State agency tells Union County Improvement Authority to review $50 million Roselle school-recreation project

UNION COUNTY, NJ — A state agency that regulates fiscal operations for municipalities and counties asked the Union County Improvement Authority to review concerns raised by a Roselle resident regarding the town’s proposed $50 million Mind and Body Complex.

Local Finance Board Chair Timothy Cunningham sent a letter Aug. 24 to the UCIA, which has been approved to issue up to $59 million in bonds for the Roselle Mind and Body Complex, asking it to review issues with the land lease and financing for the project.

In addition to a new school and community center, the proposal also includes a new library in the borough.
Former school board member Anthony Esposito sent a letter to the board Aug. 2, also raising concerns about the project. His letter, which included more than 25 pages of supporting documents, prompted the board to reach out to the UCIA.

Among other issues, Esposito claims that the financing for the project is based on a 2014 lease agreement between the school board and the town.

However, he says, the the agreement is no longer valid because it required financing to be in place by the end of 2015, and the freeholders did not approve the UCIA to issue the bonds until last year.

The UCIA submitted the project and a plan to issue $49.5 million in bonds for it to the LFB for review on April 22, 2015, the board’s letter stated. The LFB “reviewed and issued positive findings” of additional bonds for up to $59 million in September 2016. The board gave its approval in 2015 too, county spokesman Sebastian D’Elia said.

It was unclear if the board knew of Esposito’s concerns when it issued those positive findings.
“No recollection of what information was provided when,” Emike Omogbai, spokeswoman for the state Department of Community Affairs, said in an email.

The UCIA has not yet responded to the board’s letter, said D’Elia, who is also a UCIA commissioner.
Esposito and other residents are concerned about the lack of transparency about the project and what it will cost taxpayers.
“I simply wanted to make the state authority, who controls the municipal spending, to see what was happening with the leases,” Esposito said, who voted against the lease agreement when he was a school board member in 2014. “Hence, I sent the letter to the Local Finance Board. My goal is and always has been to save the taxpayers of Roselle money.”

It is unclear why $9.5 million more in funds were required between the LFB’s initial approval in 2015 and its second a year later. A call to UCIA Executive Director Daniel Sullivan on Sept. 6 was not returned.

The complex, which is designed to include a building for pre-school and kindergarten, is to be built on grounds owned by the Roselle Board of Education on Chandler Avenue next to the community-recreation center and library, which the town had agreed to lease from the BOE.
The LFB gave its blessing to the UCIA for the borough’s $35 million portion of the project and another $24 million for the school board’s segment.

Esposito’s concerns are centered on the town’s lease, which has changed several times.
Besides the expiration of the lease, he said the original lease agreement prohibited the town from subletting its portion of the land, but it agreed to a sublease to the UCIA in February this year.

Using UCIA bonds to finance the project would reduce the property tax burden on Roselle residents, in theory because of the UCIA’s superior bond rating compared to Roselle’s.

The bonds were guaranteed by the freeholders, but never issued. The freeholders were slated to vote regarding the issuance of bonds in early August, but they held off after Esposito’s lawyer threatened legal action against them.

Meanwhile, the BOE has amended the land lease for the project twice since July and on July 10 held a special meeting vote and amended it to allow for financing for the project to be obtained by as late as 2018.

At the latest meeting of the BOE on Aug. 28, the lease was amended again to rescind the July 10 vote, making the lease effective starting Dec. 30, 2015, while still allowing financing for the project be secured by 2018.

Esposito also filed a civil complaint in state Superior Court against the Roselle Board of Education, the borough council, the UCIA and the County of Union on Aug. 23.
The suit asks all parties to stop pursuing financing for the project.

D’Elia, the county spokesman, said residents’ concerns must be addressed before any further action is taken on the project.
“We need to wait until we settle out some of these issues,” D’Elia said. “There were questions that were raised by residents of Roselle and we’re going to try to address as many of those questions as we can. And once those are clarified, we’ll move forward with some direction.”