VINELAND — The city authorized spending $92,000 in taxpayer money last year on a financial investigation of the Four Corners development project even though municipal records indicated no misuse of funds related to the project.
An auditor’s report on file with the city’s Office of Economic Development confirms that all funds — including $4 million worth of Urban Enterprise Zone money — were properly spent on the $10 million renovation of the Landis Theater portion of the project.
That report, dated May 12, 2011, was shown to municipal officials before February 2012, city Economic Development Director Sandra Forosisky said. That is when the previous City Council awarded the first of three contracts related to the investigation.
“We didn’t say, ‘Here you go, here’s your money, do what you want with it,’” Forosisky said. “The (certified public accountant) gave us a cost certification thorough enough to see that every bit of the $4 million (was properly spent.)”
Council nonetheless authorized spending the $92,000 on attorneys and an auditing firm for an investigation that is yet to produce any public records regarding its findings. The investigation ended in January as part of a public Superior Court agreement between the city and Four Corners developer Hans Lampart.
When asked what the investigation revealed, Peter Coccaro, who served as council president for the past four years and who led the council committee investigating the Four Corners financing, said, “I can’t reveal what I know. I do know a lot.”
Coccaro said there were “verbal meetings” with the firms hired by the city regarding the financial investigation.
“I won’t say there isn’t anything on paper,” Coccaro said. “I never discussed paperwork with them.”
The Four Corners project at Landis and East avenues was to create a $40 million economic gateway to the city’s downtown business district. The Landis Theater renovation was the only part of the project to be completed. The city dropped development plans for one corner in June 2011. City officials are unsure when, or if, Sacred Heart High School will proceed with its expansion plans on another corner. Plans for some retail outlets and senior citizen housing on a fourth corner are still a possibility.
The Four Corners project was authorized in 2007 under the city government administration led by then-Mayor Perry Barse. Barse’s administration was swept from office the following year by a ticket lead by mayoral candidate Robert Romano. Coccaro was part of that ticket.
The previous council considered the investigation after a Four Corners subcontractor and general contractor alleged in June 2011 that some of the UEZ funds allocated for the project were spent on another development enterprise. UEZ money comes from state sales tax revenue. The two men also told council that they were angry about not being properly compensated for their work by Lampart.
In the May 2011 report on file with the city’s economic development office, accountant Mark Ronchetti wrote that he reviewed a required outline of the developer’s costs. The review indicated that all project funds were properly spent, the report states.
Ronchetti’s report was compiled for Landis Theater Properties LLC. Forosisky said that is the entity that served as the borrowing agency for the Landis Theater project.
Forosisky said U.S. Bank, which helped Lampart obtain more than $5 million in tax credits for the project, also has certifications that all project money was properly spent.
The Press of Atlantic City in January filed an Open Public Records Act request for the city to provide reports, correspondence and information about subpoenas and other materials relating to the investigation. The request resulted primarily in copies of documents related to the hiring of the Burlington County firm of Holman & Frenia to perform the audit.
The only indication of how the audit was proceeding is contained in a Sept. 11 email from Keith Ingling, Holman & Frenia’s forensics manager, to city Business Administrator Denise Monaco. Ingling stated in the email that his company’s investigation “revealed key circumstances that are somewhat different than what we originally believed.” He wrote that “the circumstances are favorable to the city and are going to enable us to utilize a different approach.” He also wrote that he would give the city a report within a few weeks.
Forosisky said no report was ever written.
Holman & Frenia Managing Partner Kevin Frenia stated in a Dec. 19 letter to Monaco that Ingling discussed the investigation findings in confidential discussions with Romano, Coccaro and then-Councilwoman Mayra Arroyo. Frenia’s letter contains no specifics as to those discussions.
Frenia also requested in that letter that the city add another $25,000 to the $32,000 contract council awarded his company in June. He wrote that his company will submit a “confidential interim report” outlining the findings of the investigation when $23,000 of that additional allocation is spent.
Council authorized the additional $25,000 in November. The new city government administration, which took office in January, stopped payment on that authorization after the signing of the Superior Court agreement.
City Clerk Keith Petrosky also forwarded The Press’ public records request to Holman & Frenia and the Montclair, Essex County, law firm of Ambrosio & Tomczak. Ambrosio & Tomczak was hired as legal consultants for the financial investigation on a $30,000 contract.
Ingling’s response was a Jan. 24 email in which he told Petrosky that “there are no reports from our firm” regarding the Four Corners investigation. Ambrosio & Tomczak wrote in an email to Petrosky the following day that the firm has no records “responsive to the requests” by The Press, and no copies of any issued subpoenas.
Holman & Frenia did not respond to a request by The Press for comment.
Gregory Tomczak cited attorney-client privilege in declining to discuss details of the investigation.
Tomczak said eight subpoenas were served by the Cumberland County Sheriff’s Office on county companies and individuals who worked on the Four Corners project. He said three more subpoenas were to be served on Atlantic County companies that worked on the project, but he did not know whether the Atlantic County Sheriff’s Office ever served the documents. He would not identify those named in the subpoenas.
Officials with the Atlantic County Sheriff’s Office said they have no records relating to those subpoenas. Officials with the Cumberland County Sheriff’s Office did not respond to a request by The Press for information regarding the subpoenas.
The subpoena issue became moot when Lampart and the city signed the Superior Court agreement Jan. 21 that ended the investigation, Tomczak said.
The Superior Court agreement stated that the council committee leading the investigation ceased to exist at noon Jan. 1. That is when the terms of all of the former council members ended.
The agreement further stipulated that all subpoenas issued by the committee were quashed, no persons or entities served with a subpoena had to appear before council, and city government could form another investigative committee it if so desired.
As he has throughout the investigation, Lampart said he properly spent all money dedicated to the Four Corners project.
The project has undergone mandatory audits, the results of which were shared with the city, he said. He said he worried that problems would stem from Holman & Frenia not being qualified to understand the complicated financial matters linked with the project.
“They’re auditors, but they’ve never done this,” Lampart said. “They could spend hundreds of thousands of dollars and really not understand it.”
Contact Thomas Barlas: