place the issue on the ballot in the next election or a special election.

Last August, the Riverview Neighborhood Association and the Coalition for a Betterwaterfront filed suit against the City of Jersey City, its Planning Board and Redevelopment Agency, for granting approvals for the Millennium Tower project. At the same time the City of Hoboken filed a similar suit against Jersey City. The 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. 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.

Opponents of the project have also questioned why Mayor Schundler and the City of Jersey City are providing such lucrative favors to developers with such a questionable track record. 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.

The principals of United Diversified are not real estate developers. Michael Galella and Joseph Zingale are in the beauty supply business. Galella is registered as the owner of Beauty Bizz, First Beauty, Inc., J & M Beauty Supplies and Jon Michael's Beauty Supply, Inc. All of these companies, except for First Beauty, are registered at 534 Broadway in Bayonne. Zingale owns New York City Beauty Supplies, Inc. in Passaic, New Jersey. In the back alley, behind 534 Broadway, is the entrance for United Diversified, LLC.

United Diversified, through Joseph M. Lucarelli and his son Lance, have completed one 5-unit building and are finishing two others, also comprised of five units each, in Hoboken. These projects are located at 107, 208 and 210 Jackson Street, down the street from a large public housing complex. They have also just begun another small residential project of about 11 units in Bayonne under the corporate name of Waterfront Homes, LLC. In a prospectus submitted to the Jersey City Housing Authority (JCRA), United Diversified claims that Joseph M. Lucarelli has been involved in various other developments including industrial complexes, mausoleums, hospitals, educational facilities and residential projects, but no locations or dates are given for these projects.

Prior to gaining approvals from the City of Jersey City, United Diversified failed to pay real estate taxes on their property, accruing an outstanding tax bill of over $1 million. Payment was finally made after the City Council threatened to withhold approval of the amendments to the redevelopment plan that increased the allowable building height from 110 feet to 440.