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Developer gets new extension to secure necessary financing

July 6th, 2005

Paul P. Josephson, an attorney for Save Sandy Hook, expressed disapproval that this makes a seventh extension granted to the developer

Park Service OKs Sandy Hook delay
Developer gets new extension to secure necessary financing

Published in the Asbury Park Press 07/6/05
KEYPORT BUREAU

SANDY HOOK —

The National Park Service has given a private developer more time to draw investors to help pay for proposed renovations to 36 historic buildings at Fort Hancock, as he fights a lawsuit from an environmental group opposed to the proposal.

Maria Burks, regional commissioner of the park service, confirmed Tuesday that a yearlong extension was given to Sandy Hook Partners LLC in late June. Burks attributed the extension decision to the fact that a lawsuit filed by local environmentalists has hampered the developer's efforts to attract investors.

Paul P. Josephson, an attorney for Save Sandy Hook, expressed disapproval that this makes a seventh extension granted to the developer. Despite environmental groups' opposition to the extension, the park service's action affirms their belief that investors don't feel the project is appropriate for Fort Hancock, Josephson said.

"A part of me is outraged that the government gave them another extension," Josephson said. "It indicates to me that (Sandy Hook Partners president James) Wassel wasn't qualified to do this deal and the government knows this. On the other hand, I'm pleased to know the financial community agrees with our assessment of this project and refuses to finance it."

Although the lawsuit may have made investors anxious, the park service supports Wassel's intent to restore the buildings — most of them unused for years — and rent them out to educational and professional organizations and bed-and-breakfasts.

"There's a very good chance this project won't move forward as long as this litigation is casting a dark cloud over (Sandy Hook Partners') head," Burks said. "We're confident he has the ability to rehabilitate the site, but not while this litigation is going on."

Wassel could not be reached for comment.

$75 million plan

The renovation of the 36 historic military houses is estimated to cost $75 million. Sandy Hook Partners, which currently has a 60-year lease for the property, is trying to secure up to $14 million in investments to fund the project.

In November 2001, Sandy Hook Partners signed a letter of intent to rehabilitate the buildings and to secure investors for the project within a year. A year later, the park service extended the developer's lease for another year.

In July 2004, Sandy Hook Partners signed a 60-year historic lease which included a deal to rehabilitate the military houses.

Then in December, Save Sandy Hook filed a lawsuit against Sandy Hook Partners, the federal Department of the Interior, the National Park Service and the state Department of Environmental Protection. The group accuses the park service of not getting full market value for the 400-acre complex leased to the developer. Officials for the park service said it would receive approximately $495,000 in annual rent from the deal, but attorneys for Save Sandy Hook said the building space would generate approximately $738,000 in rent a year.

Opponents speak out

Stephen Szulecki, 40, of Highlands, said it was the park service's responsibility to make sure the developer had investors in place when Wassel signed the letter of intent nearly four years ago.

"It's obvious with all these extensions that is not the case," he said. "It seems to me they are giving the developer an uneven playing field."

Peter P. O'Such Jr., 61, of Fair Haven, also feels Wassel should have had funding already secured. "This is another demonstration of this being a bad idea," he said.

U.S. Rep. Frank J. Pallone Jr., D-N.J., also doubted Wassel's ability to lure investors to Fort Hancock.

"How many extensions are they going to give him to realize this isn't going to work?" Pallone said. "I doubt (Wassel) will be able to get investers, as I have doubted his ability to get investors from the beginning."

Judith Stanley Coleman, 70, of Middletown, the president of Save Sandy Hook, said the litigation brought by her group is not an excuse for the developer not to have committed investors for the project.

"This adds to the park service's notion that the only way to save Fort Hancock is through commercial development," Coleman said. "The development of Sandy Hook would be another hack on the taxpayer, and we need to preserve it at any cost."

Rodney Point-Du-Jour: (732) 888-2619 or rpoint@app.com

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