Updated news on the Gambino, Genovese, Bonanno, Lucchese and Colombo Organized Crime Families of New York City.

Friday, November 14, 2014

NJ Transit plans to do battle with Papa Smurf's family over $8.1 million land deal

Carmine Franco before his sentencing in 1998.

Most people would not choose to owe Carmine Franco — or his associates — anything. But that’s exactly the situation NJ Transit finds itself in, owing more than $8 million to the family of Franco, a convicted mob boss currently serving time in federal prison for racketeering.

In May, Franco admitted that he orchestrated a Mafia scheme to control North Jersey’s garbage business through threats and intimidation, forcing many owners out of their own businesses. But NJ Transit isn’t backing off.

This morning, the agency plans to dedicate another $150,000 to challenge a court ruling that gave Franco’s family $8.1 million for a piece of land needed to build new train tunnels under the Hudson River — a project that was canceled by Governor Christie in 2010.

And the costs for the public transit agency may not stop there. A private contractor has found that cleaning up the disputed parcel could cost $2 million, a bill the Franco family now says is NJ Transit’s responsibility.

That’s on top of another $2 million NJ Transit already has paid lawyers over property disputes related to the canceled rail tunnel project.

“They’ve just procrastinated,” said Paul V. Fernicola, the attorney representing Franco’s family. “How long is this process supposed to take?”

Nancy Snyder, a spokes­wom­an for NJ Transit, declined on Tuesday to discuss the parcel or the agency’s appeal.

The legal fight centers on an awkward, 1.89-acre triangle of weeds and broken concrete that spills into Weehawken, Union City and Hoboken. Owned for years by Carmine Franco, who deeded it to his wife Mary and sister-in-law Carol, it was an industrial site used by a hodgepodge of auto repair, jitney bus and salvage yard companies, according to records filed in Superior Court in Hudson County.

Carmine Franco, who is 78 and from Ramsey, was known to his mob associates in the Genovese crime family as “Papa Smurf” and “Uncle Sonny.” Convicted in the early 1980s and again in the late 1990s for mob-related conspiracies, he was banned for life from the waste-hauling industry in New Jersey and many New York jurisdictions.

Franco eluded that ban, helping to create an alliance between the Genovese, Gambino and Lucchese crime families to exert control over the trash industry by using proxies to hide his role. He also admitted to mail fraud, wire fraud, and overbilling customers at a waste transfer station in West Nyack, N.Y., which he controlled.

When he was convicted, Franco faced a possible prison sentence of 45 years. His lawyers responded with a request that he be sentenced to a year of community service, at a church. Manhattan federal Judge Kevin Castel ultimately sentenced Franco to one year in prison. He also was ordered to forfeit $2.5 million to the United States.

The land originally caught the eye of NJ Transit officials in 2008 when the agency was looking for properties for its massive project to build a pair of train tunnels between New Jersey and New York. The project was called Access to the Region’s Core.

The agency sued for condemnation in December 2009, and initially offered to pay the Franco family $934,000, according to court filings by NJ Transit. A second appraisal increased the offer to $990,000.

Seven months later, Christie canceled the ARC tunnel project. In the years since, NJ Transit has done little with the land, other than surround it with a chain link fence festooned with signs marking it as NJ Transit property.

Meanwhile the surrounding neighborhood was experiencing a transformation. Thanks partly to NJ Transit’s light rail trains, which pass immediately north of the site, the area has exploded in recent years with new luxury condominiums and apartment buildings. All that development has left the Franco family’s 1.89-acre plot as one of the last large pieces of bare ground, just a few minutes’ walk from ferry lines to Manhattan.

Facing condemnation, the Francos hired an architect and an engineer to reimagine their land, and seek a higher price. Instead of a polluted bus parking lot, the architect envisioned residential buildings up to 13 stories tall, with 126 units and sweeping views of New York.

When its capacity for redevelopment was considered, the land’s value skyrocketed to $9.1 million, Fernicola said. After a 12-day trial a Hudson County jury largely agreed, ordering NJ Transit to pay the Franco family $8.1 million.

“Clearly NJ Transit substantially undervalued the property,” Fernicola said. “This property has amazing views of Manhattan.”

In addition to the site’s potentially growing value, NJ Transit also may have to deal with its contamination. The agency’s first, preliminary environmental study of the parcel, dated Sept. 16, 2008, found “a petroleum-like odor” and “elevated levels of contaminants … in both soil samples and groundwater samples,” according to court documents. A second study in March 2012 found PCBs and other pollutants, and estimated it would cost nearly $2 million to remove contaminated soil, remove drums of chemicals and cap dangerous portions of the site.

NJ Transit argues in court filings that the Franco family should pay to clean the site. Fernicola counters that because New Jersey law requires agencies that take land through condemnation to file two lawsuits simultaneously — one to condemn the property and a second to recover cleanup costs from the former owners — NJ Transit already has missed its only chance to get cleanup money from the Franco family.

Years after it started the condemnation process, “all NJ Transit has done was remove a single gasoline container” from the site, according to a legal brief filed in 2012 by Fernicola.

NJ Transit’s administration committee is scheduled to vote this morning on whether to spend another $150,000 on legal fees associated with the case. The agency originally allocated $2 million in November 2008 for lawyers working on property acquisitions related to the ARC tunnel.



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