Vote to Provide Funds for Sewell Tract Litigation Deadlocks in Council

CAPE MAY – Cape May City Council again failed to pass a resolution Feb. 4 that would commit the city to financially support the Sewell Tract litigation of Concerned Citizens for Sewell Tract, a non-profit organization dedicated to keeping the 100-acre track in East Cape May free of development.
The litigation has been ongoing for 30 years, with Concerned Citizens becoming a party to it five years ago. The essence of the litigation revolves around the issue of whether the developer, East Cape May Associates (ECMA), should be compensated at the land’s full-market value, due to a “regulatory taking” of the tract by the state Department of Environmental Protection (DEP).
The DEP made an amelioration offer, and the validity and sufficiency of that offer are at issue in the upcoming trial set to begin later this year.
The legal battle has been sporadically fought for decades. The attorney for ECMA inherited the role when two previous attorneys, members of his family, retired.
The case saw three Superior Court judges, with the most recent being rotated off the case after five years of service. The case has had at least two trips to the Appellate Division. A settlement, which would have opened part of the tract to development, was scuttled by the Army Corps of Engineers in 2009.
Cape May has been on both sides of the case over time, once supporting some development, and offering to pay for the necessary infrastructure to support it. Now, the city’s position, affirmed in two resolutions, in 2018 and 2019, is that the tract should remain free of all development. This is the position of Concerned Citizens.
Recent changes in the litigation, due to rulings by the newest Superior Court judge, have left Concerned Citizens without the funds to pursue what is likely to be an expensive trial and probable appeal, regardless of who wins.
The city considered a proposal from Concerned Citizens, in January, that requested up to $65,000 to support pre-trial expenses and attorney fees (http://bit.ly/2Sgj3IT). Debate over that proposal raised concerns about the fact that the resolution being considered left open the opportunity for Concerned Citizens to return to the city for additional funds.
There were also concerns that the city was being denied a look at the non-profit’s donor list. Some also opposed the funding, on the grounds that the city should not use public dollars to support litigation by a private concern.
In the end, the January resolution failed to pass on a tie vote (2-2).
Deputy Mayor Patricia Hendricks was recused from the vote because her husband, Charles Hendricks, is the president of Concerned Citizens.
Council members Zack Mullock and Stacy Sheehan voted against the resolution, and Mayor Clarence Lear and Council member Shaine Meier voted in favor.
The resolution resurfaced Feb. 4, with the funds requested moving from a cap of $65,000 to $85,000. The resolution allowed Concerned Citizens to seek further support from the city in the future.
Charles Hendricks argued that, “This should have been the city’s case all along.” He said that about 100 individuals have contributed to the litigation on behalf of Concerned Citizens, and that the non-profit has spent around $400,000 on the lawsuit over the five years that it has been a party to it.
“Why should 100 people do what 3,800 taxpayers have not done?” he asked.
Those who support the city funding for the litigation argue that if Concerned Citizens is forced out of the suit, for lack of sufficient funds, the developer would be able to settle with DEP in a way that leaves the tract open to partial development.
Hendricks also pointed out that all of the discovery conducted by Concerned Citizens would not be part of the case record if the non-profit is forced to withdraw from the case.
Mullock argued that the city’s interest may not always coincide with those of Concerned Citizens, and that funding the legal expenses of the non-profit does not place the city in a position to best defend the interest of the taxpayers.
There was some discussion of what it would mean if the city entered the case directly, provided the judge approved such a request. The debate was not specific enough to explore fully the city becoming a party to the litigation prior to the upcoming trial.
While arguing his case for city support, Hendricks collapsed at the podium. EMTs were called, and he was transported to the hospital. Lear indicated, the next day, that Hendricks was released that night, and is recovering.
Following Hendricks’ medical emergency, a vote was taken on the resolution, which failed to pass 2-2.
To contact Vince Conti, email vconti@cmcherald.com.