Nonvote kills Newark arena deal
09/07/01
BY DAVID KINNEY AND GEORGE E. JORDAN
STAR-LEDGER STAFF
Any hope that the Legislature would ink a Newark arena deal before the fall election vanished yesterday -- placing New Jersey in jeopardy of losing its professional basketball and hockey teams to another state.
The arena deal fell victim to a swift, sweeping change of sentiment after it became trapped in the vise of gubernatorial politics over the past month. With proposed legislation to finance the arena suddenly facing fierce opposition from every side, the Assembly Appropriations Committee abruptly canceled a vote on the bill yesterday.
While Assembly leaders insist that the deal is not dead -- yet -- they saw no likelihood of its passage before November.
YankeeNets, owner of the Nets basketball team and the Devils hockey team, wants to move the teams into the new arena by 2004, and fears that any further delays could postpone the arena's opening.
"Today's message to YankeeNets was, in effect, 'Find someplace else to do business.' We hear the message," said Len Coleman, chairman of Newark Sports and Entertainment, a division of YankeeNets overseeing the arena development. "The Legislature's inaction today brings into question not only New Jersey's interest and commitment to have the teams play in Newark, but the desire to keep two major league franchises in New Jersey."
Republicans and Democrats alike protested that legislative leaders loaded up the bill with millions of dollars in projects unrelated to the arena. That led Democratic gubernatorial candidate Jim McGreevey yesterday to come out against the bill he had backed for months. He vowed continued support for a Newark arena, but derided the latest version of the bill as a "pork fest" and "Trenton at its worst."
"What is there today is a $1 billion gorging of the public trough," he said.
GOP gubernatorial nominee Bret Schundler took credit yesterday for stopping the plan with a two-week blitz of advertising and public pronouncements. Despite supporters' insistence that the arena would finance itself, Schundler contends taxpayers could end up picking up some of the costs. He has insisted that any deal should be put to a voter referendum.
"Whereas the Democrats supported doing this deal with state taxpayers being on the hook -- and despite the obvious opposition of the public -- it was the Republican Assembly members who stood with me and said, 'That is not right,'" Schundler said.
He accused McGreevey of changing his mind in the face of political pressure: "He folded, pure and simple. It would be nice if leaders understood what's right without being pressured. We've tried to do the right thing simply because it's right."
McGreevey's new stand takes a volatile campaign issue away from Schundler, but Schundler's camp crowed that the Republican already scored a much-needed point over his opponent. McGreevey led by 19 percentage points in recent polls.
"I see this as an issue that will not die. This is going to put the campaign back on the issues Schundler wants to talk about," said Schundler backer Assemblyman Guy Gregg (R-Morris).
With his plan stalled, acting Gov. Donald DiFrancesco has little hope of sealing his legacy with the $355 million center in downtown Newark, unless it can get done in a lame-duck session before the new governor takes over.
"What started as an effort to address a very real and significant problem has apparently fallen victim to election-year politics and legislative parochialism," he said in a statement.
Yesterday's nonvote comes three years after Newark's boosters first proposed the idea to former Gov. Christie Whitman. She offered YankeeNets cash, loans and tax breaks on her last day before leaving office in January to head the Environmental Projection Agency. DiFrancesco killed Whitman's proposal on his first day in office, vowing to negotiate his own deal.
DiFrancesco's blueprint had YankeeNets spending $115 million and New Jersey issuing $190 million in bonds. The key to the deal was designating part of Newark as a "sports and entertainment district." Sales taxes collected in and around the arena would pay off the bonds.
Critics protested early on that taxpayers might be stuck with part of the tab if sales taxes did not cover the bonds. But the deal seemed to be cruising onward. After DiFrancesco announced a plan for how to turn the abandoned Meadowlands site into a Disney-style complex and added $300 million for Bergen County rail and road projects, the Senate passed it in June.
Assembly Speaker Jack Collins (R-Salem) added millions more for a host of South Jersey projects, including a Rowan University gymnasium ($20 million), a Camden County civic center ($20 million) and a rowing center ($1 million). Apparently thinking it had the votes to pass, he scheduled the Appropriations Committee meeting.
But by then, Schundler had turned it into a campaign issue in a fierce attack that surprised even fellow Republicans. With their party leader against it and polls showing voters opposed in many districts, Republicans on the committee were in a bind, and their support splintered.
Sources said the committee's chairman, Assemblyman Richard Bagger (R-Union), tried to have yesterday's meeting canceled, but Collins surprised his colleagues by declining.
As the lawmakers debated in private yesterday, the public meeting room filled with lobbyists and legislators. Forty-five minutes after the scheduled start time, an Assembly aide announced it would not happen. The late cancellation was unusual: Generally, the leadership makes sure it has the votes before scheduling a hearing.
Bagger said they put off the meeting over "a lot of unanswered questions," including concern that taxpayers could be stuck paying off the bonds.
And, said committee member Richard Merkt (R-Morris), "I don't think there was a lot of sentiment for dealing with this right in the middle of the election."
The nonvote hurts Newark boosters and major real estate investors banking on the arena. The plans triggered dozens of projects ranging from new restaurants and stores to apartment buildings and office towers.
Rodney Propp, principal in an investment group that paid $57 million last year for Three Gateway Center, an office tower overlooking the proposed arena site, said a failure to relocate the arena to Newark puts a damper on the downtown turnaround.
"There were people looking at new development who will have to go back to the drawing board and think twice, especially with the cooling economy," he said.
Philanthropist businessman Raymond Chambers, a driving force behind the YankeeNets merger and the proposed Newark arena, could not be reached for comment. But Barbara Bell-Coleman, who serves on the boards of Chambers-financed charities, said the collapse is personally "hurtful" to Chambers: "It's an outrage. Nobody cares about the cities or redevelopment of the cities, which is what this was really about."