Attorneys will check out
potential redevelopers
Due diligence will
be conducted as
negotiations proceed
By mark rosman
Staff Writer

MARLBORO — The North Jersey law firm handling negotiations for the planned purchase of the Route 520 property that formerly housed the Marlboro State Psychiatric Hospital will conduct due diligence checks of potential redevelopers.

As Marlboro officials and their attorneys continue to negotiate with state representatives for the purchase of the 400-acre hospital property, the time has come for checks to be made of the corporations or groups that could be selected to redevelop it if the town is successful in its bid, said Steph-anie Luftglass, the town’s public information officer.

At a Township Council meeting held Dec. 6, officials passed a resolution authorizing the law firm of DeCotiis, Fitzpatrick, Gluck and Cole, of Teaneck, to perform the due diligence services.

The firm, which earlier this year was appointed as Marlboro’s representative in negotiations with the state for the hospital property, will be paid $150 per hour to perform the due diligence services.

There is a maximum expenditure of $5,000 for those services before additional work would have to be approved by the council.

Essentially, the legal firm will conduct background checks of the groups that have expressed serious interest in redeveloping the hospital property.

Luftglass said that since municipal officials expressed a desire to purchase the property, between 13 and 15 proposals have been made by potential redevelopers.

She said these plans have been consistent and inconsistent with the redevelopment plan for the hospital property that the council has adopted.

Marlboro’s approved redevelopment plan for the hospital property sets forth the following goals:

• to find ratables that will help reduce the property tax burden on Marlboro residents;

• to preserve as much open space as possible at the 400-acre hospital site and preserve the architectural integrity of as many of the existing hospital buildings as possible;

• to protect the potable water supply as well as the site’s natural resources and environmentally sensitive areas;

• to set aside 40 to 50 acres of the acquired hospital property for future municipal use (municipal use could include a school);

• to boost the economy by replacing some of the jobs that were lost through the closing of the hospital and creating new jobs through the development of corporate and/or commercial enterprises.

Marlboro officials have said the redevelopment of the hospital property could include a mix of residential, commercial, retail and municipal uses.

According to a letter from attorney Jonathan L. Williams of the DeCotiis firm to Mayor Matthew Scannapieco and council members, the firm, in performing due diligence, would require documentation concerning a developer’s experience with similar projects. The firm would also request and analyze various documents in order to assess the financial integrity of the developer, Williams said.

An example of some of the types of documentation requested would include:

• financial statements for the past three years of operation;

• evidence of the developer’s ability to obtain project financing;

• any information concerning material changes in the mode of conducting business, bankruptcy proceedings, and mergers or acquisitions within the past three years, including comparable information for related companies and principals of companies, and any actual, threatened and pending litigation in which the developer is involved;

• a description of all major financial commitments presently outstanding and their bearing on the developer’s financial ability to undertake the project.

In conjunction with hiring the DeCotiis firm to conduct the due diligence services, the council extended a Memorandum of Understanding with the state for an additional six months. The memorandum, initially signed on Jan. 12, concerns the acquisition of the hospital property. The initial memorandum expired on May 24 and was extended with the consent of both parties until Nov. 24. It will now be extended through May 2002.

Luftglass said the extended memorandum will allow negotiations to continue between Marlboro representatives and the state. No date has been set for the next negotiating session, she said.