Atlantic County is demanding that the South Jersey Economic Development District immediately return $2.5 million the county contributed to infrastructure improvements at the NextGen Aviation Research and Technology Park.

In a letter sent Tuesday to the SJEDD, the county states that it wants the money returned because the district has refused to open the boulevard-style access road through the park connecting Amelia Earhart Boulevard and Delilah Road. County officials have said the closing is contributing to traffic flow problems at the newly reconfigured Airport Circle.

SJEDD Executive Director Gordon Dahl padlocked a gate across the roadway in December, citing traffic flow, safety and liability concerns. Previously, he told county officials that opening the road could cause a littering problem and that the road was insufficiently designed — explanations County Executive Dennis Levinson described as “bizarre.”

A letter sent to Dahl on Feb. 1 states that the Federal Aviation Administration, South Jersey Transportation Authority and the county all want the road opened.

“It’s inexplicable what’s occurring right now with a government tax-funded agency. This is embarrassingly childish,” Levinson said. “(Dahl) is not going to hold the public hostage because of his spitefulness.”

Dahl and SJEDD board Chairman Leonard Desiderio could not be reached Tuesday night.

The relationship between the district and the county has become increasingly volatile in recent months. In the midst of the access road issue, the county voted to withdraw from the district in January after 32 years, citing concerns about the district’s financial position in the NextGen project and audits that had not been completed in two years.

Assistant County Counsel Anthony Pagano said the county is entitled to recoup the $2.5 million in taxpayer dollars if the district does not allow the road to be used as it was originally represented in a funding proposal made to the county. To secure county financing for the project, SJEDD presented a traffic study stating that the road was intended to be a public “through” road that would divert traffic from the Airport Circle.

“The SJEDD’s refusal to open the road at best constitutes a repudiation of the very basis for the county’s provision of the funds. At worst, the SJEDD’s recent course of conduct raises serious concerns with whether the county’s funds were obtained through pretenses that were either false or grossly inaccurate,” states the county’s letter, signed by Pagano. “In any event, under these circumstances, the SJEDD is not entitled to the benefit of county funding.”

Given the district’s apparent financial difficulties, Pagano said it’s not clear how the district would repay the $2.5 million. However, it’s likely that any action would have to come through litigation. The county could also consider obtaining a court order to open the road as an alternative, he said.

“We’ve heard there are other creditors out there looking for payment as well. The county’s interests are substantial and need to be put on the table. This is our way of really getting to the table to get their attention,” Pagano said. “It also gives SJEDD the chance to do the right thing.”

The county funded $2.5 million of a $7 million infrastructure installation for the planned research park, which was first announced in October 2005. Construction has yet to begin on the first of seven buildings.

The SJEDD, which has directed the infrastructure installation, is under pressure to turn over the lease agreement for the NextGen park land to the park’s board. District leaders, however, have vowed not to do so unless the district is repaid $858,000 spent on the project that is not reimbursable under other agreements.

The SJEDD is the state’s lone economic development district founded for the purposes of regional economic planning. Cape May, Cumberland and Salem counties are members. The district is in financial distress, as it owes $495,000 to contractors that have completed work at the park. Last month it turned down a state loan to pay the companies, which would have required the district to simultaneously surrender the lease.

The move to recoup the $2.5 million is the latest step the county has taken regarding the district. Last week, the county sent a default letter to the district threatening legal action if an $82,903 invoice from Jan. 27 for road improvements at the access road remains unpaid by March 5.

The county issued a similar default letter to the district in early January for work at the NextGen park but only after a $76,000 invoice went unpaid for nearly four months. SJEDD soon paid the bill but refused to pay the Jan. 27 invoice, saying the roadwork was not completed to specifications.

The Atlantic County Improvement Authority, which acted as project manager for the infrastructure installation, is owed $64,500 and has not been paid since March 2011. Earlier this month, ACIA also issued a letter of default to the SJEDD demanding payment by Feb. 24.

ACIA Executive Director John Lamey said as of Tuesday, the SJEDD, again citing insufficient work, had not made payment.

Lamey said the authority will “more than likely” be filing a lawsuit seeking payment. Another contractor, Birdsall Services Group, filed a lawsuit at the Atlantic County Civil Courthouse earlier this month seeking $169,700.

“Every wound that Gordon Dahl has is self-inflicted. It was Atlantic County that brought out that these financial problems existed,” Levinson said. “We withdrew from the district. The other three counties, I’ll hold them culpable also. What you’ve had in this district too long is the tail wagging the dog.”

Contact Jennifer Bogdan

609-272-2739