A non-profit filed legal action Tuesday to stop the state from issuing $1.15 billion in bonds to help finish building American Dream Meadowlands.
EAST RUTHERFORD -- A non-profit filed legal action Tuesday to stop the state from issuing $1.15 billion in bonds to help finish building American Dream Meadowlands.
The New Jersey Alliance for Fiscal Integrity, a non-profit advocacy group that opposes the project, said in a letter it would file with the state Appellate Division to overturn an Aug. 25 New Jersey Sports and Exposition Authority vote to authorize the bonds if the authority didn't halt the bond issue by Sept. 12
The sports authority plans to sell the bonds to the Wisconsin Public Finance Authority, an agency Triple Five, the developer of American Dream, has worked with in the past. The Wisconsin Public Finance Authority will simultaneously issue the bonds to the public.
American Dream will repay the bond holders through a combination of up to $390 million in sales tax revenue and via a payment-in-lieu-of-taxes (PILOT) agreement with East Rutherford.
"This bond deal is an illegal shell game designed to dupe the taxpayers of two states into paying for the construction of a private mall for wealthy developers," Bruno Tedeschi, the spokesman for NJAFI, said.
NJAFI, in a statement, said under state law, the resolutions approving the bonds should have included the terms of the bond sales, including interest rates and maturity dates. The resolutions also describe a private bond sale to the Wisconsin Public Finance Authority, not allowed under Gov. Christine Todd Whitman's Executive Order 26, which calls for bond sales by state agencies to be competitive, the NJAFI says.
The group also said the sports authority failed to give notice for the Aug. 25 emergency meeting at which it authorized the bond sale.
NJAFI is asking the sports authority to hold off on issuing the bonds until a court rules on its arguments.
"If these bonds are issued and found to be illegal, giving back the money would be a fiscal nightmare and an indelible blot on New Jersey's credit rating and fiscal reputation," Tedeschi said.
Tedeschi did not reveal who is behind NJAFI. The group is a 501c(4) organization, which allows it to accept anonymous donations.
The sports authority and Triple Five did not immediately return requests for comment.
Myles Ma may be reached at mma@njadvancemedia.com. Follow him on Twitter @MylesMaNJ. Find NJ.com on Facebook.