Boro, YMCA agree: No sale, no suit
Resident asks state AG to investigate sale of historic bldg.
BY MELISSA KARSH Staff Writer

RED BANK- A"cease fire" agreement has been reached between borough officials and Community YMCA representatives over the sale of a historicMonmouth Street building.

The CYMCA's Children's Cultural Center, 51 Monmouth St., which the borough sold to the Y for $1 in 2000, is on the market for $2.5 million.

"We've reached an agreement whereby we're [the borough] not going to file suit, and they're [the Y] not going to sell a contract on the building until we've had a chance to sit down and talk about this thing," said Assistant Borough Attorney Thomas Hall.

To assist with the negotiation process the CYMCA has hired attorney James A. Paone of Lomurro, Davison, Eastman and Munoz, Freehold.

"Both sides are talking and we're hopeful that we can come to some sort of agreement," said Paone March 6.

Paone said he would not comment on the substance of the negotiations but did say that CYMCAofficials hired himinmid- February.

Before the channels of communication were opened, the mayor and Borough Council gaveHall the go-ahead to file a lawsuit against the CYMCA Feb. 27 after an executive session discussion of the terms of the sale.

"We're hopeful that we're going to be able to resolve the whole thing," saidHall of the negotiations.

He added, "We are going to sit down and talk about whether or not there is still a charitable use restriction on the building and we are going to talk about the construction issues. It's going to come down to money when all is said and done."

Red Bank Historic Preservation Commission Chairman George Bowden previously said the building was added to the National Register of Historic Places in 1980, and in a 1981 write-up it was referred to as the best remaining 19th-century town hall in Monmouth County.

The building was the site of the Shrewsbury Town Hall before Red Bank became a separate borough, according to Bowden.

Although now in the hands of the CYMCA, Red Bank originally sold the circa-1892 building to KidsBridge, which was the organization that called the space home before the Children's Cultural Center succeeded that program. The Children's Cultural Center became a branch of the CYMCA in 2002.

According to a listing on the Red Bank Visitor CenterWeb site, Red Bank sold the Children's Cultural Center in 2000 for $1, with the stipulation that it never be used for any other purpose.

Although the Web site notes a reverter clause was attached with the sale of the property, the ordinance that references the reverter clause was not cited in theApril 11, 2000, sales contract, which was signed by then-council President PasqualeMenna, the borough's current mayor.

Red Bank resident Stephen M. Fitzpatrick announced to council at the March 10meeting that he had sent a letter to the office of stateAttorneyGeneralAnneMilgram requesting a reviewof the legality of the sale of the building.

"The issue, which I address is the sale of the land and the building in April 2000," Fitzpatrick wrote in his March 10 letter to Milgram. "I amrespectfully requesting a review of this matter and the application of New Jersey law to this sale of public property by themunicipality.Without the appropriate language and referenced lawtheApril 2000 contract of sale appears to be illegal."

According to ordinance 1999-29, "The building shall be the subject of historic restoration in accordance with plans and specifications to be approved by the borough, and further, the building shall be used only for educational, recreational, cultural and similar purposes to promote the generalwelfare of the community, and shall not be used for any commercial, trade ormanufacturing enterprise, nor for any political, partisan, sectarian, denominational or religious purpose; and whereas such sale shall be conditional upon the fact that should the lands or buildings not be used in accordancewith the above limitation, title thereto shall revert back to the borough of Red Bank."

A reverter clause stipulates that once a property is sold and the conditions of the sale are not complied with, the property may revert back to the seller, explained Hall.

Fitzpatrick said in his letter that the protective provisions thatwere spelled out in ordinance 1999-29 were not included in the two subsequent ordinances, 1999-38 and -42, whichwere the two ordinances referenced in theApril 2000 sales contract.

According toHall, the boroughwithdrew the reverter clause from the original ordinance, 1999-29, during the building negotiationswithKidsBridge, to facilitate financing of the project.

"The borough enacted a bond ordinance …and the original ideawasKidsBridgewas going to go out…and…try and get financing from public sources."

Hall said the groupwas unable to get sufficient financing and the borough didn't have the ability to fund the entire project, so Kids Bridge looked to private financing.

"We are going to get private funding to finance this but no bank in the world is going to finance money if we have a reverter [clause],' so they took out the reverter [clause]," said Hall.

The two ordinances referenced in the sales contract, 1999-38 and 1999-42, did not include any of the language that was included in the first ordinance, 1999-29, passed in July 1999.

"The issue now is whether or not there is still a charitable use restriction on the building andwhat are the borough's options," said Hall.

A charitable use restriction stipulates that if the building is sold, it has to be sold to another publicly beneficial or charitable use, according to Hall.

The construction issues include negotiating the borough's monetary contribution to the CYMCAfor past work done to the Relief Engine Company, which is attached to the Monmouth Street building, said Hall.

"[There is] dispute as to what the borough's contribution to the firehouse work should be so that's going to come down to money [to determine]what's the value of the work performed on the firehouse," saidHall.

The Children's Cultural Center building is assessed at $1,864,900, according to the Red Bank tax assessor.

The building had been renovated in 2005 at a cost ofmore than $3million for the total renovations, which began before the CYMCAmoved into the building, according to Pamela L. Ortman, CYMCA director of communications and special events.