TRENTON – A former Chesterfield Township committeeman improperly used his government position in facilitating a private land deal through a transfer of development rights program that produced huge profits, state Comptroller Matthew Boxer said Tuesday in a new report by his office.
Throughout the whole process, Lawrence Durr shielded the fact that he personally had more than a million dollars at stake in the outcome, according to the report by the Comptroller’s office.
Boxer said the investigation highlights how weaknesses in current state law can leave local planning board decisions vulnerable to the personal interests of public officials.
“As towns across New Jersey start to rebuild in the wake of Sandy, it is vital that we protect the integrity of the process through which local planning boards make decisions about growth and development,” he said in a statement.
“As our investigation in Chesterfield shows, planning officials need to address potential conflicts carefully, and we need tougher penalties to deter public officials who would compromise planning decisions for personal gain.”
The Comptroller’s report recommends the maximum fine for a violation of the Local Government Ethics Law be increased from $500 to $10,000, consistent with the sanctions for state employees engaging in ethical misconduct.
The Comptroller concluded that Durr, who had been a longtime mayor of Chesterfield, violated the Local Government Ethics Law on several occasions in furthering a land deal involving the township’s Transfer of Development Rights (TDR) program.
The TDR program was designed as a tool for municipalities looking to preserve farmland and direct growth to more appropriate areas. Under the program, developers pay landowners the difference between what their land is worth as a farm and its value as developed property. That value is calculated in the form of TDR “credits.”
The landowners then agree to restrict development on the property and the developers use the credits they purchase to build in a separate area designated by the municipality for growth.
Durr took issue with the number of TDR credits assigned to property he had purchased in Chesterfield, according to the Comptroller’s report. In seeking additional credits, he represented himself before the local planning board of which he was a member and whose other members he had a role in appointing, the Comptroller reported.
The minutes of the proceeding reveal that he “stepped down” from the dais to make the presentation to his colleagues, was awarded an additional 10.25 credits and then “returned to the dais” to vote on other matters. The additional credits netted him $666,250, according to the investigation.
Even before he had been awarded the additional TDR credits, Durr had reached an agreement to sell his credits to a developer. However, the agreement still left the developer short of the number of credits it needed to proceed with its project, the report stated.
Durr, acting as Chesterfield Township’s representative, then intervened with a county entity and persuaded it to make additional credits available for sale to the developer, the Comptroller reported. Durr did not disclose his personal stake in the project. He took those steps despite previously having urged the county not to intervene when another developer had sought a similar arrangement, according to the report.
Later, in April 2007, when the developer with whom Durr had the pending contract sought a reduction in the number of credits it needed to proceed with its project, Durr made the necessary motion before the township committee and voted in favor, the report found. The approval of the amendment saved the developer more than $1 million.
Three months later, Durr closed on his sale of $2.37 million in TDR credits to the developer, the largest amount ever received by a Chesterfield landowner in the history of its TDR program. Durr’s 15-month investment yielded him a profit of nearly $200,000 as well as debt-free title to more than 100 acres of preserved farmland, the Comptroller’s report found.
Throughout the process, Durr never disclosed his financial agreement with the developer to local officials. He also failed to disclose the relationship on state financial disclosure forms designed to elicit such information, the report found.
“The integrity of any market-based system, including one involving TDRs, is dependent on the prevention of self-dealing by market insiders,” Boxer said. “What happened here is akin to insider trading. It is vital for the future credibility of TDR as a land use strategy that those responsible for its administration not use their privileged position for personal advantage.”