Bergen County, New Jersey: State probe found Edgewater officials “abdicated their sworn responsibilities” to the borough

A state investigation released last week found that elected and appointed officials actively worked to benefit a prominent Bergen County developer, confirming claims made by another developer in a lawsuit years ago.

The New Jersey State Commission of Investigation report outlined how many Edgewater officials had connections to Fred Daibes, a local developer with property along the Hudson River, and that some of the ties included business contracts and, in one case, discounted rent for a luxury apartment.

Accusations, lawsuits and the most recent investigation have tied up the borough and its officials for years. Why and when did the trouble start?

Story behind the state investigation
In 2017, 615 River Road Partners, LLC, filed a complaint in federal court against the borough, claiming officials had blocked it from building on its site on River Road because of the influence exerted by Daibes.

The developer did not respond to requests for comment regarding the findings of the investigation.

The complaint alleged that numerous officials — including the mayor and several Borough Council and zoning board members — receive cash payments, employment in enterprises linked to Daibes, or other favors from Daibes-owned businesses, such as apartments for below-market rent.

‘Abdicated their sworn responsibilities’
In 2018, Daibes and a business associate were indicted in federal court on multiple counts in an alleged conspiracy to circumvent lending limits set by Mariner’s Bank, which Daibes founded in 2001. He has since pleaded guilty.

“The commission’s investigation found borough officials repeatedly abdicated their sworn responsibilities to safeguard public tax monies and the interests of all residents, to protect their own personal and financial concerns and those of private developer Fred Daibes,” the report said.

The 18.7-acre former Hess oil terminal on River Road is the last piece of land to be developed along the Hudson River. A settlement agreement was reached with the borough in 2019 despite new lawsuits for the developers popping up and delaying future construction.

In 2018, court documents showed Daibes’ close involvement with the future of the property, which was once considered to be part of an eminent domain plan and home to a public works facility instead of benefiting from tax ratables from a development.

Court documents showed that in 2017, zoning board member Jeffrey Mathieu sent an email to Daibes asking for his opinion on the rival development, which was due before the board.

“I would like to know your take on the Hess application coming before us on September 12,” Mathieu wrote.

Daibes replied: “I’m not in favor of the project at all.”

The emails and rent totals for public officials in Daibes’ buildings are among several documents included as evidence in a federal lawsuit accusing borough officials of conspiring with Daibes to drive out competitors.

Edgewater Mayor Michael McPartland informed the town of the state probe in his New Year report in January. “The New Jersey State Commission of Investigation has been investigating the slanderous and defamatory accusations made by the 615 Partners, owners of the former Hess site,” he wrote on the borough website.

McPartland referred to his official statement in the state’s investigation report for his comment. In a letter dated March 17, he denied any wrongdoing and noted that he has known Daibes for 50 years. In his statement he said he has “never provided Mr. Daibes with any benefit he was not otherwise entitled to” and that he takes “serious offense at the innuendo that I have.”

He also said the rent incentives at the time of the new Daibes-owned apartment building were offered to everyone to increase the occupancy of the building.

“The truth is I have paid every dollar I owed for all of the time I have been at the Alexander. I never received any free rent,” McPartland said.

Other lawsuits
Despite the settlement with the borough, other lawsuits have prevented work from proceeding at 615 River Road.

Last year, multiple lawsuits were filed claiming the borough was “strong-armed” into the settlement agreement to avoid revealing its conflicts of interest with Daibes.

One lawsuit by Windsor Cove Associates LLC also cites conflicts of interest, saying the mayor and council were “eager” to enter into the settlement agreement “so there would never be a trial at which evidence of such conflicts would ever see the light of day.”

Windsor Cove Associates owns two parcels of land in Edgewater. According to tax records, the properties are also owned by J. Demetrakis. The postal address for Windsor Cove Associates is the same as that of attorney David Carmel, who filed the lawsuit in state Superior Court in Bergen County. The address for both is 1 Bridge Plaza, Suite 519, in Fort Lee.

James Demetrakis, the luxury high-rise developer who helped transform Bergen County’s Hudson River Gold Coast, avoided prison in 2019 when a judge sentenced him to two years’ probation for a loan scheme that also entangled Daibes, his business partner.

Demetrakis also was assessed a $75,000 fine for allegedly conspiring to defraud Mariner’s Bank, the Bergen County-based lender founded by Daibes.

Additional lawsuits were filed by SoJo Spa and Cliffside Park, which claimed the development would block their views. The borough attorney said that litigation was decided in favor of the developer and is currently in the appeals process with no current court date set.

A third lawsuit was filed against 615 River Road and the Edgewater Zoning Board of Adjustment last year by former council candidate Erik DiMarco claiming proper notice wasn’t given to the surrounding property owners and for the meeting hearings.