From the Record:
A defiant EnCap denies obligation to pay state $16M
EnCap Golf Holdings, which failed to meet a Tuesday deadline for committing $16 million to ensure full cleanup of the Meadowlands landfills, has told the state it does not think it is obligated to hand over the money anytime soon.
The developer’s hardball stance produced a rebuke late Wednesday from Assistant Attorney General Robert A. Romano, who wrote that the New Jersey Meadowlands Commission “does not accept and rejects the assertions.” Romano added that state officials are “considering all their options” in light of EnCap’s stance.
The written jousting suggests that compromise between the state and the developer of the $500 million golf and housing project in Rutherford and Lyndhurst may now be difficult to achieve.
Governor Corzine already had suggested earlier on Wednesday that it might be time to look for a replacement for EnCap, which for two months has been stuck in default because of questions about a revised landfill remediation budget that has skyrocketed to $185 million.
But Corzine said he did not necessarily want to pull the plug immediately on EnCap, in spite of the missed deadline.
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The EnCap letter was sent late Tuesday night and received by state officials Wednesday. In it, EnCap attorney Eric Wisler wrote that “EnCap does not agree … as to the requirement that additional pre-completion security in the amount of $16 million be provided now.”Romano noted that was a sharp change in direction from several EnCap letters in recent weeks, each of which promised that a letter of credit would be provided by Kentucky-based First National Southern Bank.
Wisler wrote that EnCap had “a good faith belief” in the deal at the time, but that the terms subsequently had become unworkable.
“As such, all discussions with respect to that anticipated structure have ceased,” Wisler said, while also suggesting that a $55 million working capital loan with iStar Financial has stalled.