Deficit expected due to Triangle lawsuits
Stahl seeks more cuts to defray expected $4M shortfall
BY VINCENT TODARO Staff Writer
East Brunswick is facing a financial shortfall that would amount to a 20- cent increase in the municipal tax rate this year.

The anticipated budget deficit is a result of the legal battle between East Brunswick and Toll Brothers, the builder that was to purchase and redevelop the Golden Triangle on Route 18. The two sides filed lawsuits against one another earlier this month.

Toll Brothers is asking that the court make the township purchase the land back and terminate the redevelopment agreement. The township is holding Toll Brothers in default of its contract and would pay a lower price to buy back the property, which it sold to Toll Brothers in 2004 for more than $30 million. Toll Brothers has been paying for the land in annual increments of $4.5 million, and still owes about $13 million, officials said.

The township was slated to receive payments of $4 million from the builder in both 2009 and 2010, money that the town cannot expect to receive at this point.

Toll Brothers — which was to build 402 residential units and more than 180,000 square feet of retail space, replacing the existing Sam's Club and other stores — asked in November that the township change the redevelopment plan by eliminating the residential component and increasing the amount of retail space. The request was the result of the economic downturn, particularly with regard to the residential housing market, Toll Brothers said, noting that the original plan was no longer economically viable.

Township officials said they wanted to negotiate with the developer regarding the changes, but that they were given inadequate time to review the amendments before the builder filed a letter of termination. The township responded with a notice of default.

According to Mayor David Stahl, the developer sought not only changes in the land use component of the plan, but it also wanted to delay the remaining payments until a number of contingencies were met. Toll Brothers wanted to wait until construction was complete and see the value of the final product before determining the remaining sum to be paid to East Brunswick, Stahl said.

Toll Brothers' attorney did not return a phone call from the Sentinel last week.

During Monday night's Township Council meeting, Stahl brought residents up to date on what has transpired with Toll Brothers. Resident Robert Lennon had asked during a previous meeting for an update on the legal matter, and Stahl said he would have a report by Monday's meeting.

Stahl said the township faces a municipal budget gap that amounts to 20 cents per $100 of assessed valuation on the tax rate, or $200 for a home assessed at $100,000, because East Brunswick cannot count on getting this year's payment from Toll Brothers. He said he is taking steps to create a budget that does not include the $4 million revenue item, but that anticipates a number of spending cuts.

Stahl said the township's newly created finance committee will meet March 6 to discuss the issue, and he planned to meet this week with all department heads. He planned to ask that they provide additional cuts in their respective budgets.

"We will work throughout the week and go to the department heads Friday to tell them what we expect," he said. Those managers will then be expected to come back with ways to achieve savings, as well as to explain the ramifications of such cuts, Stahl said.

It is too early to say what cuts may be made in order to trim the deficit, Stahl said.

"We will get more concrete ideas beginning Friday," he said.

After taking over as mayor in January, Stahl eliminated two municipal positions to bring savings of more than $200,000 per year. He also made changes to the legal department and the road-paving program in order to bring savings, among other cuts. Though he proposed a once-weekly trash pickup that would save the township nearly $2 million per year, objections to that plan may result in a compromise that yields fewer savings.

Stahl said there is nothing new to report regarding the lawsuits between the township and Toll Brothers. The next step is for the case to be assigned to a judge and the two complaints consolidated. The township last year replaced Frank Regan, its first redevelopment attorney, with Matthew Karrenberg of DeCotiis, Fitzpatrick, Cole & Wisler, Teaneck. He will receive assistance from other attorneys at the large law firm, Stahl said.

Stahl said he has not heard anything from Toll Brothers about the case or about possibly resuming negotiations. The future of the redevelopment project, he said, is now in the hands of the courts.