Downtown Developer Sues Toms River Over “Interference”

TOMS RIVER – The redeveloper of the former downtown hotel site filed a lawsuit against Toms River and Mayor Daniel Rodrick for what they say amounts to breach of contract and other issues.

The lawsuit, by Capodagli Property Company, LLC, through its subsidiary, Meridia Toms River 40 Urban Renewal LLC, seeks an order forcing the town to honor contractual obligations. It also seeks compensatory damages, punitive damages, attorneys’ fees, and interest.

Under the previous administration, the crime-ridden Red Carpet Inn was demolished and the land purchased by the town. Capodagli originally planned two, 10-story apartment towers over ground-level retail and a boardwalk around the river. This boardwalk would be for passive recreation, not for rides and games like in Seaside. This plan was changed to six stories. Other amenities, such as an amphitheater, remained unchanged.

One of Rodrick’s campaign promises was to stop overdevelopment, and in particular this project. He has said repeatedly that Capodagli received a sweet deal from former Mayor Maurice Hill and that taxpayers are going to see the impact when families with school-aged children move in. The developer had a “payment in lieu of taxes” agreement that had them pay a certain amount every year instead of taxes for a number of years.

“Mayor Rodrick and the Township have repeatedly breached the redevelopment agreement and have engaged in a course of conduct intended to delay and obstruct the project,” a press release from the redeveloper stated. “The resulting delay was relied upon by Mayor Rodrick and the Township as the basis to illegally and improperly terminate the parties’ redevelopment agreement. In truth, it is the Township that has breached the redevelopment agreement. Rather than honor its contractual obligations, the Township has put taxpayer dollars at risk by forcing this litigation to vindicate Meridia’s rights.”

According to the suit, Capodagli paid the town $625,000 for the land in 2022. It has spent $3.2 million in getting approvals from such entities as the New Jersey Department of Environmental Protection.

The suit alleges that the town or the mayor refused to provide information to Capodagli that the developer needed to complete their end of the paperwork, as well as adding requirements to the project that were not supported by town ordinances. That’s what made the developer late on deadlines. The town severed the agreement because the developer was late.

The suit also maintains that the town violated the state requirement to provide a certain amount of affordable housing for residents.

Meanwhile, the developer has already begun work on the bulkheading around the river.

“Their lawsuit is without merit, and it will not be successful! Capodagli missed all of their deadlines last year,” Rodrick told The Toms River Times. “The prior administration extended those deadlines by one year, and they blew the extended deadlines as well. In fact, the developer didn’t even apply for CAFRA approval until after the permit was due, two months after we had already put them into default. CAFRA typically takes one year for approval. It is Capodagli that has dragged its feet! We are simply exercising our contractual right to pull out of this deal.”

CAFRA stands for Coastal Areas Facility Review Act, and it governs construction near bodies of water.

“Capodagli also missed this year’s financing deadline and notified the township that they were unable to obtain financing,” Rodrick said.

“As for the bulkheading, they began work after we notified them that we were pulling out of the contract,” he said. “It appears they are attempting to make it look like they are ready to go and that they have losses, but a judge will see right through that. As I said, we are very confident in the township’s legal position. We did nothing to impede their process. The developer is just incompetent.”

The suit also mentions the town/Rodrick “interfering” with a multimillion dollar federal grant for the entire downtown area.

This also came up at a recent Township Council meeting. Councilman James Quinlisk, who is in a different political camp than Rodrick, said they let a $5.6 million grant go that would have helped fight flooding downtown. “This administration allowed it to lapse to spite someone else.”

Rodrick said that the grant would have reworked traffic to benefit the developer.

“The downtown loop would have put in the infrastructure for the downtown redevelopment,” the mayor said. Soon, he will ask the council to change the redevelopment plan.

Councilman David Ciccozzi, who is an ally of Quinlisk, said it will cost the township a lot in legal fees.

Rodrick said that the legal fees would be less than the increase in taxes that would come from the apartments – primarily in school taxes since there would be families living there.

“Redeveloper” is a term for a developer who is building on land that already has buildings. The designation of “redeveloper” gives the company access to funding and also allows a town to have more control over what is being built.