The South Jersey Economic Development District’s default on a payment associated with the construction of the NextGen Aviation Research and Technology Park has Atlantic County threatening legal action.
An invoice for $82,903 for road improvements at the intersection of Delilah Road and the NextGen park’s access road was issued by Atlantic County on Jan. 27. To date, no payment has been received, according to a letter sent by the county to SJEDD Executive Director Gordon Dahl on Thursday. The county is demanding that the organization provide proof that the district has the funds to pay for the improvements.
If payment is not made within the next 10 days — on or before March 5 — the county will take action to secure payment and “sanction the SJEDD for breach of its contractual obligations,” the letter states.
Assistant County Counsel Anthony Pagano said that likely means moving forward with a lawsuit seeking damages.
“We hope it doesn’t come to that. We’d like to see this move forward without that action,” Pagano said. “We’ve got 10 more days.”
SJEDD, which has led the infrastructure installation at the planned Egg Harbor Township research park, has fallen into financial difficulty. A Watchdog Report by The Press of Atlantic City earlier this month showed that other contractors who have completed work at the park site are owed $495,000.
The NextGen Aviation and Research Park was announced in 2005 as a seven-building center that would bring 2,000 “high-paying” jobs to the area. However, construction has not begun on any of the buildings.
The park’s board is in negotiations with SJEDD to turn over the land lease for the project, but district leaders have said they will not do so unless the district is reimbursed for $858,000 that is not reimbursable under other grant agreements.
SJEDD also has turned down an offer from the state Economic Development Authority for a “bridge loan” to pay the companies. In exchange for accepting the loan, the district would have been required to simultaneously turn over the land lease, thus not recouping the $858,000.
Dahl said payment for the road improvements has not been made because paving work was not completed to specifications, pointing to a difference in the texture of one section of paving to another at the intersection. Dahl hired an independent lab to test the pavement and provided the results to the county in a Feb. 7 letter.
However, county engineer Joe D’Abundo contends that the work complies with state requirements and no section of the road needs to be repaved.
“We don’t have problems paying for the work if it’s done correctly. That paving was obviously substandard,” Dahl said. “We paid them the first payment on the project even though we noticed that. We didn’t have to do that.”
SJEDD entered into a $172,000 agreement with the county in December 2010 for the road improvements in question. The district agreed to use the county’s contractor for the work and reimburse the county later, according to a resolution authorizing the agreement.
A $76,000 invoice the county issued on Sept. 12, 2011 for the first payment associated with the work went unpaid for nearly four months before the county issued a letter of default to the district, also threatening legal action. After receiving the letter, Dahl paid the bill but cited concerns with the quality of the work that the county said had not been addressed previously.
If the county moves forward with a lawsuit, it will be the second entity to take legal action against the district in connection with the Next Gen project.
Birdsall Services Group filed a lawsuit this month at the Atlantic County Civil Courthouse seeking $169,700. The Sea Girt, Monmouth County-based engineering firm has provided land surveying and field review task since entering into a contract with the district in December 2009.
Dahl has said the district will be filing a counterclaim as payment was not made also due to problems with the quality of the work. As of Friday evening, a counterclaim had not been filed, according to a state website.
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