December 7, 2011

 

Dear Neighbors,

 

I sent you a letter in early October about the fact that Landmark Homes was nearly two years delinquent to our Borough on their taxes for the Hayward property.  It was hoped that the Radburn board of trustees would want to get to the bottom of this and find out what this could mean for the development deal that has been underway since 2004. 

 

Landmark requested a meeting with the board of trustees on October 27th.  As the Radburn attorney could have or should have known about the delinquency while negotiating the revised contract last fall, I requested that Mr. Ferro attend the meeting as well.  This would be an opportunity for the trustees to ask questions and get answers.  The RA board President, Marion Paganello, made the decision that Mr. Ferro would not be invited to the meeting. 

 

Jeff Weinflash & Joel Schwartz of Landmark made a presentation of their latest renderings for the development.  They now have drawings done to scale.  The trustees asserted themselves over the placement of the tot lot, signage, and landscaping issues.  After this discussion, we had an opportunity to ask Landmark about their tax delinquency. 

 

The following is not a verbatim quotation of the Q & A, but is a faithful rendering, based on my notes, and written promptly after the meeting:

 

RA:  We were confronted with your tax delinquency.  Why did this happen?

 

Landmark:  It was a dumb mistake.  We kept the money in our pocket, instead of paying it.

 

RA: Who made the decision? 

 

Landmark:  I would rather not say.  Let me just say that when we found out about the lien, we paid it promptly.  Why pay 18% interest?  It’s stupid.

 

RA: Are you saying this was an oversight or a strategy?

 

Landmark: Neither.  In real estate developing, it is common to limit your investment in a property, until you can see a reward. 

 

RA: Did you have to borrow the money to pay your taxes?

 

Landmark:  No.  We had the funds, and this project has been self funded since we started.  Landmark has rental income, unlike some other developers.  We have not borrowed for our planning or legal expenses for this project.

 

RA: I anticipate that you will be borrowing to finance construction.

 

Landmark:  Yes, we will once we are ready to begin.

 

RA:  Do you have a pre-approved line of credit?

 

Landmark:  No.  Banks are not interested in financing until you are further along than we are yet.  All we have had so far are plans and a lawsuit (reference to Landmark’s lawsuit against Borough of Fair Lawn for builder’s remedy, ed.).  Banks won’t lend to a lawsuit.  They want to see approved plans.

 

RA:  Do you anticipate borrowing from wealthy individuals or from a commercial line of credit?

 

Landmark:  Most of our projects have been financed through banks.  We have also gotten some long term investment from insurance companies.  Financing is not easy right now, but we believe we will get it when we need it.  Have I answered your question?

 

RA:  Yes, thank you.

 

It is difficult to draw conclusions from these answers, but I have some observations:

 

•  While Landmark said that incurring a tax delinquency was neither an oversight nor a strategy, their answers certainly made it sound like it might be a practice. 

•  Landmark does appear to have the intent to develop, but might be waiting for the real estate market to improve.  Remember, the renewed contract gives them exclusive right to purchase until 2014.

•  The Radburn attorney, Mr. Ferro, communicates only through the RA President and the RA Manager.  I know that some of the trustees, and the community, would appreciate some answers.  Surely, an attorney of his stature and experience could not be afraid of a few tough questions. 

 

All the best,

Marshall Chandler, president, Radburn Citizen’s Association