RiverWinds development brought beauty, headaches to West Deptford

There's a pristine spot on the Delaware River in West Deptford where residents flock to golf, exercise, and have dinner. Some go simply to watch the sun set as airplanes soar into the sky across the water.

Few towns can boast tracts such as RiverWinds in Gloucester County.

Town officials at the turn of the century embarked on the redevelopment of more than 1,100 acres that would make it all possible - a community center, restaurant, senior housing, and a golf course with a sweeping view of Philadelphia. Not bad for a former dredge spoils dump.

"We never had a Main Street, we never had a town center, we never had a central point for everybody to locate," said former West Deptford Mayor David Shields, who championed the project.

More than a decade later, RiverWinds has ostensibly become the town's biggest point of pride - and a major source of financial burden.

When the 18-square-mile town of about 22,000 approved more than $50 million in bonds for RiverWinds in 2000, it had a municipal debt of about $31 million (in 2000 dollars). Today, with other obligations, the overall debt is nearly $150 million.

"Wow," a shocked Gov. Christie responded when told about the debt during a town-hall meeting in 2011. "Really scary."

Last year, the town's high debt service triggered a mandatory state review, which could have resulted in state financial supervision. West Deptford was ordered to report back quarterly.

"We will continue to pay particular attention to West Deptford, more so than other municipalities because of what's going on," Thomas Neff, director of the state Division of Local Government Services, said during a hearing.

The debt level, weighed against other municipal financials, bars the town from borrowing more without state approval - the only town of New Jersey's 565 municipalities, aside from Perth Amboy, held to that restriction last year.

The debt service has limited the town's ability to address other needs, such as capital improvements. So it's not surprising that West Deptford's finances stir political discord.

Republicans, who took over the township committee in 2012 after years of Democratic control, ran on a platform to fix the town's finances. Democrats contend they've made them worse.

Committeewoman Denice DiCarlo, the committee's lone Democrat and a major critic of the current regime's financial management, said the town needs state oversight. In a recent letter to the state, she likened West Deptford to a house on fire.

The issue is one defining this fall's election, which again will decide which party runs the town. Mayor Ray Chintall and Committeeman John Keuler are challenged by Democrats Jim Mehaffey and Adam Reid.

In the background of that discourse stands RiverWinds - an impressive, but costly, riverfront complex that has not materialized as planned, and one the town will continue to pay for in years to come.

Even RiverWinds critics didn't like the alternative.

In the 1990s, the U.S. Army Corps of Engineers eyed the area again as a repository for Delaware River dredge spoils.

"That would have been a horrible waste," said Senate President Stephen M. Sweeney (D., Gloucester). Instead, as freeholder director, he supported another plan for his hometown.

West Deptford would buy the land, preserve open space, and build a long-desired community center and recreational space. Private developers would be brought in to provide luxurious amenities.

By July 2000, the town committee had approved financing more than $50 million bonds for the community center, planning, and site improvements.

Those things happened, but a proposed marina, ice rink, and, most notably, hotel and conference center did not.

Plans for the hotel and conference facility were announced in 2005. The town got a down payment of more than $5 million, but it never got the package: Three years later, the lead developer, Namwest - tied to Ezri Namvar, a California businessman convicted of wire fraud - filed for bankruptcy.

Hopes for those components also dimmed in the face of the recession and a bruised hospitality industry. Others also blame government inaction.

"Making RiverWinds successful has never been a priority" for current officials, said Gerald White, the town's administrator in the plan's infancy. He criticized the fact that no requests for proposals have been issued.

The mayor and his team tell a different story.

They point to a financial mess left by their predecessors. In 2012, a high-rise apartment complex at RiverWinds was $1.5 million past due between a payment-in-lieu-of-taxes agreement and taxes, said Mark Cimino, the town's redevelopment attorney. Office and retail properties were behind. A payment-in-lieu-of-taxes agreement on the golf course is still being renegotiated.

"I have not been asleep at the wheel," Chintall said. "You've got to know the history."

In 2001, the promise of its regional destination on the horizon, West Deptford officials agreed to back a nearly $10 million loan for the developers of the 18-hole golf course.

Those behind the contract argue that the town's decision was warranted. The course was crucial to making the planned conference center viable.

But a series of deals that ended with the course being transferred to the conference center developer, which defaulted, left the town responsible for the loan. The municipality even dabbled in the golf business for some time.

When Republicans began looking into RiverWinds in 2012, they found what they deemed to be inadequate disbursement records for the course's construction.

The town took its findings to court. In a complaint, it alleged that Fulton Bank had failed to monitor withdrawals by the developer.

The implication: Millions, now owed by taxpayers, had gone unaccounted for. Democrats called it a "witch-hunt." A heated public debate ensued.

The suit and an appeal were both dismissed, the town declared liable.

When the RiverWinds Community Center opened in 2002, "it was the envy of southern New Jersey," said Sweeney, a regular at the gym.

The facility also includes pools with playful slides and rock climbing.

"This is our biggest asset," Deputy Mayor Jeff Hansen said.

In its first year, the center operated with a surplus. But by 2004, it began losing money - at its worst, in 2007, experiencing a $500,000 deficit.

Steps to cut costs are expected to place the center in the black this year.

Even so, membership - for residents, a family of four pays $500 annually - has dropped from nearly 11,700 in 2002 to about 9,100 today, despite the elimination of residency requirements.

RiverWinds' planners have always said proceeds from a natural gas-fired electric generating station would offset RiverWinds costs, but that plant, too, was delayed.

The LS Power station is scheduled to come online this year. Payments in lieu-of taxes from the site, which began in 2012, are to provide the town $107 million over 30 years. The county is to receive 10 percent of that, but a lawsuit over that division is pending.

White, now with the county administration, said the money "can pay off a lot of bonds."

Meanwhile, West Deptford's debt was further inflated by a years-long property tax appeal over an oil refinery that Republicans settled in 2012 for more than $31 million, leaving the town in a tough financial situation.

"They got hit with a couple of bad things," said Marc Pfeiffer, assistant director of the Bloustein Local Government Research Center at Rutgers University. "Their timing, in hindsight, was particularly bad."

This year, debt service is nearly one-third of local taxes and of the town's $32 million budget. By comparison, Pfeiffer said, debt service averaged nearly 9 percent of total municipal spending statewide in 2011.

The high debt service is "going to crowd out other costs and other decisions," Pfeiffer said.

Officials expect that, with planned payments, the town will be below its state debt limit by 2018.

At the same time, Chintall said, the town is trying to revamp its focus on economic growth. DiCarlo said those efforts were not enough. New development, she said, is needed - namely at RiverWinds.

"The original plan wasn't supposed to hurt the town," she said. "If it's hurting the town from a tax perspective, well, we need to fix that. There's so much potential" there.

She, like many, does not regret RiverWinds.

Shields, who led the project at its start, called it "the best thing that ever happened to our town."