E.B.’s offer to buy back land goes unanswered

EAST BRUNSWICK — A recent attempt by the township to reacquire the Golden Triangle property from Toll Brothers and partially settle litigation with the developer has been rejected.

A state Superior Court judge on Jan. 22 denied the township’s motion for partial summary judgment, which included a $22.5 million offer to buy back the 32-acre property on Route 18. If approved, the motion would have expedited the return of the property to the township, and separated the repurchase from perceived contractual issues between both parties. Township officials hoped to resolve such disputes in an independent trial so that it could entertain other offers to buy and redevelop the Golden Triangle.

“Essentially we said, ‘We’ll pay what you’ve contributed thus far, but give us the title and we’ll litigate other issues at a different time,’ ” Mayor David Stahl said. “However, the court decided all issues will be decided upon in litigation together.”

In 2005 Toll Brothers agreed to buy the property, which the township had owned and leased to Sam’s Club and other businesses, for $35 million. The builder later received approval to build 402 residential units and more than 180,000 square feet of retail space, thus replacing the existing uses on the site.

Toll Brothers was required to make structured mortgage payments for the parcel each year, and had made five annual payments of $4.5 million for a total of $22.5 million before the agreement stalled.

The developer decided that the approved project was no longer viable due to economic and real estate market changes, and proposed major revisions to their site plan in November 2008. Among the adjustments were the elimination of the residential component and an expansion of the property’s commercial uses.

East Brunswick officials said at the time that they intended to negotiate with Toll Brothers, but as a precaution, the township adopted a $25 million bond ordinance that could be used to buy back the Golden Triangle if necessary. The negotiations did not come to fruition, however, and Tolls Brothers and the township both filed breach-of-contract lawsuits against each other.

Toll Brothers contends that the township’s unwillingness to comply with site plan adjustments is in violation of the 2005 agreement, and that they have the right to terminate the contract and require the township to repurchase the property with interest payment damages. The township claims Toll Brothers has not met the conditions that would allow for termination and has therefore defaulted.

Most recently, the township offered $22.5 million to the developer to repurchase the Golden Triangle, but Toll Brothers was reportedly unreceptive.

While township officials made a concerted effort to buy back the property and settle the other issues at a later date, the recent ruling by Superior Court Judge Diane Pincus solidified a trial process before land can be exchanged.

“We wanted to get the property back and said they could still litigate if they’d like,” said attorney Catharine Tamasik, who represents East Brunswick. “But now the litigation will proceed and we’ll soon be going through the discovery process.”

Stahl said the decision is detrimental in that it puts an additional economic burden on East Brunswick residents.

The mayor noted that other parties have expressed interest in the Golden Triangle, and that despite the state of the economy, these parties would be able to quickly move forward.

“Toll Brothers says that a residential site plan is not feasible in this economy, but they wouldn’t be officially developing for another two years. It’s impossible to know what the market would be like then,” Stahl said, citing a 2½-year extension that the township gave the builder. “But there are other real estate developers willing to find out.”

The mayor did not want to name the interested parties.

According to Stahl, the township will now be following the litigation process as well as engaging in negotiations.

“I think that there’s always a method where things can be resolved,” he said. “Simultaneous tracks are being pursued by litigators, and we have discussions planned with the developer [this] week.”

Toll Brothers’ attorney could not be reached for comment by the time of publication.

While Stahl is confident that the property will be returned to the township, other issues regarding the trial, such as potential interest payments to Toll Brothers, are unknown and could negatively affect East Brunswick finances.