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October 7, 2008

Property owner files suit againt Millstone, saying boro blocked development attempt

by MICHAEL DEAK
Staff Writer

MILLSTONE -A federal lawsuit filed this week charges the Borough Council and Planning Board with racketeering and violating the civil rights of a borough property owner frustrated with attempts to develop its property.

In a 37-page suit filed Monday, Oct. 6, in U.S. District Court, Trenton, Rezem Family Associates, the owner of 67 acres of property in the tiny borough with a population of about 400, alleges borough officials conspired to block development of its property bisected by Somerset Courthouse Road and Route 514.

Borough Attorney Stephen Offen said yesterday that it is not the borough's policy to comment on pending litigation. Offen also said he had not reviewed the entire suit.

"This is a really serious lawsuit," said Stuart Lieberman, attorney for the Rezem Family Associates. The group is a family that formed a partnership to oversee the property.

The property owner has been working with the borough for nearly a decade to reach an agreement on how the land could be developed or preserved for open space, but no solution has been reached, Lieberman said.

"We are alleging that various individuals have violated the federal civil rights and racketeering laws and we are alleging that they have deliberately worked with each other to frustrate my client's legitimate right to secure development approval for the property," Lieberman said.

Rezem Family Associates has received several lucrative offers from national corporations for the property, but has been unable to sell it, Lieberman said. Two of the offers were for $20 million and $17 million, according to the lawsuit.

"We simply cannot continue to bump our heads against the wall," said Tom Hitchcok of Rezem Family Associates.

According to the lawsuit, the property had been zoned for decades as "light industrial" and Rezem Family Associates had no interest in developing the property.

But in 1997 Somerset County constructed the Amwell Road bypass and Somerset Courthouse Road through the property, increasing its value by creating development opportunities.

But, the lawsuit alleges, borough officials "purposefully, and conspiratorially, lied, misled, and otherwise performed specific actions that adversely affected (Rezem Family Associates') property value."

The suit outlines the steps that Rezem Family Associates took to develop the property, starting in 1999 with a proposal to build a gas station at the bypass intersection.

In 2002, the suit states, John Madden, then the borough's planner, presented a map of the property indicating a "planned village development" calling for 250 single-family homes and condominiums, along with a commercial site and 28 acres of open recreation space. Rezem Family Associates supported the plan, but the Millstone Planning Board refused to support a zoning change, according to the lawsuit.

Also in 2002, a "builder's remedy" lawsuit against the borough was filed by the Van Cleef Family Limited Partnership, alleging Millstone had failed to meet any of its state Council on Affordable Housing obligations. Rezem Family Associates joined Van Cleef in the lawsuit, which still has not been resolved.

From 2002 to 2004, the borough created five separate development plans for the property, but continued to refuse to change the zoning to make the plans feasible, the lawsuit charges.

In 2004, Carter Van Dyke, the new municipal planner, created a new "vision plan" for the property which, the suit alleges, contains "totally false" maps and statements "designed to intentionally devalue the ... property."

The "vision plan" contained five separate concepts for the property and Van Dyke introduced a sixth plan, which allowed for cluster zoning and the construction of retail and residential units. In addition, the sixth plan also anticipated the state Green Acres program would acquire 44 acres of the property for open space.

But, the lawsuit argues, "as of today there is no Green Acres money."

Three major developers that had contracts with Rezem Family Associates terminated the contracts because Millstone would not change the zoning, the lawsuit states.

The lawsuit specifically targets assertions in the "vision plan" that the property has historical significance dating to the Revolutionary War, but no evidence has been presented to support the claim.

The lawsuit also charges the "vision plan" contained an incorrect map that depicted the property as 50 percent wetlands and was "virtually undevelopable."

At the end of 2004, the borough presented a plan for the property that called for the Green Acres program to buy 44 acres and rezone the remaining 23 acres for residential and retail uses.

Rezem Family Associates agreed to the plan, but the Green Acres program wanted to defer any action until COAH had agreed to remove the property from the borough's affordable housing program, according to the lawsuit.

In August 2007, Rezem Family Associates agreed to a settlement with the borough that stated if the Green Acres program did not appraise the property and make an offer by December 2007, Rezem Family Associates could withdraw from the settlement.

No appraisal has been conducted, the suit alleges.

In March 2008, the lawsuit states, a member of Rezem Family Associates met with state officials and learned that the Green Acres program had no intention of being the lead buyer of the property, but was only going to contribute a portion of the $4 million purchase price with the remainder coming from Somerset County, the D&R Greenway and the borough.

"The premise on which (Rezem Family Associates) executing the mediation agreement with Millstone was a lie," the lawsuit charges.

Michael Deak can be reached at 908-707-3134 or [email protected]