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Denver Developers Allege Corruption, Collusion Between N.J. Suburb And Local Developer

Denver Developers Allege Corruption, Collusion Between N.J. Suburb And Local Developer
A rendering of 615 River Road Partners' proposed multifamily project at the eponymous address in Edgewater, N.J.

Some out-of-town developers are suing the town of Edgewater, New Jersey, and local developer Fred Daibes over allegations of corruption and collusion.

In the federal lawsuit, 615 River Road Partners — a joint venture between Denver-based The Maxal Group and EnviroFinance Group — alleges that town officials illegally blocked their plans for 615 River Road due to influence and bribes from Daibes, the Associated Press reports.

615 River Road Partners claims that Edgewater's zoning board denied plans for a 2,000-unit multifamily complex, plans that bear similarities to developments that Daibes has been allowed to build as he has "participated in the development of virtually all high-density properties built in Edgewater since 2000," according to the suit.

The town has reportedly begun proceedings to take possession of 615 River Road, formerly a Hess petroleum storage facility, under eminent domain and turn it into a park and public works project. The Denver companies allege that Daibes is behind the efforts in an attempt to sabotage their plans after being outbid for the property.

The lawsuit accuses local officials of receiving cash payouts, below-market rent at apartments, jobs with Daibes' companies and other kickbacks as part of a long-standing relationship with the local businessman, according to the AP. Such relationships should give those officials cause to recuse themselves from proceedings involving Daibes, 615 River Road Partners contends.

Denver Developers Allege Corruption, Collusion Between N.J. Suburb And Local Developer
A satellite image of the Hudson River, with the town of Edgewater, N.J., on the west side and Manhattan on the east

A lawyer for the town denied the claims, insisting that Daibes has had to go through the same zoning processes as everyone else and has had some projects denied through the years. Maxal and EnviroFinance are seeking damages equal to the value of the property once developed, which could be at least $50M.

The price tag is so high, and the competition so fierce, due to the proximity to New York City the small town (a population of just over 11,000 as of the 2010 census) boasts on the "Gold Coast" of New Jersey.

If an apartment complex is built at 615 River Road, it would have unobstructed views of the Manhattan skyline across the Hudson River. Daibes said he is against the Denver group's apartment plan, but that he did not exert any influence over the town's zoning decision.

"First of all, I wish I had that kind of power," Daibes told the AP. "Nobody has that kind of power. Second, I'm not anti-development, I'm a developer. But I'm for good development."