Non-Profit Sues Jersey City Over Their Cancelled Redevelopment Project

408 420 Communipaw Avenue
408-420 Communipaw Avenue in Jersey City as seen in June 2015. Via Google Maps.

The battle over a vacant lot on Communipaw Avenue in Jersey City has spilled into the courtroom as a local non-profit alleges their approved development was terminated in favor of a possible luxury high-rise.

On April 1, the Morris Canal Community Development Corporation (MCCDC) filed a lawsuit against the Jersey City Redevelopment Agency (JCRA) over the future of a parcel at 408-420 Communipaw Avenue. Per our reporting from late 2017, the MCCDC was granted planning board approval to construct a 46-unit development with 10 affordable housing units on the site.

408 420 Communipaw Ave Jersey City Rendering
Rendering of the contested project. Image via the Morris Canal Community Development Corporation’s website.

The MCCDC executed a redevelopment with the JCRA in May 2018 and received a $2.1 million affordable housing grant from the Jersey City Division of Community Development shortly thereafter. But the lawsuit claims problems began in September that year when the MCCDC notified the JCRA about underground storage tanks present on the land.

The complaint says that the JCRA waited until May 2019 to assign a Licensed Site Remediation Professional to investigate environmental issues at the land, the first of several alleged delays. The suit additionally argues that Jersey City “inadvertently” sold a parcel at 199 Woodward Street to a third party that was included in their 46-unit development, forcing them to change their plans.

Rather than further delay the development, the lawsuit says the MCCDC redesigned the project and gained new approvals from Jersey City’s planning board. But the city then allegedly “re-acquired” the Woodard parcel and “MCCDC was required to make a second application to the Planning Board…inclusive of the Woodward Parcel.”

The MCCDC claims that the upheaval increased the project’s cost by $400,000, delays that led to financial strain. The lawsuit alleges that the non-profit was forced to find a new financing partner, but the JCRA supposedly told them in an October 2021 letter that their “proposed joint venture would not be acceptable.”

The JCRA’s position, according to the lawsuit, “contended that MCCDC’s recent proposal of assigning the Agreement to a proposed joint venture constituted a prohibited transfer.” The agency additionally claimed that “the [Jersey City Division of Community Development] is not willing to assign the conditional [Affordable Housing Trust Fund] grant to the proposed [joint venturer] where the project has been changed to a for-profit rental venture.”

The MCCDC says they submitted another joint venture partner for consideration earlier this year that the JCRA also rejected. The litigation claims that the agency has a larger project with another company in mind at the property, but the filing does not specifically name any additional defendant.

“Rather than have MCCDC develop the premises with the Project, JCRA has been and is currently seeking to have the [property] developed by other persons or entities…for luxury housing in a high-rise development,” the lawsuit says.

When contacted by Jersey Digs, city press secretary Kim Wallace-Scalcione noted that the MCCDC has been trying to develop the property since 2003 and has had several previous agreements to do so in place that never came to fruition.

“Instead of building the project, they have spent the past two decades conspiring to reduce their affordable housing requirements and skirt their federally mandated environmental remediation obligations,” Wallace-Scalcione said. “Now, to add insult to injury, the MCCDC leadership wants to turn the non-profit community development project into a for-profit development project.”

“The fact is, they disqualified themselves, and the city has no interest in working with a developer who breaks contracts and refuses to prioritize the community for their own for-profit benefit,” she added.


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