NJ Gubernatorial Hopefuls Agree: $300M State House Renovation Must Be Stopped

Whether it’s by lawsuit or freezing funds, outright cancelation, or some other maneuver, Democrats and Republicans alike want to stop the clock on the costly project

state house
The controversial $300 million renovation of the State House may never actually be completed — regardless of the outcome of a lawsuit by several state legislators who are trying to block Gov. Chris Christie’s plan.

That’s because the project is scheduled to take up to four years to complete, and leading candidates to replace Christie have all announced opposition to it.

Phil Murphy, the leading Democrat in his party’s 2017 gubernatorial primary field, said last week that he’s already looking into whether the long-term bond financing can be frozen come January when Christie, who himself canceled a major capital project that was started by his own predecessor, will become a private citizen. The private sale of $300 million in bonds occurred quietly last week with little notification.

“I’m not a lawyer, but we’re looking at it right now,” said Murphy following a news conference in Newark last week. Two other Democratic hopefuls, state Assemblyman John Wisniewski (D-Middlesex) and state Sen. Ray Lesniak (D-Union), are among the legislators suing the governor to halt the project

“This goes to the very essence of the character of state government under this governor,” Wisniewski said on Friday.

Republicans also disenfranchised

Meanwhile, the leading gubernatorial candidate in the Republican primary — Christie’s own lieutenant governor, Kim Guadagno — is promising to cancel the rehab project “so fast it would make your head spin.” Her main competition in the GOP primary, state Assemblyman Jack Ciattarelli (R-Somerset), has also signed onto the litigation against Christie, citing the need to curtail the borrowing.

“We cannot afford another penny of debt,” Ciattarelli said during last week’s Republican primary debate sponsored by NJTV and NJ Spotlight.

And the overall level of distrust about the project has grown so high in Trenton that Wisniewski and the other lawmakers who are suing to block it implored a judge on Friday to issue an injunction to prevent the governor from knocking down any walls until a legal hearing is held. No official order of injunction was issued by the court, but the Christie administration did indicate in a letter that was sent to the judge on Friday that no “irreversible demolition or construction” would occur before a scheduled June 14 hearing.

A gold leaf embarrassment

Christie, a second-term Republican, announced the renovation project in late November, saying it would be the first in decades for a section of the building that houses the signature gold-leaf dome, its rotunda, and several executive-branch offices, including the governor’s. This original part of the State House, located near the Delaware River on West State Street in Trenton, was built in 1792, and Christie said its current condition is “an embarrassment to the people of the state.” His administration has also said it’s costing $8 million to $10 million annually just to maintain the building.

Yet instead of going through the New Jersey Building Authority, which at one point was overseeing a $38 million State House renovation effort, oversight of the expanded rehab project was shifted earlier this year to the little-known State Capitol Joint Management Commission, a panel made up of both legislative and executive branch appointees. The commission voted late last month to approve the project’s finance plan, which also involves a lease-back arrangement with the state Economic Development Authority that will effectively make the agency the landlord of the State House while the bonds are being paid off using rent money to be provided through the annual state budget.

‘Private placement’

Earlier this month, the EDA voted to approve the bond financing for the project, and then immediately moved ahead with a “private placement” transaction with RBC Capital that didn’t involve offering any of the bonds to the public.

Murphy, a former Goldman Sachs executive, called the sequence of events an “outrage” following a news conference held last week with mass-transit workers in Newark.

“Done under the cover of night, (with) no transparency,” Murphy said. “I think citizens ought to be outraged by this.”

Using the joint management commission and EDA to facilitate the project’s financing is one of the key issues that have been raised by the lawmakers who are suing to block the renovation project. Wisniewski’s suit argues that the project’s finance plan violates the New Jersey constitution’s debt-limitation clause, which prevents the state from taking on debt worth more than 1 percent of the annual state budget without voter approval. The current state budget measures $34.6 billion, and state Treasurer Ford Scudder has said the renovation project could end up costing $500 million or more counting both principal and interest payments — meaning the 1 percent limit would be triggered.

Only Legislature can approve

Another lawsuit, filed by Lesniak (D-Union), Christopher “Kip” Bateman (R-Somerset) and Michael Doherty (R-Warren), also makes the case that only the Legislature can approve expenditures like the rent payments that would be used to pay down the debt the Christie administration has taken on for the renovation project.

“The New Jersey State House is not Gov. Christie’s State House; it belongs to the people of New Jersey,” Lesniak said on Friday after the Christie administration gave the assurances that there would be no irreversible work done before the June 14 hearing. Lesniak is also running for governor this year.

For his part, Christie has attempted to brush off the criticism of the State House project as just election-year politics, suggesting he’s simply showing the courage that’s needed to preserve a building that dates back to the 1700s.

Scoring ‘political points’

“All of the other people who are critical of it are running for governor or are trying to score political points,” Christie said when asked last week about the opposition to his pet project. “I get that, that’s fine.

“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,” Christie said.

Will Rijksen, a spokesman for the state Department of Treasury, also pushed back against any suggestion that an injunction had been ordered to prevent the construction work from progressing, and the letter sent to the judges on Friday suggested it will be seeking dismissal of the case outright.

“The court did not grant injunctive relief and the state did not agree to delay construction, even by one day,” Rijksen said.

But Christie’s own record provides a good indication that just because a seemingly irreversible capital project has already been started, there’s no real guarantee that the next governor won’t be able to find a way to stop it if they really want to. It was Christie who decided just months after taking office in 2010 that construction on the long-planned Access to the Region’s Core rail tunnel, which was a priority project for predecessor Jon Corzine, was to be halted, even if it meant having to repay the federal government millions of dollars in transportation aid.

“There is no opportunity for reconsideration on my part,” Christie said at the time despite protests from transportation advocates who warned the costly infrastructure upgrades were long overdue.

“We’re done. I am moving on,” Christie said.