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Council approves amendment to 507 East Main Street financial agreement after debate over audit shortfall
Summary
Bound Brook council approved an amendment to the financial agreement for 507 East Main Street that accepts a settlement payment in lieu of two years of audited financial statements, drawing objections from a council member who said publicly available data indicated a much larger true-up.
The Borough Council of Bound Brook voted on June 9 to approve an amendment to the financial agreement for 507 East Main Street Urban Renewal LLC after extended debate about audit obligations and a proposed settlement payment.
A council member with accounting experience criticized the deal during the meeting, saying the proposed settlement of $28,000 in lieu of two years of audited financial statements understates what the borough is owed. “We came up with a predictive test … that number came out to be $101,480,” the council member said, calling acceptance of $28,000 “a huge failure and a breach of public trust.”
Town counsel and staff responded that the larger figure reflected a full-year projection and that the amount accepted was reduced because payments commence when a certificate of occupancy is issued for the project. Counsel told the council the new owner stepped into the developer’s contractual position and that parties had negotiated a cure for prior defaults.
Council members asked whether compliance and code-enforcement obligations would be written into the new agreement so the borough could require storefront and other repairs. A council member urged that any agreement include timelines for coming into compliance; staff said the borough’s construction office and code enforcement would oversee compliance after execution.
After discussion, the council moved and held a roll-call vote on the ordinance amending the financial agreement. Several members recorded no votes while a majority voted yes; the motion passed and the ordinance will proceed according to the borough’s final-reading procedures.
The debate highlighted two issues the council said it will monitor going forward: (1) whether the settlement adequately compensates the borough for missed payments and (2) whether the redevelopment agreement’s enforcement terms give the borough sufficient leverage to require physical code compliance.
Next steps: the ordinance amendment passed on final reading/consideration at the meeting and will be reflected in the borough’s forthcoming meeting minutes and legal files.
