Even as Union County officials began the planning for a massive new government complex in Elizabeth, the project seemed like a done deal.
There was no public bidding for the contracts, which went to a hand-picked group of companies at a cost to taxpayers of $123.8 million.
The project manager for the Union County Improvement Authority — who also serves as the county’s finance director — recommended the selection of one of the architects as well as the construction manager responsible for protecting the authority’s best interests during the project, according to court depositions. Those associated with the two companies later contributed thousands of dollars to her failed election campaign for state Assembly.
And a law partner of New Jersey Assembly Speaker Craig Coughlin, D-Middlesex, serves as redevelopment counsel to the authority. To date, the firm — whose members last year contributed $50,700 to the Union County Democratic Committee as well as several county election campaigns — has so far billed $312,116 for its work on the proposed new complex, records show.
The project is now being challenged by one of the companies that was denied the deal. It went to court, claiming that the authority skirted state public bidding statutes intended as a bulwark against corruption, favoritism or excessive costs when it awarded the contracts for the project — a charge that county officials deny.
“We hired the best person for the job,” said Ed Oatman, the Union County manager. “I’m secure in saying that.”
However, legal filings tied to the court case — and an examination of the county improvement authority overseeing the job — raise questions about why the project was set up to avoid public bidding requirements, and how the decisions were made regarding who was hired to build it.
Bruce Paterson, an outspoken critic of the county, called it “the biggest botched up bidding process ever,” charging that the project had been “left up to unknown people behind closed doors” to pick the winner. Paterson — with decades of experience in cost engineering and bidding — claimed in complaints filed with the state that the county specifically designed the project so that it could only go toward a favored contractor who was politically connected.
“They are running a con game with the politically connected at the taxpayer expense,” he said.
A New Jersey appeals court, meanwhile, has already signaled that the path the UCIA took to avoid the awarding of a contract to the lowest qualified bidder, as is typical, may not have been what the Legislature intended when it carved out exceptions to the state’s bidding laws.
MAKING THE DEAL
Dobco Group of Wayne was among the five firms that sought to compete for the Union County government complex project.
Dobco’s proposal carried one of the lowest prices, records show. But the committee members who assessed the applications — a group that included Oatman and county finance director Bibi Taylor, who also serves as the improvement authority’s project manager — did not score the firm as well in other categories.
Knocked out of consideration on the first round, Dobco was not invited back for an interview and lawyers for the firm took the improvement authority to court.
In its complaint filed in February, Dobco did not take aim at donations, but targeted the county’s decision not to solicit sealed bids. It argued that state law required every contract awarded by counties or their improvement authorities, with few exceptions, be awarded to the lowest responsible bidder after public advertising. The UCIA, it said, had violated the law.
The Union County Improvement Authority responded that it had done nothing improper, adding that Dobco had voluntarily participated without objection in the process set up by the county, and charged that it only turned to the courts in an effort to “reinsert themselves into the selection process.”
However, Dobco’s claim that the use of public funds to construct public facilities obligated the authority to comply with public bidding requirements later gained traction in court, with a ruling on a related complaint by the firm against the Bergen County Improvement Authority.
In that case, the county also sought to select a contractor based on scoring criteria, as part of an $80 million renovation of the historic Bergen County Justice Center. It said that the process ensured “the best quality work, results in the least costs and provides the greatest benefits to taxpayers.”
An appeals court didn’t agree.
While Union County has repeatedly prevailed before a Superior Court judge in its efforts to keep the project going, the Appellate Division will soon hear the matter and issue a ruling that could stop it in its tracks. Dobco officials declined comment.
Even before the construction firm went to court, though, others were raising similar concerns over the bidding process. Paterson filed complaints with the state comptroller and other agencies after he got copies of the project specifications that were provided to the companies vying for the project.
He called it replete with incomplete specifications, a flawed planning and construction schedule “with no basis in reality,” and questioned why it was being overseen by the county’s financial director — who had no experience with construction projects. He claimed the county sent out bid specifications and then suddenly changed them near the end of the bid
County officials did not respond directly to most of Paterson’s allegations. But Oatman said the assertion that the original documents regarding the project’s scope had been suddenly changed was incorrect.
Big money and politics never seem far away from decisions in New Jersey, especially when lucrative public contracts and professional services are being doled out.
Lee Seglem, the now-retired executive director of the State Commission of Investigation, has seen his share of cases over the years involving government contracts that were clearly steered to favored vendors — not by way of heavy-handed illegality, he said, but by “subtle manipulation of the procurement documents” in advance of a contract award.
“Aside from outright bribery and other forms of standard blunt-instrument corruption, which I think is fairly rare, there is an assortment of nuanced strategies that can be employed to circumvent the competitive bidding process in New Jersey, particularly at the local level,” he observed.
The current Union County Administration Building in Elizabeth. NJ Advance Media photo
County improvement authorities such as the UCIA exist to build things. They help finance, construct, and operate projects such as new buildings, parks, courthouses, campus facilities and parking decks.
But the authorities also operate largely behind the scenes.
“They are called invisible governments because, broadly speaking, the general public has little knowledge of them and their powers,” said David L. Carr, professor emeritus of political science at Stockton University who has studied the state’s independent authorities.
Critics say the nature of such agencies makes them more vulnerable to political influence, not less, while providing a way to hide lucrative contracts from greater public scrutiny.
Indeed, politics has long been part of the DNA of the Union County Improvement Authority.
For more than a decade, the agency was headed by the late Charlotte DeFilippo, who also chaired the county Democratic Committee and ran the UCIA from her home and was paid $160,000 per year.
Until his recent retirement, the county’s spokesman served as the authority’s chairman. A former freeholder replaced DeFilippo as executive director for a time. The UCIA is currently being run by Taylor, the wife of former East Orange Mayor Lester Taylor whose law firm also has contracts with the county. Also serving as the county’s finance director, she is paid an additional $5,000 a month to serve as the UCIA’s “project manager,” in addition her current $160,000-a-year county salary.
The UCIA by its nature is a confluence of lucrative contracts and contractors. It awards millions to retain construction and engineering firms, lawyers and architects — many of which would donate hundreds of thousands over the years to the coffers of the Union County Democrats under DeFilippo.
They still do.
Last year, more than $100,000 in political contributions from law firms, architects, engineering companies and others that do business with the county was given to Democratic candidates in the county, campaign finance records show.
And even before the major contracts for county complex were awarded, several no-bid preliminary planning contracts for the project were handed out to a number of major campaign contributors, state filings show.
The Union County project had been in the planning for years.
“Cost savings and efficiency of services,” Oatman replied when asked about the rationale for the big project, noting that much of it had to do with the long-term leases for office space being used by various agencies in downtown Elizabeth.
The county sought to get out of those leases, moving those offices into a new two-building complex that would be built on the site of a long-defunct Cadillac-Oldsmobile dealership on West Grand Street, alongside the Elizabeth River. The relocation would save the public more than $6 million a year in annual lease payments, according to a March 2020 analysis conducted for the county. (Curiously, the county is separately considering buying another of its leased buildings at 921 Elizabeth Avenue outright for $7 million, according to recently filed legal notices.)
That savings, though, would come at a price. That same 2020 report estimated the new complex would cost $115 million — $8.8 million less than the current price tag.
Early on, the Union County Improvement Authority opted to forego the traditional public bidding process to award contracts for the construction as required by New Jersey’s Local Public Contracts Law. The loophole it used was to classify the project as a redevelopment effort, with the private contractor ultimately given the job named as a redeveloper.
The authority then issued requests for proposals for the design and construction of the project through the state’s Local Redevelopment and Housing Law. Applicants would be scored not just on price, but graded in areas such as expertise, financial strength, diversity and other factors.
Contracts were then awarded through a selection committee.
Other improvement authorities in the state, including in Bergen County, had taken a similar path in using redevelopment statutes to avoid public bidding requirements, although it had never been tested in the courts.
By foregoing sealed public bids, Oatman said the UCIA had the ability to negotiate construction project terms, eliminate cost overruns, cap the maximum project cost, and pick what he said was the most qualified company to handle the construction.
MONEY AND POLITICS
Union County officials deny that money, contributions or political connections played any role in the contracting for the improvement authority’s latest endeavor.
“We follow all state and county laws, said David Minchello, who serves as counsel to the Union County Improvement Authority, refuting any suggestion that anybody had an edge. He noted that neither the lead contractor on the government complex, Terminal Construction, nor its principals, gave money to any Union County political candidates.
“I fail to see the connection,” Minchello said.
Campaign finance reports filed with the state Election Law Enforcement Commission do in fact show that those associated with Terminal this past year did not contribute anything to county political campaign or committees in Union. Terminal did not respond to requests for comment.
But that doesn’t tell the whole story. Others awarded contracts in connection with the UCIA project were major donors to the Union County Democratic Committee and to candidates in the county.
They include Minchello’s law firm, Rainone Coughlin Minchello — whose partner is state Assembly Speaker Craig Coughlin. Minchello said he had been doing municipal and government law in the county long before he joined the firm, although he began representing the improvement authority afterwards.
In the case of Taylor, campaign contributions came from DIGroup Architecture of New Brunswick, which was solicited directly by the authority and awarded a $1.8 million no-bid design contract, according to a September 2020 resolution, and from Mast Construction of Little Falls, which was selected by the authority as the construction manager or “owners’ representative” without public bids and received a $1 million contract, according to a March 2021 UCIA resolution.
Taylor received donations of $15,600 from six members of DIGroup or their spouses, Politico first reported.
Asked in an interview why DIGroup was retained, Taylor said she had known the company for over 20 years and part of the scope of the charge overall from the county was to diversify the vendor pool.
“So, yes, I introduced them to the improvement authority commissioners as well as to the county. Based upon their qualifications, they were selected to prepare bridging documents, and they prepared them in a short turnaround time, within budget,” she said. “They have a history of being able to complete large projects and if you look even the track record in this case, they were able to perform a deliverable, consistent with everyone’s expectations.”
Taylor would not answer whether she thought in retrospect that the contributions might have been a mistake.
“I have nothing else,” she responded.
According to her state filings, her campaign — which only spent $23,345 of the $82,350 it raised, gave $8,000 in April to the legislative race of state Sen. Nicholas Scutari, D-Union, who chairs the Union County Democratic Committee and has been named the new Senate president.
Bibi Taylor, the Union County finance director and project manager for the county’s improvement authority. Star-Ledger file photo
DIGroup president and chief financial officer Vince Myers acknowledged that he had known Taylor before his company was retained — dating back to when she was on the Board of Education in East Orange and he was retained to do a design-build project. But he disputed that DIGroup’s selection was in any way political or the result of a friendship.
“She knows about the capabilities of the firm and what we can do,” he said, noting that the firm also brought needed diversity to a major government contract as a minority owned business. “She contacted me and asked if I was interested in submitting qualifications for the project. I had not spoken to her for 15 years,” he said.
He added that it was the improvement authority commissioners who decided to hire the firm, not Taylor.
As far as the campaign contributions to Taylor were concerned, Myers said she asked for his support.
“She didn’t twist my arm or anything…I knew her. I talked to my partners. Here was an African American woman running for office and we made a decision to support her,” he said. “But it’s not what got us the work. What got us the work is that we are professionals.”
Mast Construction Services of Little Falls also donated $2,600 to Taylor’s campaign in late February. The company has given $83,850 to Union County and legislative campaigns in the county since it was founded in 2001, and $293,575 over that same period of time to campaigns statewide, according to state Election Law Enforcement Commission.
“I support good government,” said Ted Domuracki, Mast Construction’s president and principal in charge. He added that there was nothing improper about the $2,600 his firm contributed to Taylor’s Assembly campaign. “I got called by the campaign and made a contribution that was in compliance.”
Oatman said DIGroup was first appointed in September 2020 by the improvement authority commissioners in consultation with county officials to prepare documents for the proposed government complex. Both DIG and Mast were appointed by the commissioners, in consultation with county officials.
“Mrs. Taylor was not part of the pre-qualification review team, nor does she vote on contracts,” he said. None of the contracts were based on political contributions, said the county manager.
“And you can quote me all day on that,” he said. “There was no quid pro quo.”
For now, the project is in somewhat of a limbo.
The 120,000-square-foot site where it is to be built is nothing more than big piles of rubble from the old buildings that once stood there. Two hulking orange-colored excavators sit off to one side.
Demolition has gotten underway at the project site, but actual construction is in limbo as the matter continues to be argued in court. NJ Advance Media
After the county was challenged in court over the decision not to publicly bid, Union was unable to go to the bond markets to borrow money. So officials began putting up millions in direct funding from the county to begin the work, and then argued before a judge that the work couldn’t be stopped because the redevelopment effort was already in play. The Appellate Division last month, however, put a stop to anything but the preliminary design work and the ongoing demolition. Records show the county has already spent more than $9.3 million on the complex.
Separately, the New Jersey Supreme Court has agreed to hear an appeal of the Bergen County decision that favored Dobco’s argument.
Attached to the fence encircling the construction site on West Grand Street in Elizabeth is a sign announcing the project, with a rendering of the building and the names of the utility authority commissioners.
It proclaims: “Coming soon.”
How soon is anyone’s guess.
Our journalism needs your support. Please subscribe today to NJ.com.
Ted Sherman may be reached at [email protected]. Follow him on Twitter @TedShermanSL.