BELMAR, NJ — Belmar has reached a tentative settlement of a lawsuit by the developer of the stalled mixed-use project on River Road, where a never-opened outdoor bar still sits empty.
Under a resolution approved by the borough council on July 11, Business Administrator Colleen Connelly is authorized to enter into the settlement agreement with Loko Co., LLC, which would resolve its breach-of-contract lawsuit against the borough and calls for revisions to the original redevelopment agreement.
The settlement also includes a parking license that allows the borough to temporarily use existing parking spaces along River Road on property it previously vacated as part of the project.
Although the details of the settlement agreement were not disclosed, attorney Jennifer Phillips Smith of Newark-based Gibbons, P.C., who represented the borough in the litigation, said that both parties "realized there was a way to mutually resolve the dispute, and the borough and redeveloper want to see the permanent development of the site."
As a result, the tentative agreement applies to the second phase of the redevelopment project approved in 2014 — referring to the construction of two mixed-use buildings of 10 residential condominiums and first-floor commercial space, which would include a restaurant and bar.
The project’s first phase called for the construction of a temporary outdoor bar and café for the 710 River Road site, which would have operated from 2015 to 2017. However, those plans did not materialize after the borough council rejected a liquor license transfer for brothers Timothy and Matthew Harmon to open Salt, the tiki-style bar built overlooking the Shark River but never opened. As a result, Loko, owned by developer Gregory Kapalko of Belmar, filed suit against the borough in November 2016.
In the lawsuit, Kapalko and partners Shelly LoCasico and Brett Yarusi claimed that the borough breached its redevelopment agreement contract by denying the Harmons' liquor license transfer, committed fraud and engaged in a host of actions that prevented the project to commence.
Before the council approved the resolution, Mayor Matthew Doherty stressed that the settlement includes “zero dollars and zero cents" of taxpayer dollars. “The borough is not paying the plaintiff anything,” he said. "In the lawsuit, they alleged serious misdeeds (against him and the borough), none of which are true."
However, because the borough must still pay legal fees associated with the case, "this entire exercise is a complete waste of taxpayer dollars,” he said.
In its 2017 budget, Belmar has allocated $216,000 for legal fees, compared to $121,000 in 2016 — earmarked for a number of lawsuits against the borough, including litigation related to the disputed liquor license transfer.
William Wolf, the attorney representing Loko is on vacation and could not be reached comment on the proposed settlement. Once the agreement is signed, Loko has 90 days to file an application for preliminary and final site plan approvals with the planning board. Loko plans on starting construction within six months of final planning board approval, according to special counsel Smith.
In a related matter, there was no information available on the status of the $10 million federal lawsuit filed in April by the Harmons who are seeking damages resulting from what they claim has been the borough’s deliberate effort to prevent them from opening Salt.
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