Newspaper article The Record (Bergen County, NJ)

Housing 'Debacle' Angers Judge

Newspaper article The Record (Bergen County, NJ)

Housing 'Debacle' Angers Judge

Article excerpt

PASSAIC -- Lawyers representing a developer and a city councilwoman who signed off on a failed public housing development got a tongue-lashing from a state judge for delaying a settlement in a protracted legal battle that has cost Passaic taxpayers about $1 million.

Superior Court Judge Margaret McVeigh reserved her sharpest criticism for Thania Melo, the councilwoman, for not appearing at the hearing Wednesday, and for failing for more than a year to respond to subpoenas to appear in court.

The judge became angry when lawyers representing Melo and Euddy Guiliani, the developer of the Paulison Avenue lot that remains largely vacant, suddenly showed up and pleaded for more time to prepare as the matter was close to being settled.

The city spent nearly $1 million of taxpayers' money to support the promised affordable housing at 417 Paulison Ave., yet the lot remains vacant, and a 17-month legal fight drags on.

Passaic is one of the poorest cities in the state, and demand for affordable housing is acute. The non-profit Upper Monroe Street Improvement Corp., with Guiliani as its developer, signed an agreement with the city in August of 2011 to build eight low-income units on the Paulison Avenue lot.

The project was the second phase of a two-part deal. The first phase was a $1.5 million investment the city had made at a completed seven-unit condominium at 277 Broadway, known as Liberty Estates. The non-profit corporation was hired to market the Liberty Estates units, and after returning a portion of the proceeds to the city, was supposed to use the funds to help finance construction on Paulison Avenue.

The agreement called for Guiliani to secure a bank loan for the Paulison project. The Broadway units, each of which had a market value of $325,000, were subsidized with federal funds to allow qualified low-income buyers to get them for $125,000. But for reasons that remain unclear, the corporation was slow to find buyers. Guiliani never secured the bank loan, and the Paulison project ground to a halt.

Despite receiving millions of federal dollars, the corporation hasn't filed a financial disclosure form since 2005 and is now barred from receiving public money, records show. Earlier this year, The Record filed a public records request seeking the corporation's financial records, as well as a list of its board of directors. The city never supplied any records.

Both Melo and Guiliani are listed as members of the corporation on the mortgage papers for the Paulison property. …

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