Developers Allege Conspiracy to Thwart Waterfront Development in New Jersey

One of the last empty pieces of land on “New Jersey’s red-hot gold coast” is a former industrial site that was, until recently, owned by the Hess Corporation, and is now at the center of a federal lawsuit claiming “unlawful conspiracy.”

Ninety percent of high-density development rights in the long, skinny town of Edgewater is owned by Fred Daibes, but Daibes was outbid on the Hess property by a partnership of Maxal Group and EnviroFinance Group.

Maxal and EnviroFinance put together a project—in addition to luxury apartments it includes affordable housing, a park and esplanade, a bus stop and a ferry terminal— they believed would tempt the town into rezoning the land for residential development.

Instead, last July the town condemned the site and moved to claim it through eminent domain. Now the group that purchased the land has filed a federal lawsuit alleging, “that Edgewater, its mayor and other public officials blocked their proposal as part of a long-running conspiracy to benefit a rival hometown builder who controls much of the real estate development in town.”

High-density developments of luxury housing across the river from Manhattan are one cause of what is becoming a housing crisis in Northern New Jersey, but the lawsuit portrays an almost incestuous symbiotic relationship between a town’s largest real estate developer and its government officials:

“Four members of the borough council, the town’s zoning attorney and a building inspector obtained loans from a bank owned by Mr. Daibes, Mariner’s, according to the suit. And several officials have had business or family relationships with Mr. Daibes “that rendered them reliable supporters of Daibes’ development project,” the suit contends. Jeffrey Mathieu, a former vice president of a company owned by Mr. Daibes, is a member of Edgewater’s zoning board. And government officials routinely use Mr. Daibes’s restaurant, Le Jardin, for meetings and get free meals, alcohol and guest suites.”

For his part, Edgewater mayor Michael McPartland said the lawsuit is just an effort by Maxal Group and Envirofinance “to force their development down the throats of the people of Edgewater.”