News
A Look at EnCap
Supporters of the project promised to transform the Meadowlands'
garbage-strewn swamps and trash heaps into a thriving, golf-based
mini-city. What The Record found fell short of that potential.
Read
more about EnCap
Is EnCap project still viable?
Thursday, August 21, 2008
BY JOHN BRENNAN
Staff Writer
A financial expert hired by EnCap told a federal judge today
that it "wouldn't make economic sense" for EnCap or
any other company to build the Meadowlands golf and housing project
in its current form.
Perry Mandarino of Traxi - which provides advice to distressed companies - told U.S. Bankruptcy Judge Novalyn Winfield that the state of the economy, negative newspaper coverage about the landfills-to-links plan and the uncertain cost of the remaining cleanup led him to that conclusion.
"The original development deal is not practical," Mandarino said. "You can't market this [site] before cleanup. There's a lot of noise around the project that has made investors hesitant because, frankly, it's so messy."
THE STAKEHOLDERS These banks, insurance
companies and other businesses were among those represented
by legal counsel at the EnCap Chapter 11 bankruptcy hearing: |
Mandarino said a private developer couldn't make enough profit from only 2,580 housing units, a pair of golf courses and a hotel in Lyndhurst and Rutherford to justify the investment. He said alternatives that could work under the right circumstances include Donald Trump's vision of 20,000 residences; 5 million square feet of warehouses; or the state turning the landfills into a public park.
A component of the plan that would feature about 1,000 age-restricted housing units in Lyndhurst is an example of what Mandarino cited as impractical.
"Given the current market, a 55-plus community in Lyndhurst is not going to be a hot seller," Mandarino said. "People don't retire to Lyndhurst. They retire to other places."
Mandarino was bullish on the site's prospects, however, if there was a budget to complete the cleanup and spending sources were confirmed.
"Then you'd have a story to tell," Mandarino said. "There aren't many 100-acre sites for building within seven miles of such a major market. This is a special site."
Bob Ceberio, executive director of the state Meadowlands Commission, agreed.
"If these landfills are properly capped and contained - a process we are eager to have completed - the public and the environment are protected, and the potential for responsible development at this site is significant," Ceberio said.
The main topic of the hearing was a motion by Wachovia Bank - representing a bank group that has claims of $150 million against EnCap - to immediately cease the Chapter 11 bankruptcy process that was filed in May. Wachovia attorney Craig Murphy asked Mandarino how EnCap can claim to still be viable when it has no employees, has no agreements in place to reorganize its finances and has only $88,000 in funds.
EnCap attorney Michael Sirota pointed to a recent effort by Trump to gain the court's permission to file its own plan for the site - a maneuver that Sirota said demonstrates the site's viability.
Winfield said she would decide on Wachovia's motion in this "interesting case" next week.