A pair of lawsuits seeking to halt a renovation of the New Jersey state house should be dismissed as moot, attorneys for Gov. Chris Christie argued Wednesday, because it’s already a done deal.
Christie’s lawyers argued before Superior Court Judge Mary Jacobson that $300 million in bonds for the project were sold shortly after the state Economic Development Authority voted to approve them on Thursday, making the state house renovation a fait accompli.
“There’s nothing left to say about it,” Christie told reporters at an event in Newark on Wednesday. “It was done in a completely proper, legal way. It needs to be done. And all the people who are doing the stuff they’re doing, there’s nothing more than press releases with a legal caption on it.”
He added, “My job is to make sure that that building is preserved for historical purposes, and is a functional, operating office building that’s safe and appropriate for the people who work there every day.”
The price tag on the renovation, however, has drawn payloads of criticism from Democrats and Republicans, including Christie’s lieutenant governor, Kim Guadagno, who is in the race to succeed him this year. Borrowing costs could range from $20 million to $25 million a year, according to rough estimates from the state Treasury Department, which critics say would drive up the real cost to taxpayers from $300 million to as much as $750 million.
State Sen. Ray Lesniak (D-Union) and Assemblyman John Wisniewski (D-Middlesex) said the Christie administration fast-tracked the bond sale on Thursday to avoid scrutiny by the courts, since they knew lawsuits were coming.
Lesniak and Wisniewski are both seeking the Democratic nomination for governor and filed separate lawsuits arguing that the financial arrangement through the EDA was designed to thwart the Legislature and voters from having a say, a violation of the state constitution. Christie’s attorneys argued to dismiss both complaints as moot during a case management conference over the phone with Jacobson on Wednesday, they said.
The governor’s lawyers at the state Attorney General’s Office declined to comment Wednesday.
Wisniewski said it was unusual for the EDA to execute a bond sale so closely after voting to approve the financing. The Christie administration “deliberately undertook a course of conduct that would prevent the court from deciding the legality and constitutionality of their actions,” he said.
“This is absolutely shameful,” Lesniak said. “This is like the Trump administration, going around the law in secrecy and keeping things from the public that the public has a right to know.”
Sens. Kip Bateman (R-Somerset) and Mike Doherty (R-Warren), who joined Lesniak’s lawsuit, also blasted Christie on Wednesday.
“In an effort to avoid transparency and accountability, the governor must have set a new record for the speed with which bonds were sold after the NJEDA rubber stamped his expensive renovation plan,” Doherty said. Bateman said the Christie administration arranged the deal in such a way as to “stifle any opportunity to dissent.”
Jacobson rejected the Christie administration’s arguments to dismiss the case on Wednesday and ordered all sides to file briefs – Christie by May 26, Lesniak and Wisniewski by June 2. She scheduled a hearing for June 14 in Trenton.
“On May 11, the state took all required steps to effectuate and close the Economic Development Authority’s direct purchase bond issuance to fund the state house restoration,” said Willem Rijksen, a spokesman for the Treasury Department. “The bond issuance was legal and appropriate.”
An EDA spokeswoman said a memorandum made public on Thursday at 10 a.m., at the start of the authority’s monthly board meeting, clearly stated that the bonds were being sold to RBC Capital Markets. “The bonds closed at approximately 1:30 p.m.,” said the spokeswoman, Virginia Pellerin.
Lesniak and Wisniewski both acknowledged Wednesday that, as a legal matter, it would be difficult to put the $300 million cat back in the bag.
“It’s actually a legal argument that’s not without merit,” Lesniak said of Christie’s position. “What’s scurrilous is the actions by the governor and by the board of the EDA along with the state house Joint Capital Management Commission.”
“This was a grand conspiracy to keep the public from having any input into this decision-making process,” he said.
Wisniewski said the New Jersey Supreme Court ruled in 2004, in Lance v. Codey, that a bond authorization to patch up a budget hole had been improper. But in that case, the court declined to disturb the sale before it was executed.
“The fact that it’s done doesn’t make it right,” he added. “It doesn’t mean it can’t be undone. In the bond market, the buyers of bonds expect to be fully informed of all material facts surrounding the sale of the bonds. I would be interested in seeing the offering documents that they made and provided to the buyers, to see whether or not this was a beat-the-clock sale in order to avoid having the court weigh in on the legality and constitutionality.”
Misrepresenting pertinent facts to bond buyers, such as the potential legal risks, could lead to expensive lawsuits and enforcement actions from regulators, Wisniewski said.
Correction (May 18): A previous version of this story incorrectly said the state had sold some bonds prior to the New Jersey Supreme Court’s decision in Lance v. Codey in 2004. That bond sale did not happen until after the court’s ruling.