Friday, March 26, 2010

Laurelwood: Monmouth County's "Road to Nowhere"

All the talk this past week about the Department of Navy's exchanges with the NJ DOT pertaining to construction of a two-mile road from a few hundred meters south of NWS Earle's main gate and thru the weapons base to the privatized Laurelwood homes got us thinking that it was worth stepping back a bit to recount the monetary parameters of the road, which as we all know would provide anyone with unimpeded access (i.e. no guards, no background checks).

NOPE's position, of course, is not that any road-construction estimates be refined or allocations changed, but rather that the Navy simply buy out the Laurelwood property and avoid the entire presumed $10.8 million expense to build and enclose the road in 7-foot security fencing. (Again, we say this recognizing that NOPE's primary argument - to void the Laurelwood lease - is moot, with the DoN having signed away this contractual right once it allowed Laurelwood's owner to refinance the mortage in 2002.) This estimate does not include the costs for environmental remediation. That $10.8 million initial cost, plus ongoing maintenance, represents what NOPE's Business Case Analyst Fulton Wilcox points out as a powerful argument for not moving ahead with “unfettered access.”

Published comments from the Acting Assistant Secretary of the Navy suggest that about half the costs of building the access road would be paid by the Navy to acquire and build fencing, gates, bridges, and other non-roadway specific costs. The other half, constituting construction costs of the actual roadway, is apparently to be paid by Laurelwood Homes, LLC, owner of the housing units. Based on our partial understanding of who pays how much, Fulton shares an impact estimate.
"The Navy’s $5.4 million share of construction costs will reduce the Navy’s expected savings by not having to buy the Laurelwood housing units from perhaps $25 million to $20 million. In addition, as we have previously published, the Navy will incur thirty years of ongoing costs to maintain and secure these improvements and in providing security and various services to the tenants living at Laurelwood, and those costs almost certainly will far exceed the purported savings.

It is also important to estimate the potential impact of the approximately $5.4 million cost of the roadway on the civilian tenants occupying Laurelwood. Although these are rough estimates and subject to error, they do highlight the burden of having to support a single-purpose 1.4-mile long “driveway.”

Assuming that the private cost of money is 6% per year, the property owner would need to increase monthly rents by about $110 per unit just to recover the $5.4 million investment and associated interest payments. Also, the road needs to be maintained over thirty years. If annual road maintenance consumes about 3% of the original cost of the road, the additional rent needed to recover roadway maintenance would be about $45 per month.

Therefore, the total cost per housing unit of this enormously extended driveway will probably be more than $150 per month. What that added $150 per month provides the tenant is a circuitous drive between high security fencing and, behind the fencing, a view of assorted military structures, a superfund site or two, and of ammunition-handling trucks and trains."

As can easily be seen, based on Fulton's commentary and NOPE's view of the Navy-NJDOT permit application mess, the DoN's EIS proves nothing more than a flawed, cursory document that Navy leaders in Washington had hoped would sneak through without anyone's notice. NOPE will continue to keep issues such as this in the public eye, to highlight how ludicrous it would be to provide civilian renters unimpeded access thru a fully functional Naval weapons storage depot for the next 30 years, solely because the DoN got itself into a bad housing contract in the 1980s and does not want to do the right thing and buy out the contract. Again, NOPE is not a mouthpiece for Laurelwood Homes, LLC, for it is not our concern whether the owner makes another cent from a deal for which the DoN has already paid $70-$75 million; rather, the realities of the situation and the documentation put forth by NOPE dictate that buyout is the only logical fate for the Laurelwood homes.

Thursday, March 25, 2010

Fulton Wilcox's take on Navy's apparent NJ DOT faux pas

As noted yesterday, the Department of Navy may only have itself to blame for failing to meet its contractual May 1 deadline to provide Laurelwood Homes, LLC, the right-of-way to start constructing a costly, multimillion-dollar road to nowhere (i.e. Laurelwood housing inside NWS Earle), over which civilians with no background checks will have unimpeded access thru the base thru 2040. Here is the analysis offered to NOPE supporters by Business Analyst Fulton Wilcox; we welcome your feedback here:

"The Navy’s expressed “purpose and need” for providing unfettered civilian access to Laurelwood housing depends on a state road connection permit, but the Navy has refused to apply for the connection permit because of the Navy’s sovereign immunity. The present impasse prevents anyone from submitting a “complete” DOT request for a roadway connection, so obviously there is nothing for DOT to approve.

Given the significant legal issues involved, the matter has been escalated from the New Jersey Department of Transportation to the Attorney General’s office. New Jersey Deputy Attorney General Jennifer Fradel has asked the Navy to provide more specificity to the Navy’s assertion of sovereign immunity. Following such fact-finding and debate, there perhaps will be discovered some way to break the impasse, but at best the road connection permit will be extraordinarily expensive.

The Navy surprised us all, including perhaps itself, in creating this impasse. In the Laurelwood EIS, the Navy detailed its permit-dependent proposed actions, but nevertheless did not disclose that it would “no show” permitting itself because of the Navy’s sovereign immunity. Also, it did not describe the impact of being a “no show” permit applicant nor describe how it would mitigate the impact.

Further, in the Laurelwood lease agreement, especially the portions related to the Navy’s “purpose and need,” the Navy made commitments to obtain permits without mentioning nor providing for its assertion of Sovereign Immunity. For example, Supplementary Lease Agreement 43 states that “the Government, assisted by the lessee, will immediately begin the process to obtain all necessary permits…” but the Navy is invoking sovereign immunity rather than moving “to obtain all necessary permits.” No permit presumably means no road connection or a connection, which itself leaves many liability risks and accountabilities to be addressed, which in turn means no “unimpeded access” to Laurelwood.

The cross-jurisdictional surprises may continue. It may be that that sovereign immunity extends to other state permitting processes – e.g., environmental – and to many other aspects of the Laurelwood privatized environment. Sovereign immunity or other jurisdictional issues may come up in many other contexts, such as the Navy’s relationship to civilian tenants or visitors. For example, recently the Navy extracted itself from being a “named defendent” in a liability case involving a private trucker injured by a fall at NWS Earle – see

Although the Navy believes that renting to civilians is its low-cost option, in fact the costs of dealing with a thousand or more tenants in a very strange jurisdictional setting is likely to eat up the purported savings as well as divert scarce resources into struggling through avoidable disputes."

- Fulton

Wednesday, March 24, 2010

Feb. 26 Attorney General letter exposes DoN's brazen arrogance and lack of regard for Earle's neighbors

NOPE has obtained a copy of a February 26, 2010 letter from New Jersey's Attorney General, Paula Dow (to NWS Earle officials) that clarifies a long-held NOPE stance that our Department of Navy was part unprepared, part arrogant in dealing with the state in assuming it could build an unimpeded civilian access route to the Laurelwood homes from Rt. 34 without the state's approval.

In short, the Navy argues to the state that it is exempt from regulation under New Jersey's Highway Access Management Act and State Highway Access Management Code. AG Dow's letter would suggest otherwise, and requests the DoN provide NJ DOT with answers to a 6-bullet questionnaire seeking documentation not only about Laurelwood housing and the privatized plan to rent the homes to civilians, but also proofs of title and other jurisdictional certifications before NJ DOT reconsiders the Navy's views regarding the aforementioned NJ regulations.

As we all know, the Navy has until May 1 to clear the way for Laurelwood's owner, Teri Fischer, to begin construction of the 2-mile proverbial "road to nowhere." Otherwise, the Laurelwood lease's Supplemental Agreement No. 43 sends the parties to buyout.

Thursday, we will post Fulton Wilcox's (NOPE's business case expert) analysis of this matter, including an interesting take on how the DoN is, itself, to blame for creating this DOT impasse.

Tuesday, March 23, 2010

NOPE's goals for the homestretch

NOPE leadership met last night to discuss actions inside of five weeks until expiration of the military-use phase of the 52-year Laurelwood lease and proposed conversion to unvetted rental and unimpeded access thru NWS Earle to civilians this year. Owing to the outpouring of community support, NOPE has made great strides, but the job is not yet complete, so we need all of our supporters to remain focused on our mission - no civilian housing at NWS Earle.

By month's end, we hope to see thru the passage of S-762/A-2014 and signature by Governor Christie, setting the wheels in motion for postponement of DOT and DEP permit issuance to the Department of Navy for proposed construction of its 1.7-mile "Road to Nowhere" (the Laurelwood homes, in this case) until the N.J. Treasurer's office can conduct a cost-benefits analysis, which we are confident will reveal an enormous unfunded federal mandate on N.J. We will keep our eye on whether A-2014 gets posted for vote in either committee or by the full Assembly Session, and understand that a number of NOPE supporters answered our call to contact Assemblyman Conners, respectfully encouraging him to post A-2014 ASAP.

Meanwhile, we will follow up with the Government Accountability Office (GAO) this week on the progress of its investigation into the Laurelwood housing situation (from security, financial and environmental perspectives missing from the Navy's own "Environmental Impact Statement" of 2008) and hope for a report before the lease's "military-use" phase expires on April 30, although we recognize that the release could come after that date. Regardless, we are confident that the probe will validate NOPE's case from multiple fronts and prove that the Laurelwood EIS was incomplete and a waste of everyone's time and dollars.