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NJMP Millville First Press Release
January 12, 2010
The Agreements
The City Commission entered into four agreements with the New Jersey Motorsports Park (NJMP): A General Development Plan (GDP); the 2004 Municipal Development Agreement (MDA 04), the amended Municipal Development Agreement (MDA 06) and a Financial Agreement (FA 07). Plus the City gave NJMP a $600,000, no interest, 15 year loan. NJMP also submitted a Project Description (PD), which contains additional representations relied upon by the City when granting approvals and generous subsidies.

Preliminary Consideration
The first issue before the City is not how to change the terms of MDA 06, but whether to change it. To decide that question the City must evaluate what benefit the City has received, whether the NJMP has fulfilled its promises, met the City’s expectations and what the consequences have been for the City and its residents.

In the existing agreements the City conceded everything the NJMP wanted, including a motocross track. The NJMP can build it tomorrow without any action from the City. That would be a good solution because the residents would appreciate the City not moving a noise maker significantly closer to their homes and the NJMP has its approval to build its track. It would also result in the City receiving $1million (200 acres x $5k per acre) and the creation of many more jobs than if the relocation is allowed.

All of the public arguments in favor of the change are irrelevant. NJMP has its approval for an ATV track. Providing a place to ride ATV’s in the State is not the City’s obligation. The State has plans to build three ATV tracks. The assertion that the change will mean jobs for Local 825 is misleading because a track on cleared ground with no infrastructure required can be built with one bulldozer in less than a week. If NJMP is made to comply with the original plan, significant construction work will be required including a sound wall. Construction workers will be better served. The suggestion that there will be no increase in noise is ridiculous. The motocross track will run more hours, days, weeks, and months destroying the few quiet weekends of the current schedule and ramping up the nuisance quotient of the track.

Counsel for NJMP said the reason for the requested change was the precarious financial position of the NJMP. NJMP knew the project would lose money for three years at least according to MDA 04 pg 12 & MDA 06 pg 9. Bailing out the NJMP, beyond the enormous subsidies and benefits already bestowed upon it by the City, is way beyond the ability of Millville’s taxpayers. However, if the City considers amending the MDA again it must verify NJMP’s financial status, demand proof that this concession, to the detriment of the community, will in fact mean financial success enabling NJMP to meet its obligations including paying the City $1 million for the remaining land and paying the full PILOT of $350,000 a year.

I
If the City decides to amend the MDA, it must be reviewed article by article to correct its deficiencies and insure substantial benefit to the entire community. The amendments to MDA 04 failed to address those deficiencies.

Collateral Damage
The legal challenges must be taken into account. In addition to the suit by Track Racket, an Ordinance adopting an amended MDA 06 is subject to a petition drive, costly election and possible invalidation (NJSA 40:74-5). Additionally, there is an existing Superior Court Order that applies to the ATV track that, if enforced, destroys the NJMP’s economic argument. The Stipulation and Consent Judgment in The Citizens United lawsuit (par 3) calls for a sound attenuation wall for the ATV track. If the City amends its agreements it must insure that NJMP does not renege on that promise by arguing that this is a different ATV track.
Bottom line: Just say no and the matter is closed.

The 1500 Job Claim
Job creation claims have been grossly exaggerated. NJMP reported to the UEZ that it employed 22 people full time in 2009 and failed to tell how many of those few are from Millville, or even Cumberland County. The economic benefit to the region is minimal and the prediction that the track was going to be the salvation of the Arts District is just one more broken promise. How “putting Millville on the map” has improved residents’ quality of life requires some explanation.

The PILOT
The taxes on $50 million worth of improvements to date should be $1.5 million based on a $3.08 tax rate. The taxes on the completed $100 million complex would be $3 million. On $150 million $4.5 million. The Payment In Lieu Of Taxes (PILOT), if the statute were followed, would be $1 million a year now and $2 or $3 million a year when complete (2% of cost of improvements). The City agreed to a PILOT of $175,000 a year fixed for 15 years from date of completion because “that’s what NJMP said it could afford”.

The Financial Agreement adopted by Ordinance April 3, 2007

The PILOT is for 15 years from “substantial completion”. The difficulty is “substantial completion” is undefined so we don’t know how long the tax abatement will continue. MDA 04 and MDA 06 provided for the City to be paid $350,000 a year, but without explanation it was reduced to $175,000 in the FA 07. The PILOT may increase up to $350,000 upon an annual evaluation in accordance with a formula not set forth in the agreement. The total $350,000 cannot be charged “until all non-commercial elements of the Project are completed”. All 3 Phases may never be built and the City has no remedy. These inconsistencies, ambiguities and clauses subject to interpretation must be cleared up if the City considers amending the GDP, MDA 06, and FA 07 to the detriment of the neighboring homeowners and the community at large.

II
The Municipal Development Agreement adopted by Ordinance June 15, 2004 amended by Ordinance October 31, 2006
The NJMP failed to meet the deadlines of MDA 04. MDA 06 granted all of NJMP’s requests with no quid pro quo to the City cf Ex D. Unfortunately for the City, but to the benefit of the NJMP, any time tables are subject to “market demand and feasibility”, which means there are no time limits. The City has no enforcement power, not even the power to regain ownership of the land it sold at a loss, in event of non performance. The NJMP developers were careful to point out that economic benefit to the public would not occur until phases II & III were complete. However, the City is powerless to insure that NJMP will proceed with phases II & III that are supposed to provide the jobs and economic benefit. The developer will incur no consequence if it does not perform, but will keep the tax free land it bought cheap. The concessions and benefits granted NJMP are huge. The protections and guarantees for the City are non existent.

The Land Sale
The City agreed to sell NJMP 707 acres of land and granted a 5 year option for an additional 50 acres for $5,000 an acre all with sewer and water (installed by the City at no cost to NJMP). Shortly thereafter the City passed a resolution fixing the price for city owned land @ $40,000 an acre. Settlement on 500 acres took place January 28, 2007. Out of the proceeds, the City paid thousands to the FAA for a release of the NJMP land. The 200 remaining acres were supposed to be purchased “no later than June 1 2009” MDA 04, but that was postponed to April 15, 2015 MDA 06 Article 5 D. No provision is made for a remedy if they do not perform. NJMP paid nothing for the delay or for the option on the additional 50 acres. In addition the City contributed 100 acres of land to the settlement of the lawsuit between Citizens United and NJMP. Furthermore, the City undertook the multi million dollar environmental cleanup of the site contrary to Article 6 E of MDA 04. The shift of responsibility from NJMP to the City was made by MDA 06.

Who will own the ATV course ?
While news accounts are vague, it seems the ATV track will be built and operated by a Clayton Keeler. The City has no arrangement with Keeler. MDA 06 provides “NJMP will not lease sell or transfer title to that phase of the Project without written consent Millville” Article 9 F “NJMP shall not directly, or indirectly assign any of its rights or obligations….with respect to the property and/or the project to any third party w/o prior written consent of Millville” Article 12 A.

Notes & Questions
Mayor Shannon & Commissioner Derella, negotiators for the City, said the NJMP dictated that the PILOT would be $175,000. Commission Meeting April 7, 2009

MDA 04 and MDA 06 fix the PILOT @ $350,000. NJMP presently pays $175,000. What is being done by whom to “determine on an annual basis what the PILOT should be as elements are completed?

State is on the verge of building three ATV tracks. AC Press 1/10/10.
III
Several time limits are governed by the phrase “substantial completion”. What does that mean and what are the dates? Is it from substantial completion of Phase I, or II, or III, or all 3 and who decides what is substantial completion? What is that date? FA pg 1, par. 4.

When does the clock start on the 15 year duration of the PILOT?

The only amount mentioned in MDA 06 is $350,000 a year Article 6 K 1. However, the PILOT is $175,000. Why and based on what formula? When does the City get the full $350,000 a year?

What does FA 07 Article 4 say?

When does the 5 year option on the additional 50 acres expire?

Has the City received verification of the fulfillment of the many representations made by NJMP?

If the Commissioners decide to give in to the NJMP again, they must protect the people of Millville and not agree to whatever the track wants.

The most important question remains: What has the track done for the people of Millville?

If MDA 06 is amended, prior to submission to the Planning Board. the City must also amend the GDP Article 4

Attachments

Exhibit A Pages 3 & 4 of MDA 06

Exhibit B Development Schedule from MDA 06

Exhibit C Comparison of MDA 04 and MDA 06

IV

MDA 04 called for completion of Phase I by March 15, 2006 and the entire project by 2009. Art I
MDA 06 has no time limits.

MDA 04 calls for a college preparatory school in Phase III.
MDA 06 omits that facility

MDA 04 had a deadline of June I, 2005 for first land purchase and balance by June 1, 2009
MDA 06 extended those dates to April 2008 and April 2015 respectively

MDA 04 made it the responsibility of NJMP to do the environmental investigation Article IV E, and City’s responsibility was limited to $150,000 cf Real Estate agreement pg 4.
MDA 06 deleted those provisions and committed the City to do the study and remediation. City then spent 3 years worth of its State environmental funding on the NJMP and the surrounding City land. ($7 million?)

MDA 04 & 06 predict 3 years operating losses pg 12

MDA 04 Property taxes will be $350,000 pg 15
MDA 06 Property taxes will be $350,000, but provides for a rebate and adds confusing language about calculating the PILOT. Pp 11& 12

MDA 04 requires use of union labor.
MDA 06 that clause is omitted and the residential development is excluded from the prevailing wage laws. Pg 24

MDA 04 promises all 3 phases will be complete in 5 years and that all dates are important including the dates for the conveyances of the land pg 24
MDA 06 omits the deadlines but adds that the commercial elements will be eligible for 5 year abatements and timelines are omitted and “reasonable efforts” is substituted. Article 9.

EXHIBIT C

V