New Brunswick Today, Feb. 14, 2014
By Charlie Kratovil
NEW BRUNSWICK, NJ—A state government official confirmed this week that no press showed up to a September 23 event celebrating a controversial luxury highrise that received millions of dollars intended to aid victims of Hurricane Sandy.
As we reported last month, the luxury apartment building currently being erected at 135 Somerset Street received $4.8 million in federal disaster recovery funds. The questionable appropriation is just the latest in a long line of scandals haunting New Jersey’s embattled Governor Chris Christie.
On September 19, Christie visited New Brunswick to break ground on a large-scale redevelopment project at Rutgers, but four days later he was conspicuously absent from a similar ceremony for Boraie Development’s government-subsidized highrise just a few blocks away.
And Christie wasn’t the only one missing from the press event: Not a single reporter showed up, according to Department of Community Affairs (DCA) spokesperson Lisa Ryan.
"No reporters attended the groundbreaking despite calls to reporters in advance about the event," said Ryan.
City officials were also strangely absent from the groundbreaking.
A photograph of seven men in business suits lifting piles of dirt with ribbon-adorned shovels in front of a large construction crane is the only evidence that the event took place at all.
The photograph was included in an inaccurate press release Ryan says was circulated to the standard DCA email press list. As we reported last weekend, Ryan has admitted that there were two substantive errors in the release.
Conversely, the September 19 groundbreaking ceremony for the Rutgers project closed down a city block and offerred seating for more than 100 people.
That event featured a giant video screen and a powerful sound system, speeches from Christie and other public officials, and free food given to hundreds of passersby over the course of several hours.
The event received widespread media coverage, including a front-page story in the Star-Ledger, the state’s largest newspaper.
But, four days later, no journalists covered the Boraie groundbreaking on radio or television, and no articles appeared in print or on the internet. New Brunswick Today did not receive an invitation to the groundbreaking nor were we sent the press release.
Somerset Mews, the 16-story apartment complex being built by Boraie, received millions in government subsidies from the NJ Housing and Mortgage Finance Agency (HMFA), including a $60.5 million government loan, as well as $4.8 million in Sandy aid.
In exchange, Boraie agreed to rent 48 of the building’s 238 apartments at affordable rates.
But as we reported last week, Boraie had previously reneged on a promise they made to sell luxury condominiums at affordable prices in a 120-unit building that opened in 2006, with the help of a $15 million HMFA loan.
SIMILAR PROJECT IN NEWARK HAD BIG CEREMONY DAYS LATER
Four days after the quiet Somerset Mews groundbreaking, a wide range of media outlets converged at Rector Street in Newark for a star-studded ceremony for a similar Boraie project.
There, Boraie has obtained subsidies and government approvals to build a 23-story luxury apartment tower on the former site of a high school.
The event offerred dozens of folding chairs for those in attendance, as well as a podium and microphone, complete with renderings of the proposed highrise sitting on either side.
Among those in attendance were the leaders of Newark’s and Essex County’s government, and even a celebrity who has made a habit of working with Boraie.
Shaquille O’Neal, a retired basketball star, and Cory Booker, a political star in his own right, each spoke at the event.
Within a month of the groundbreaking, Booker was elected to be New Jersey’s next US Senator, and O’Neal was featured in a television ad endorsing Christie’s re-election.
Omar Boraie, the leader of the powerful real estate company that bears his name, referred to Newark as a "big, huge piece of diamond covered in mud over the years" in an interview with NJTV’s David Cruz after the groundbreaking.
According to the Newark Star-Ledger, Boraie’s son ironically said that he hoped the Newark highrise would disprove the need for "government-sponsored projects" at the event:
Wasseem Boraie, vice president at Boraie Development, said his company wanted to lay to rest the perception that “the only thing that works in Newark is affordable housing and government-sponsored projects. We didn’t believe that. The more we got into the city, the more we believed that high quality retail, high quality residential is more than possible in Newark.”
Unlike the New Brunswick project, the Newark building with the high-profile launch party did not receive Sandy-related funds. But both projects pulled down millions in tax credits from the state’s Economic Development Authority (EDA), and millions more in loans from the state.
The Newark project received $20.7 million in tax credits from the EDA’s Urban Transit Hub Tax Credit , while the New Brunswick project received $23.8 million in credits.
Only thirteen other residential projects in the entire state were approved under the tax credit program, which incentivizes building near certain train stations. The only other developer to secure two separate tax credits was New Brunswick Development Corporation, the company behind the Rutgers project.
BORAIE’S SANDY FUNDS WERE KEPT QUIET UNTIL AFTER ELECTION
Although the HMFA announced Boraie would receive the $4.8 million in Sandy funds in the misleading September 23 press announcement, the funding was not mentioned in media reports until NBC New York’s Chris Glorioso broke the story the evening of January 30, well after Gov. Christie had coasted to re-election.
New Brunswick Today picked up the story on January 31 and our article quickly became the most popular in our two-year existence, bringing down our website for several hours on Super Bowl Sunday.
Since then, NBToday raised questions about the track record of the developer, breaking the story on February 5 that Boraie had never built affordable housing, despite claims to the contrary in the DCA press release.
Two days later, NBToday received 12 pages of documents from DCA that showed the developer failed to meet its affordable housing obligation under three different gubernatorial administrations. Each time, the failure was ignored, or the deal was renegotiated.
In the end, despite Boraie’s promise of 12 brand-new downtown condominiums at affordable rates, no new affordable housing units were built and instead two rundown buildings that Boraie already owned were declared "affordable."
On Monday, the author of this article sent a nine-point information request to Ryan, reiterating unanswered questions about which lawyers have represented Boraie before the HMFA, the agency that awarded Boraie the $60.5 million loan and the $4.8 million in hurricane relief funds.
NBToday reported this week that the law firm of embattled Port Authority Chairman David Samson, one of Gov. Christie’s closest allies, served as bond counsel for Boraie’s EDA loan on the Newark project.
Three hours after our written request for information, Ryan emailed to tell us that calls were made to reporters about the September 23 press event and the inaccurate press release was sent out to the regular DCA list.
"I’ll get back to you on your other questions. It likely won’t be today, but I’ll keep you posted," Ryan wrote.
This morning, the author of this article again sent the unanswered questions to Ryan, along with more than a dozen new ones. Ryan has not yet responded.
As we reported in 2013, the owner of Boraie Development, through an attorney, threatened to sue the author of this article for writing about his extensive political donations.
