The Redevelopment Agency approved a $215,000 settlement with A&M Industrial Supply last month, a year after the company filed suit in a dispute over relocation assistance.
A&M had been located on Campbell Street between Elm Avenue and West Cherry Street until last year when the property was acquired as part of the 116-unit Metro Rahway development that broke ground this summer. The Redevelopment Agency discussed the litigation in closed session during several of its meetings this year, including a 30-minute closed session at its Nov. 13 meeting.
A&M, which is still located in Rahway, filed suit in November 2012 seeking $300,000 and the settlement came about after court-ordered mediation in October. The agency will be required to make the $215,000 payment by the end of the year but admits no fault, Redevelopment Agency attorney Frank Regan said.
A&M Industrial claimed that the agency, through Executive Director Peter Pelissier, agreed to provide relocation assistance in conjunction with selling their property to Heartstone Development. However, Regan said commissioners never formally approved and authorized payment nor was the agency ever obligated to provide assistance since it was not acquiring the property.
The only times the agency has provided relocation assistance in the past has been when it acquired properties itself, he said, such as the former Bell Drugs property on Irving Street for the YMCA’s expansion and as part of the Rosegate project on East Hazelwood Avenue. In the case of Metro Rahway, Heartstone Development acquired the parcels for the project, including the 1.56-acre A&M site on Campbell Street.
The dispute has its origins in 2005 when A&M Supply — after learning a few years earlier that its property was part of a redevelopment plan — sought relocation assistance from the Redevelopment Agency. The economic downturn delayed the project, including several changes to the plans, and A&M at times was not prepared to relocate, needing to find a suitable new location, according to the lawsuit. Heartstone acquired the A&M site in 2012 and got the project moving again.
A&M was close to securing a new property that it had to close on by February 2013, according to the lawsuit, when in October 2012 it had been advised that the Redevelopment Agency would not be providing assistance, prompting the litigation.
A&M’s suit claimed that a Nov. 7, 2005 letter from Pelissier confirmed that the agency had adopted a resolution authorizing a redevelopment agreement with Heartstone that included $300,000 in relocation assistance. Minutes of the Redevelopment Agency’s Dec. 15, 2005 meeting indicate that commissioners were presented with the Nov. 7 letter from Pelissier to A&M, however, there’s no record of a resolution being approved.
Initially, A&M sought more funds, pointing to similar relocations in Carteret that received between $600,000 and $700,000 in assistance. The company claimed that Pelissier presented its request for additional funds to commissioners and a Dec. 22, 2005 letter to the firm indicated that its request was rejected, with the $300,000 offered previously being “all the funds that will be allocated.” The Redevelopment Agency, however, was unable to find records of executive session minutes going back to 2005.