News
Developer Retains Lease On Three Sandy Hook Buildings
Rent to National Park Service averages $507 per month.
By John Burton
SANDY HOOK - The 10-year-long controversy over a lease agreement between a private developer and the National Park Service for the repair and commercial lease of some 28 buildings at the former Fort Hancock, ended with federal officials canceling the agreement, but allowing the developer to continue to lease and repair three of the buildings included in the original plan.
According to a recent review of National Park Service (NPS) documents, since July of 2007, the developer has been paying an average of $507.24 per month for all three structures - the Fort chapel, theater, and office space on Hudson Road.
Over the past three years, Sandy Hook Partners, which uses the 26 Hudson Road location as its official office site, has submitted to the National Park Service checks as low as $103.24 (the check's notation indicates this was for February 2010 rent). The largest single payment was a check for $569.02, apparently made for December 2009's rent.
A tabulation of the payments from the list made available by the NPS, puts the total Sandy Hook Partners paid for the use of the sites at less than $15,000 for the three years.
The Code of Federal Regulations concerning the park service's leasing of government owned property for private use, noted that such a lease could be entered into, "only if the lease requires payment of rent to the government equal to or higher than the property's fair market value rent."
However the regulations do allow for the parties to the lease to take into consideration, "Any requirements under the lease for the lessee to restore, rehabilitate or otherwise improve the leased property."
Federal regulations also require the lessee to obtain liability insurance, when taking over the site, relieving the federal government of responsibility. However, the documents provided by NPS shows that Sandy Hook Partners had insurance only as of September 2009, while the developer took control of the properties in July 2007.
The NPS named Sandy Hook Partners, headed by Rumson resident James Wassel, as the selected developer in 2000. After a series of extensions, SHP entered into a formal agreement to lease 36 of the approximately 100 structures at the historic former military installation in 2004.
Under the agreement, the developer would receive a 60-year lease for the buildings, and be allowed to sublease them for a variety of commercial, educational and not-for-profit uses, securing a profit for the developer in the process.
In return for the lease, Sandy Hook Partners was responsible for the renovation of the aging and in some cases seriously deteriorating buildings that many feel have historic significance. The park service and some historic preservationists hailed the lease agreement as a means of saving the site without additional burden on the taxpayers.
But others opposed the plan, objecting to allowing publicly owned parkland to be used for commercial development. Opponents also raised concerns about the environmental impact of the project on Sandy Hook and alleged that the park service failed to adhere to its own and other federal regulations in approving the lease.
Those objections led to a lengthy legal struggle that made its way through the federal courts. While the objectors failed in the courts, the park service eventually terminated its agreement with the developer when Sandy Hook Partners was unable to find adequate financing for the multimillion-dollar project, even though the park service had granted numerous extensions over the years.
The park service did continue with the separate provision allowing Sandy Hook Partners, and its principle, Wassel, to retain his lease on the three buildings.
Wassel has done some renovations on the chapel and theater, and has the ability to rent the sites for special events with the provision they use a designated caterer.
Merri-makers Caterers in Sea Bright advertises options for weddings and receptions at the former post chapel, now called the Chapel on Sandy Hook.
The monthly rent payments made by Wassel have varied from month to month, because of the formula established in the lease, which takes into consideration the revenue generation and any capital improvements done by the lessee, John Harlan Warren, a NPS spokesman, explained last week.
The whole point of the park service's Historic Leasing Program was to encourage the restoration of the sites, Warren said.
"If we simply charged fair market value for buildings that were dilapidated nobody would fix them up and the buildings would suffer," Warren said. "This is a way to make an arrangement with a partner and have buildings improved and preserved in a challenging financial environment."
"Why is the park service determining the figure based upon the amount he [Wassel] is making?" U.S. Representative Frank Pallone Jr. (D-NJ) asked this week when informed of what Sandy Hook Partners is paying in rent.
Pallone has been a longstanding critic of the park service's plan for a public/private partnership to renovate the buildings, having continually called it "commercialization" of the federal parks. "And I think this is just another indication of the problems that exist with this leasing process."
"It is perfectly OK, according to law, regulation and policy for for-profit organizations to lease our buildings. There is nothing unusual about that," Warren countered, adding "We follow the law. "We're acting by legal agreement."
Pallone said the restoration project should involve not-for-profits, such as the ones that currently use some of the locations, and work should proceed building by building. Such was the case with the building used by the New Jersey Marine Sciences Consortium, an educational organization that worked for years to repair and rehabilitate its home at the fort, Pallone noted. "This way we don't get into questions of how much he's paying, how much he's making," he said.
Wassel was not immediately available for comment. But Warren said referring to the current agreement, "for the first five years this is the mechanism. It's a legal document; we're bound by it."
In 2012, however, "We get to talk again," and possibly renegotiate the terms, he said.
Currently at Fort Hancock, excluding the buildings used by NPS, eight others are used by outside entities, with Sandy Hook Partners the only for-profit endeavor among them. Other uses included the previously mentioned consortium, the American Littoral Society, Clean Ocean Action (which shares the society's location), a facility for the National Oceanic and Atmospheric Administration (NOAA), among others.
