Legal fight brewing over tax break for mall

Township officials say the office space and adjacent shopping center -- which include an AMC Dine-In Theater, a Panera and a local U.S. Department of Homeland Security office -- are obsolete and struggle to compete for tenants. Declaring the areas in need of redevelopment gives the township "an active role in the overall positive development of the site," West Orange Mayor Robert Parisi said.

But the heart of Malanga's suit argues that the law should not apply to a commercial area that can attract investment. The shopping center was purchased for $97 million in 2016 and the executive offices for $14 million last May, the suit said.

"Clearly, there's no difficulty in attracting capital," Malanga, a 20-year resident of West Orange and an attorney, said. "This is a flagrant misuse of the redevelopment law."

The 32-acre Essex Green Shopping Center sits in the center of the 12-mile town. Its anchors, the AMC Dine-In Theater and ShopRite, draw a steady stream of patrons to the T.G.I Fridays, Total Wine, Macy's Backstage outlet store and other retail chains.

At a council meeting last fall, town officials reminisced about stores that had long closed or relocated from the 60-year-old shopping center. Places like the Bunny Hop (a restaurant), Linens 'n Things, Barnes & Noble and the Gap. 

"We're looking to keep the investments in town, we're looking for the economic driver for people being in town and generating more taxes," Council President Susan McCartney told NJ Advance Media. McCartney supports the redevelopment designation but declined to comment on the lawsuit. 

The suit comes after months of opposition by a vocal group of residents -- and a councilman -- who say the properties could use renovations but are far from blighted. 

"I believe the redevelopment area does not even come close to meeting either the intent or the qualifying standards of the law," said Councilman Joe Krakoviak, who was the lone vote against declaring the properties in need of redevelopment. "Does anyone honestly believe Essex Green and Executive Drive are blighted, as the law requires?"

The suit, filed in Essex County Superior Court in February, claims the designation of the properties as areas in need of redevelopment was "unreasonable, arbitrary and capricious." It says the township did not provide evidence that the properties' condition is "detrimental to the safety, health, morals, or welfare of the community," as required by law. 

For a property to be considered an area of need of redevelopment, a study must be conducted. The study by the town planner's firm found the shopping center and offices met the criteria under the redevelopment law.

Essex Green has 25 tenants, according to its website. The study said the property is 23 percent vacant, "outmoded" and in need of significant renovation.

The adjacent offices are 53 percent vacant, the study said; the outdated layout of the low-rise office park was described as "a relic of a different era" that does not compete with more modern buildings. Allowing the properties to remain as is would be "detrimental" to the surrounding area, the study found.

A message left with the township planner at his firm was not returned.

Krakoviak said he saw "no reason" for the redevelopment project to exist.

"This has all the hallmarks of an attempt to provide massive tax abatements to wealthy developers -- giving away millions of dollars of future revenues to be made up through higher taxes for every West Orange property owner," he said.

The local tax rate in West Orange has increased every year since 2011, records show. 

The suit also claims the town has already chosen a developer to helm the project, but Parisi maintained that a developer had not been selected -- the process was just beginning, he said. Town officials have reiterated that the redevelopment law gives the township more say in what is developed on site.