Saturday, April 10, 2010

NOPE in the News

Following up on yesterday's exciting developments, here are the takes from the Asbury Park Press and the Newark Star-Ledger on the Navy's decision to suspend its "Record of Decision" to open Laurelwood housing at NWS Earle to civilians. Stay tuned for more in the days ahead.

Friday, April 9, 2010


Well, it's looking like Neighbors Opposed to Privatization at Earle - NOPE, the grassroots voice of the surrounding community - worked!

NOPE representatives attended a 330 p.m. press conference at Colts Neck Town Hall today, where Congressman Chris Smith announced that the Department of Navy is suspending plans to let civilians at Weapons Station Earle and will negotiate a good faith buyout with Laurelwood's developer. This press release from the Beck-O'Scanlon-Casagrande team is our first written sign of confirmation.

Please read the Star-Ledger and Asbury Park Press tomorrow for more on this story.

NOPE cannot begin to thank all elected officials who supported NOPE in this very time-consuming and extremely nuanced case - including the aforementioned Mr. Smith and NJ District 12 team, in addition to U.S. Senators Menendez and Lautenberg, Representative Holt, the Monmouth County Freeholders, and the mayors, councils and school district leaders of Colts Neck and Tinton Falls - in addition to members of the public who came out in support of what originally seemed like a 1-in-a-million chance of victory.

Clearly, the Department of Navy is making a wise decision, and we appreciate the Department's recognition of what is best not only for our surrounding communities, but for the integrity and focus of the mission of the base itself and the service members whose job it is to protect our country and provide ammunition to the U.S. Fleet as part of their daily lives, and whom we value as significant members of our Monmouth County community.

Please stay tuned here for more as developments occur, and please spread the word.

NOPE Chairman's Open Letter Response to APP Editorial

NOPE Supporters:

This Asbury Park Press editorial encouraging the Department of Navy to pursue an expedient buyout of the Laurelwood housing mess at NWS Earle is mostly on target. However, as NOPE Chairman, there are a few arguments worth making, namely that both the Navy AND Teri Fischer's Laurelwood Homes, LLC are guilty of victimizing U.S. taxpayers and endangering our local communities and Earle's mission and service members.

There is no debating the APP's perspective of the Navy's mule-headedness in dealing with this privatized housing debacle, or that the Navy kept its cards close to the vest, largely to compromise Ms. Fischer's bargaining position. But let's not have a pity party for a private housing contractor who has reaped at least $70-$75 million of U.S. taxpayer dollars for housing built in the 1980s...presumably at a cost far below that value...and that has largely been vacant for the past decade (i.e. requiring not as much attention or maintenance as a fully occupied community). To be sure, the $22 million mortgage figure put forth by Ms. Fischer's attorney appears to be the 30-year mortgage amount circa 2002, and likely does not take into account any payments put forth or, conversely, equity (i.e. profit) cashed out during the refinancing.

Hypothetically, let's say the Navy's buyout bid was $20 million, or the value NOPE put forth in our business case on the Laurelwood homes, after backing out the cost to build the unimpeded access road, insurance, daily operational costs (maintenance and repairs, provision of utilities, trash removal, etc.) and teardown costs; remember, by contract, the homes must be town down by 2040 and the land restored to its "original state" (the land was a wetland, believe it or not), which depletes the value of the homes and minimizes the useful life to 30 years.

Clearly, Laurelwood's attorney is going to do his job and ask for much more, and say that the Navy's offer is insulting (or "a song," as the APP editors put it). To be sure, Congressman Smith, as a longtime observer of this case and the champion of NOPE's cause, is charging the Navy with acting in "bad faith."

We cannot discount, however, the Navy having been either a halfway decent business partner and/or extremely sympathetic to Laurelwood's 2002 plea to refinance the mortgage on the homes at a much more favorable interest rate (but, based on a document we've seen, more likely hoodwinked by bankers and Laurelwood's attorney into signing away its right to right to revoke the lease in the event of a national emergency), is well within its right to be a shrewd bargainer. Indeed, based on NOPE's reading of the contract and other documents obtained thru the Freedom of Information Act, the Navy had to know that Laurelwood needed upfront funds to build the new unimpeded access road, starting May 1, and would have almost no shot at procuring insurance on 300 rental townhomes (to civilians) inside a weapons facility and on federally owned the wake of 9-11.

No matter how one slices it, both the Navy and Laurelwood are to blame for this charade. Yes, the Navy should have bought out the contract back in 2002 when approached by Laurelwood, both parties knowing full well that the civilian-rental phase (from 2010-2040) of the 52-year contract would amount to a major logistical and financial headache to the developer, Ms. Fischer, as well as the Navy. Indeed, our review of lease documents shows the Navy has made rent payments to Laurelwood (for one occupied unit) of roughly $30 million since 2002 for unused Laurelwood military housing.

Laurelwood's attorney, and for that matter all proponents of a buyout (NOPE among them, though for long we argued that the Navy should revoke the deal...until learning that the Navy foolishly signed away that right - something it kept out of the Laurelwood EIS and failed to mention during our face-to-face meetings), need to ease the rhetoric and propose a solution to end this mess rather than pointing fingers.

After 2+ years of involvement in this matter, my biggest concern - and I firmly believe this is shared by my fellow NOPE leaders - is the selfish intent of the Navy (get out of a bad housing deal and rent obligation) AND Laurelwood Homes LLC (get the most money out of the deal).

With Congressmen Smith, Holt and Pallone as intermediaries (remember, NWS Earle spans three U.S. legislative districts), arrangements should be made publicly to refrain from drawn-out litigation and/or mudslinging and to have a handful of impartial appraisers come in and assess the fair value of a buyout, rather than the Navy low-balling Laurelwood and Laurelwood falsely assuming that it is sitting on a king's ransom.

Set the buyout at the median or average of the independent appraisals, then immediately level the homes to avoid potential shenanigans and put this Laurelwood housing mess to bed once and for all.

Bill Holobowski
NOPE Chairman

Thursday, April 8, 2010

Feds met with Tinton Falls, Colts Neck officials

The Asbury Park Press reports that six reps from the Government Accountability Office (GAO), the investigative branch of the U.S. Congress, met with Colts Neck officials in an ongoing security and cost-benefits analysis of proposed civilian housing at NWS Earle, but NOPE also knows that the GAO met on Tuesday with the superintendent, business administrator and Board of Education president of Tinton Falls Borough, whose participation cannot be overlooked.

Either way, having briefed the GAO ourselves earlier this year, NOPE can attest to the importance of these fact-finding meetings as the GAO works toward completion of a study that will no doubt validate NOPE's contention that civilian housing at an active Naval Weapons base is a recipe for disaster.

Although disappointed that (according to APP) the GAO's study will not be published until "late summer" (August is the date we're hearing), NOPE can only suspect that the complexity of this case involving the U.S. Military's use of outsource contractors to build "privatized" military housing is what is causing the delay from the initially hoped-for release date of April-May. Still, whether or not the Navy and Laurelwood Homes, LLC come to some kind of buyout, the GAO's findings will make clear that the Navy's plan not only puts NWS Earle's own security (i.e. the base itself and the service members who work there) at risk, but exposes the surrounding communities to undue security, economic and environmental harm. NOPE expect that the study will also expose the flaws of privatized military housing and give Congress something to consider in terms of how the Military can best equip service members with housing, as we have discussed anecdotally here on the NOPE blog.

Wednesday, April 7, 2010


According to the Asbury Park Press, the Navy has approached Laurelwood Homes, LLC about buying out the remainder of the 50-year "privatized" lease for 300 homes at NWS Earle that the Navy wanted to turn into a civilian housing complex. This is HUGE news for NOPE supporters and the efforts put forth by committee leadership for 2+ years.

NOPE will not rest on its laurels or declare a victory until the wrecking ball literally meets these homes, but this is a MAJOR development and shows that grassroots organization does work. Our voices in the community do matter.

Of course, NOPE will continue to track this development in the days ahead, but upon first glance, a big piece (missing from the APP report) that people cannot overlook is that the U.S. Department of Navy got itself into this mess in 2002 (less than a year after the terror attacks of September 11, 2001) by signing away its right to revoke the lease under certain conditions (i.e. a declared National Emergency) that Laurelwood could refinance its mortgage! How nice!

At the same time, the Navy misled the public in the Laurelwood Environmental Impact Statement (EIS), and (a Navy attorney) later lied in a direct meeting in Washington, D.C., in the summer of 2008 to NOPE, a U.S. Congressman and other local officials, about why the Navy just couldn't simply exercise its contractual right of revocation to end the Laurelwood housing mess and the stress on NWS Earle and us.

Why the Navy would have signed away its right in the first place to revoke the Laurelwood lease and compromise national security is beyond NOPE's understanding, since there was no evident mission-critical, defense-oriented reason for allowing Mrs. Fischer (Laurelwood's owner) such leniency and to potentially cash out some equity from the properties.

At that time, documents show the owner's attorney groveling to the Navy about poor initial mortgage terms, and evidently the Navy's counterpart to the request to refinance bought this pleading, because the move not only gave Laurelwood the opportunity to profit more from its contract (remember, the Navy has paid Laurelwood about $70-$75 million since 1990 for these largely-unused homes), but caused the current huge mess requiring community action, lawsuits, buyout negotiations, etc.

In the end, no matter how the parties resolve this mess, today's APP story is excellent news for the NOPE movement. However, in the days and weeks ahead - and with Congressional investigators (the GAO) evidently in town briefing local officials this week - NOPE will follow up on this case and re-introduce some findings about our discoveries about the actual value of the property and why, contrary to today's published report, the "buyout" parameters are more transparent than face-to-face bargaining or the Navy making its "best" offer or what Laurelwood's attorney thinks his client should get for the homes in question.