Streams

How Christie Ally Profited From NJ Transit

Wednesday, February 26, 2014

WNYC

Shortly after Chris Christie was elected Governor in 2009, his transition team, chaired by close ally David Samson, came up with an idea: privatize New Jersey Transit’s parking lots for a swift infusion of badly needed funds. 

Barely nine months later, Samson’s private law firm, Wolff & Samson, was hired by New Jersey Transit for $650,000 to handle the legal work to privatize those parking lots. The selection came in the same month Gov. Christie named Samson to head the Port Authority of NY & NJ.

The contract was the prelude to a head-spinning series of transactions between NJ Transit, Samson and the Port Authority, a WNYC investigation has found.

In the ensuing years, Samson’s firm represented both NJ Transit and a private developer doing business with NJ Transit -- at the same time Samson supported transactions with NJ Transit as Port Authority chair.

Samson’s private spokeswoman had no comment for this story.  Samson, under investigation for Bridgegate, has had little to say since the lane closure scandal first broke.

Wolff & Samson was selected to represent NJ Transit in 2010 by another Christie appointee, the New Jersey Attorney General. NJ Transit minutes say the firm won the contract in a competitive bidding process because of its “extensive experience in real estate parking improvement projects, and complex state and municipal finance laws.”

The contract was never publicly advertised. Instead, the bidding documents were distributed to a hand-picked group of law firms under an executive order that predates Governor Christie, according to Leland Moore, a spokesman for the attorney general’s office.

The minutes say five firms submitted bids, but neither NJ Transit nor the Attorney General have identified the firms.  The bids were evaluated by a committee and the “Attorney General and the Governor concurred in the recommendation” to hire Samson’s firm, Moore said.

So it was that Samson, in his private capacity, became the lawyer for a proposal that originated in his own transition team.

Privatization was increasingly popular in state governments at that time. The financial crisis had blown a hole in local budgets, Washington wasn’t offering money, and in states such as Illinois and Indiana, leaders increasingly experimented with public-private partnerships as a way to prop up foundering transportation systems.

NJ Transit has 48,000 parking spaces in scores of lots throughout the state. Proponents of the privatization plan thought selling them off could have raised as much as $250 million for the agency.

A financial advisory firm, Scott Balice, worked furiously to put together a proposal for private investors.  Wolff & Samson’s work proceed apace – the bill eventually ballooned to $1.5 million.  But an obstacle emerged. NJ Transit didn’t own many of the lots it wanted to sell.  One of them, as it turned out, was owned by the Port Authority.

So Samson, whose firm was representing NJ Transit on the initiative, put on his Port Authority hat to advance the plan. As Port Authority chairman, he voted to turn over one of its lots to NJ Transit for $1 a year, according to minutes from the board’s meeting in February, 2012.

That move augmented NJ Transit’s portfolio and made it more attractive for investors. It also made Samson’s law firm more attractive to NJ Transit – because it had gotten for a dollar what could have cost millions to buy from the Port Authority.

After the Record published a story about the vote – and Samson’s dual role – the Port Authority’s counsel reviewed Samson’s role in the vote.

The conclusion: Samson “intended to recuse himself” and his recorded vote to approve the plan was a “clerical inadvertence,” according to a letter from the counsel to Samson and released by Samson spokeswoman Karen Kessler.

In fact, the recusal process at the Port Authority was so opaque that it was almost impossible to know at the time who was voting and who wasn’t. It is not clear that the resolution to hand over the parking lot to NJ Transit would have passed without a Samson vote. As a result, the Port Authority will vote on the matter again. 

The decision to lease the lot for $1 a year “worked to the indirect benefit of Samson and his firm” by making him a popular man at NJ Transit, according to Martin Robins, director emeritus of the Allen M. Voorhees Transportation Center at Rutgers University.

As it happens, the privatization plan went nowhere after it ran into opposition from transportation advocates and planners.

“It became more and more evident that they were turning over incredibly valuable assets and locking them up as surface parking lots for the foreseeable future,” said Peter Kasabach, executive director of the group New Jersey Future, which wanted the lots to be developed to for transit-friendly residential and commercial purposes. “It became apparent this wasn’t the best approach.”

There were other problems:  There were other lots that NJ Transit didn’t own that it wanted to privatize, and there was concern that in the hands of a private operator, parking fees could rise so much that it would make public transportation financially prohibitive. Though NJ Transit would eventually issue a request for proposals to take over the parking lots, the plan is widely understood to be on ice.

But Samson still had built a strong relationship with NJ Transit. So in the spring of 2013, his firm put on a third hat – as lobbyist for a private developer -- and quietly approached NJ Transit about building a light rail station in Hoboken near a property owned by the developer, the Rockefeller Group.

Rockefeller wanted to build a billion-dollar complex, with a 40-story office tower and 300 condominiums, in the north end of town. The train station would greatly increase the value of the project.

NJ Transit said the need for the station had been identified a decade earlier. In a secret non-binding resolution, transit officials agreed to pay for the station, at a cost that has been estimated as in the tens of millions of dollars. 

The deal was negotiated by Lori Grifa, a Wolff & Samson attorney who had just come off a stint as director of Gov. Christie’s department of community affairs. Her efforts on behalf of Rockefeller’s development plan were so assiduous that she brought Samson into the discussion too, records show.

“I am getting the full court press on this,” Hoboken's planning attorney, Joseph Maraziti, Jr., wrote to another Hoboken official in April, 2013, referring to Grifa’s eagerness to advance the construction plan.  “I have a voice mail from last night from Lori asking that I join a call this am with Lori and David Samson (Chair of PA.)"

Hoboken Mayor Dawn Zimmer charges that Lt. Governor Kim Guadagno threatened to withhold money to help the city recover from hurricane Sandy if Zimmer didn’t greenlight the Rockefeller project. That allegation is now under federal investigation.

But while Zimmmer was getting heavy pressure to approve the overall development, the Mayor said in an interview with WNYC she was never told that NJ Transit had agreed to build the station near the Rockefeller property.

 “What’s surprising to me is that NJ Transit entered into this agreement with one property owner, one developer, without talking to the city at all, without talking to other property owners,” she said.

“The process,” said Peter Kasabach, of NJ Future, “hasn’t been at all transparent.”

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Comments [3]

Rob Durchola

Re; Light Rail Station in northern Hoboken

If one goes back to the original plans for the Hudson-Bergen Light Rail line, one can see there was discussion about a station in northern Hoboken which, at the time, was undeveloped. The larger question is: Should NJ Transit pay for new rail lines and/or stations that primarily benefit a new development or should the developer(s). This applies to the northern Hoboken station. It should have been asked more strongly about the Meadowlands stadium station (only benefiting the Sports Complex and, if built, the American Dream ex-Xanadu mall). And it should apply to a proposed Town Center development along the Northeast Corridor in North Brunswick.

Feb. 27 2014 08:39 PM
Bill Wolfe from Bordentown, NJ

And on top of all that, we were:

1) the first to put Wolff & Samson attorney Lori Grifa's name in play - BEFORE Hoboken story broke - in a complaint we filed to the HUD Inspector General about, amount other things, revolving door abuses and political influence on expenditure and distribution of Sandy funds;

2) the first to put the NJ Transit $1.5 million contract with Wolff & Samson out there;

3) the first to connect the dots between Wolff & Samson lawyers; transition team policy recommendations; and financial benefits to W&S and clients;

4) the first to document and explain Wolff & Samson lobbying and preferential regulatory treatment.

Feb. 27 2014 12:20 PM
Bill Wolfe from Bordentown NJ

I see opportunism here.

Did NJ Future speak out and criticize NJ Transit and Corzine and Christie for what they knew war dirty deals and poor planning policies at the time they were happening?

I've been frustrated for a long time with the failure of NJ's professional planning community to speak out publicly.

Now that it's safe to do so, they pile on.

That puts real policy critics, like myself, in a bind - dismissed as partisans or bomb throwers or radicals. And after being proven correct time and time again, I still get relegated to the comment section.

Feb. 27 2014 12:13 PM

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