Efforts to renew a brownfields tract elude Palmyra

The riverfront borough of Palmyra believed it had finally found The One.

A developer, i.Park Palmyra L.L.C., was offering the strongest commitment the borough had received to transform 189 acres on the south side of Route 73 into a revitalized gateway to Burlington County from Philadelphia. Other companies had backed out twice in recent years.

With assurances of stimulus for the South Jersey economy and the creation of hundreds of jobs, the company signed an agreement in March. It paid $150,000 up front to turn the contaminated site into a $563 million mix of condos, shops, offices, and an expo center.

Today, the land is still fallow, i.Park Palmyra is gone, and its point man on the job is hooking up with another city 10 miles up the Delaware.

"It's been a real disaster, and it's been a real disappointment," said Erik Rucker, an equity partner in i.Park Palmyra.

Days after Palmyra ended the redevelopment agreement last month, Burlington City authorized Rucker's company, the Chicago Group, to redevelop 100 acres that once were home to a pipe foundry. Tenants and engineers who had lined up for the Palmyra deal are following him to his new project.

They leave behind an equally disgusted Palmyra Mayor John Gural, and a deal that has proven as toxic as the contaminated land for which it was planned.

Redevelopment of Palmyra's state-designated Brownfield Development Area - a contaminated site that the state works to have remediated and reused - has been the most difficult of any such area he's heard of in New Jersey, said Ian Curtis, a BDA manager.

"I don't think any one party is at fault, and I don't think any one party is blameless," said Curtis, who works for the Department of Environmental Protection.

Problems with remediating and securing ownership of the land, disputes about the developer's obligations, and a clash of personalities between Gural and Rucker - "bulls in a china shop, both of them," one observer put it - dimmed prospects early.

Palmyra has sought for the better part of a decade to redevelop the site, which was contaminated by its use as a landfill. The borough has received $7.5 million in cleanup money from the state.

Even in the boom years of real estate, two major companies sank hundreds of thousands of dollars into the project only to walk away.

Then a Connecticut company, National RE/sources, formed i.Park Palmyra to oversee development of a 200,000-square-foot exposition and convention center, up to one million square feet of commercial and office space, 296 townhouses, 176 condo units, and more.

In return, i.Park Palmyra was to pay the borough an up-front sum, in addition to $10,000 a month and reimbursement of bills by borough lawyers and environmental consultants. Payments would also go toward a new community center.

In a sour economy, it was a good deal for the borough, which had little but time to lose if things went bad.

Those involved said the borough expected National RE/sources president Joseph Cotter to take the lead. But, they said, he operated at a distance and had Rucker be the point man. And Rucker said he didn't work for National RE/sources because i.Park Palmyra was a joint venture with his company.

It wasn't until after the agreement was signed that i.Park Palmyra realized it didn't concur with all its terms.

Rucker pointed to the failure of past developers as evidence that the borough shares substantial blame for not seeing the site developed.

Nevertheless, he acknowledged, "the problem I'm having is that I didn't think this through well enough."

Gural said, "I won't dispute that I'm not an easy person to get along with, and I'm a very hard negotiator - but again, that's why I'm mayor."

The problems were there from the start. Two weeks before the agreement was signed, the tract's largest landowner had sued Palmyra, challenging its designation of the 104-acre property as "in need of redevelopment." That designation - which can be granted if a site is found to be blighted or obsolete - allows a town to take land by eminent domain if necessary.

But the borough and i.Park Palmyra said they didn't learn of the suit by Fillit Corp. until after they signed.

"Until this is resolved, the redevelopment for the project is dead," Rucker said in a June 12 e-mail to Palmyra Solicitor Ted Rosenberg.

So, according to Rucker, lawyers advising the company said it should not have to pay the first $10,000, due on June 1.

Rucker said in an e-mail to borough officials that $10,000 was small compared to what was on the table, noting i.Park Palmyra's progress. Gural e-mailed back: "To state '$10,000.00 looks very small compared to what is on the table' after having failed to pay it is asinine and arrogant."

Rucker said the firm then decided to pay the $10,000, to not hold up the project.

While the suit named no developer as a defendant, Rucker nevertheless approached Fillit with an offer of $5.2 million to take the property off Fillit's hands if it would drop the lawsuit, out of a desire to keep the project moving and compensate Fillit.

Fillit attorney Darryl Caplan said he was ready to sign a sale agreement when Rucker abruptly disappeared.

Those involved dispute the others' explanations.

Rucker said Gural was angry about the offer and told him he was interfering with a suit that the borough would win, so he backed off. Gural said he wanted Rucker to reach a deal but was concerned when he learned from Cotter that Rucker was not authorized to negotiate. Cotter would not comment on that; Rucker said he did have the authority.

What is known is that on Sept. 23, Rucker e-mailed the real estate broker and said that after a lengthy discussion with principals of National RE/sources, his Chicago Group would withdraw its offer until the suit was resolved.

In the meantime, i.Park Palmyra had become concerned about new state guidelines that called for greater oversight of remedial actions for contaminated sites.

One challenging part of the parcel was its second-largest area, the location of unexploded ordnance from Army testing in the 1940s. The site is mostly cleaned up and the DEP says it can become usable, but Rucker said he worried that building there was not worth the rise in costs of insurance, financing, and other areas.

And i.Park Palmyra was realizing that 90 percent of the land it needed had problems. So it questioned why it had to make the monthly payments and reimburse the borough's professionals for services it had not necessarily asked for, and for work it often disputed.

Gural, for his part, was becoming increasingly skeptical of Rucker and sought to have Cotter become more involved.

"We wanted to deal with the people we signed a deal with, which is Joe Cotter and National RE/sources, period," he said.

By fall, the project was on the brink.

A Sept. 29 council meeting was called to discuss the borough's dissatisfaction, particularly with i.Park Palmyra's nonpayment of $29,177.85 in professional bills.

Cotter came from Connecticut with a lawyer to try to smooth over the tensions. They arrived late. Gural made it clear that he would not have the project continue as long as Rucker was involved, according to a recording of the meeting.

Cotter sought to assuage him, saying he had replaced Rucker. "I realize we feel we've lost a little bit of time, but I think if we put this back together in short order, there's still a lot to happen," he said.

Councilman Robert Bostock wanted to know: "When do we get the $29,000 to take care of this issue?"

"I'll FedEx it tomorrow," Cotter promised.

Then, say those involved, he vanished, not responding to calls, e-mails or letters. The borough never got the $29,177.85.

Rucker said he and Cotter were not comfortable with the bills they were asked to reimburse.

Rucker said he tried to resurrect the project through Rosenberg, but Gural wanted him off it.

In an interview, Cotter repeatedly deflected questions about how he had notified Palmyra about walking away from the project, saying the more important issue was that the borough had not been able to get rights to the land.

"I think our position was, please advise us when one can settle the litigation and enable us to acquire or convey us the properties. That's really the problem," he said.

Now a three-time divorcée, Palmyra is on the hunt again for a developer after collecting $1 million or so from its past partners.

Rucker, for his part, wants to stay in Burlington County. For the Burlington City project, he has hired Palmyra's former special projects engineer, Pennoni Associates Inc., and Sadat Associates, hired by the borough last year at i.Park Palmyra's urging to do environmental work.

"I think Erik [Rucker]walked away learning a lot from this project," said Curtis of the DEP. "He strikes me as a very up-front, honest businessman."

Rucker met with Burlington City officials last week to talk about the development, and spokesman John Alexander reported smooth progress.

"Everyone was smiling," he said.