Judge Rules Against Lawmakers Trying To Stop $300M State House Repairs

Decision paves the way for renovation project to begin but legislators not ready to concede defeat, might appeal.

A state Superior Court judge yesterday ruled against a bipartisan group of lawmakers who are seeking to stop Gov. Chris Christie’s controversial, multimillion-dollar renovation of the State House in Trenton. The judge said that because bonds have already been sold to fund the rehab work any legal challenges are now moot.

The decision was issued from the bench by Mercer County Assignment Judge Mary Jacobson after a round of oral arguments. Her decision paves the way for more substantial work on the State House project to move forward since the Christie administration had made clear in a previous proceeding that no irreversible construction or demolition would occur before yesterday’s hearing.

But it’s unclear whether the lawmakers, led by Sen. Ray Lesniak (D-Union) and Assemblyman John Wisniewski (D-Middlesex), would file an appeal of Jacobson’s ruling in the Superior Court’s Appellate Division. The two lawmakers, who are also attorneys, left the door open to doing so yesterday.

“The matter doesn’t end here. We have to consider an appeal,” Wisniewski said.

'Crafty manipulation of the law'

They also said the ruling — which rested heavily on a 1997 legal precedent involving bonds issued by then-Gov. Christie Whitman to finance public-employee pension debt — effectively rewarded the Christie administration for hastily arranging a bond sale to a private group of investors just hours after the financing for the State House project won final authorization last month from the state Economic Development Authority.

“It’s just a very crafty manipulation of the law by Christie to avoid legislative approval and approval of the voters, and unfortunately he’s getting away with it,” Lesniak said.

A spokesman for the state Attorney General’s Office, which represented the Christie administration in court, declined comment on the ruling yesterday.

Christie, a second-term Republican, announced the four-year renovation project in late November, saying it would be the first in decades for a section of the building that houses the signature gold-leaf dome, its rotunda, and several executive-branch offices, including the governor’s. This original part of the State House, located near the Delaware River on West State Street in Trenton, was built in 1792, and Christie said its current condition is “an embarrassment to the people of the state.” His administration has also said it’s costing $8 million to $10 million annually just to maintain the building.

But instead of going through the New Jersey Building Authority, which at one point was overseeing a $38 million State House renovation effort, oversight of the expanded rehab project was shifted earlier this year to the little-watched State Capitol Joint Management Commission, a panel made up of both legislative and executive branch appointees. The commission voted in late April to approve the project’s finance plan, which also involves a lease-back arrangement with the Economic Development Authority that will effectively make the authority the landlord of the State House while the bonds are being paid off using rent money to be provided through the annual state budget.

‘Sophie’s choice’

Last month, the EDA voted to approve bond financing for the project, and then immediately moved ahead with a “private placement” transaction with RBC Capital that didn’t involve offering any of the bonds to the public.

Though no one in court yesterday disputed that the State House is in disrepair, Lesniak accused the Christie administration of “jumping through hoops” to avoid giving lawmakers a chance to vote on the renovation project’s financing. And he said allowing the financing to move forward will force lawmakers to make a “Sophie’s choice” in the future. They can either vote against annual appropriations to pay off the bonds, or vote for debt that they never authorized in the first place, he said.

“The power to appropriate money is exclusively in the hands of the Legislature,” said Lesniak, who filed suit last month with fellow Sens. Christopher “Kip” Bateman (R-Somerset) and Michael Doherty (R-Warren).

Wisniewski, who filed his own lawsuit separately from the other lawmakers, urged Jacobson yesterday to bar the Christie administration from using the bond proceeds to fund the rehab work. Though complicated, he said the financial transaction could still be reversed. Wisniewski also said the foundation of his legal challenge is rooted in language in the state constitution that seeks to limit the state’s ability to bind future legislatures to hefty debt payments.

“While the race may go to the swift, the constitutional interpretation should not go to the swift,” Wisniewski said.

A third lawsuit challenging the financing was also filed in late May by Sen. Richard J. Codey (D-Essex), who did not attend the hearing in person yesterday.

Part of effort to revive Trenton

But assistant state Attorney General Jean Reilly argued that because of the bonds already being sold, with some of the revenue used to refund some prior debt, the transaction cannot be undone. She also said the lawmakers had an opportunity to file their legal opposition before the issue became moot with the sale of the bonds on May 11, but they chose not to do so. The State Capitol Joint Management Commission issued its final approval for the financing in late April, she said.

“These plaintiffs didn’t file suit, they filed press releases instead,” Reilly said.

She also held up as precedent a 1997 state Supreme Court case that involved a legal challenge filed by the then-mayor of Edison against the Whitman administration’s sale of nearly $3 billion in pension bonds. Since those bonds — which the state is still paying off — had already been issued when the case reached the Supreme Court, the justices ruled at the time that the case was moot.

Jacobson, in her ruling yesterday, said she found the 1997 case “analogous in many ways” to the lawmakers’ challenge of the State House bonds. “In both cases, the bonds were sold,” Jacobson said. “I have clear precedent here that says such cases are moot.”

Christie’s office didn’t reply to a request for comment on the ruling yesterday, but the governor has repeatedly maintained that the financing was done in a completely legal way. And earlier yesterday, Christie referred to the State House renovation project during a news conference in Trenton to announce the development of a new park near the State House, saying it’s all part of a broader effort to revive the capital city.

The park will be developed on a 4.5-acre strip of land along the Delaware River in Trenton using $3.5 million collected by the state Department of Environmental Protection from legal settlements. Another $15 million from a fund supported by federal transportation dollars will be used to build a pedestrian bridge over Route 29 in Trenton to link the city’s downtown to the proposed park, he said.

“We’re going to have a continued commitment to improve and enhance quality of life here in Trenton,” Christie said.

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