KEARNY –
The Town of Kearny is defending against two lawsuits, one protesting a proposed police-enforcement action, the other demanding the town take legal action to expedite a redevelopment project.
What triggered the first case was a town ordinance, which has been revised, re-introduced on March 28, and now slated for adoption April 11, expanding the licensing rules for “dealers in precious metals and secondhand goods” – essentially, pawnbrokers.
“The transactions regulated by this ordinance, because of the facility they furnish for the commission of crimes and for their concealment, belong to a class where the strictest police regulation is required,” the ordinance states.
The law would grant the chief of police discretionary power to determine who may or may not operate a pawnbroker business.
Under the law, in order to qualify for a license to operate, local pawnbrokers must install computer equipment and software to report all transactions to the KPD and to permit the KPD to inspect all items listed in a reported transaction.
The business owner must pay an initial $50 license fee and, thereafter, $250 for a renewal. Additionally, the owner “shall be required to pay whatever fees may be charged by the private entity which shall maintain the designated data base into which the reporting data is inputted.”
Also, for each transaction reported, the owner must “obtain acceptable identification from the seller, pawner or consignor and shall input the data requested into the (computer software) fields of entry ….”
The owner must “photograph the seller, pawner or consignor, photocopy his or her acceptable ID, photograph all the items sold, pawned or consigned … and … require each seller, pawner or consignor to execute a declaration of ownership.”
The owner must also retain items involved in transactions, “except for jewelry,” for inspection by police “for at least seven days from the date that the report of the transaction was received by the police department.”
Violations of the ordinance are punishable by hefty fines and/or imprisonment.
In a legal complaint filed Dec. 29, 2016, in Hudson County Superior Court, Daniel Markus, the owner of Perfect Pawn on Kearny Ave., just off the Belleville Pike, says Markus – “the only pawnbroker conducting business in Kearny” – has been operating as a “state-licensed” enterprise since 2011.
And, the complaint says, the state licensing procedure “represents an extensive scheme enacted by the State Legislature to regulate the pawnbroker industry.” And the legislature “has afforded sole regulatory authority [including licensing fees] over [that] industry to the N.J. Dept. of Banking & Insurance.”
By enacting its own law seeking to regulate local pawnbrokers, Kearny is overreaching its authority and would compel Marcus “to submit to a duplicative and inconsistent regulatory and licensing scheme,” the complaint says.
If the law is adopted, the complaint says, Marcus must apply to the police chief for a new license or face the possible loss of his business and stiff penalties. Additionally, the law would allow the town to invalidate Marcus’ state license and “force [him] out of business….”
Therefore, the complaint reasons, the law should be struck down as void and the court should “order a preliminary injunction with temporary restraints barring enforcement of such ordinance.”
The lawsuit was filed on behalf of Marcus by New York attorney Scott K. McClain.
In the second case, Hartz Mountain Industries, represented by Hackensack attorney Justin P. Walder, sued Kearny, also in Superior Court, on Feb. 24, asking the court to order the town to provide the company “with an estoppel certificate … containing specific terms as required by a third-party lender.”
The dispute focuses on a Bergen Ave. redevelopment project involving a potential client of Hartz, for which Hartz says it is seeking $19 million in financing from a lender, TIAA (Teachers Insurance and Annuity Association of America), which “has requested that Hartz provide it with an estoppel certificate from its landlord, Kearny, [which] serves … as a representation to a lender that the subject tenancy is in compliance,” the complaint says.
The estoppel certificate, Hartz’s complaint says, represents “that the tenant is not in default, the amount of rent being paid, the term of the tenancy, and that the lender will be entitled to step into the shoes of the lessee in the event of a foreclosure.”
“Hartz has requested that Kearny provide the [document] in a form satisfactory to [TIAA], but Kearny has refused to do so,” the complaint says, because of a separate lease agreement for a portion of the Bergen Ave. redevelopment parcel – (earmarked as the site of a Cummins Power Systems truck maintenance/training facility) – which agreement, Kearny feels, has been legally compromised.
The town’s refusal to comply is critical, the complaint says, because, “Without the estoppel agreement, [TIAA] will not close on the financing agreement, thereby … subjecting Hartz to increased and undue financial risk” because it will be “unable to lock into a loan rate with [TIAA]” and that “creates a cloud over Hartz’ leasehold interest in the Bergen Ave. parcel…”
“Since 1988 … Hartz has incurred costs in excess of $23 million to remediate and close the former landfill located on the Bergen Ave. parcel as well as to prepare the land and commence construction for the Cummins tenancy.”
At a recent council meeting, town attorney James Bruno told Hartz President/COO Constantino Milano that the matter would have to be settled through negotiations.
