The real estate investor arrested Wednesday on federal charges of using straw buyers to fraudulently obtain mortgage loans from a bank is also behind Newark's new Department of Public Works garage that is at the center of a federal whistleblower lawsuit.
Victor Santos, 57, of Watchung, who was charged along with three others with conspiracy to commit bank fraud, owns 52-90 Amsterdam St. in the Ironbound, the future site of the city's DPW facility where Mayor Ras Baraka and other city officials gathered for a ceremonial groundbreaking last month.
The property is at the center of a lawsuit filed by former city attorney Willie Parker against Baraka, the mayor's brother and chief of staff Amiri "Middy" Baraka, Jr., and two top city officials.
Parker raised objections to the multi-million 52 Amsterdam development deal between the city and Santos when he discovered an added provision to the 40-page contract which called for the City of Newark to continue paying rent even in the case of unforeseen events, such as a natural disaster, kept it from using the property.
The controversial provision, known as a “Hell or High Water clause,” is often referred to in legal terms as an “Unconscionable Provision.”
"Because Mr. Parker would not agree to a provision that would inure to the detriment of the city, his client, the city and its leadership determined to terminate him," said Jack White, attorney for Parker.
Several attorneys who spoke to TAPinto Newark said the a "Hell or High Water" clause is rarely in the public interest. "It flies in the face of common sense," said one attorney who asked not to be named.
Parker filed the suit in June in U.S. District Court for New Jersey against the City of Newark, the mayor and his brother, along with Personnel Director Kecia Daniels and Business Administrator Jack Kelly, after he was allegedly retaliated against, and then fired, for refusing to sign off on the deal.
Parker claims in his suit that after he refused to sign off on the contract, he was “commanded” by Middy Baraka to execute the contract on behalf of the city during an Aug. 25 meeting.
Parker reported the chief of staff’s demands to the mayor, which resulted in a confrontation outside Parker’s home when Middy Baraka showed up with an armed security detail to accuse the attorney of snitching, the suit alleges.
The suit claims that Middy Baraka told Parker to “tell the mayor that you didn’t hear what you say you heard or that you misunderstood what you heard.”
The incident marked the beginning of an alleged string of retaliatory measures, with Parker claiming that he was chastised by the mayor in front of other employees and accused of making side deals with developers and their lawyers.
In October, 2016, Parker suffered a heart attack and was ultimately fired.
Parker is suing for up to $5 million in damages.
Baraka, along with state and city elected officials, developers and others lauded Santos at the September groundbreaking of the five-building complex, which is a public-private partnership with Goldman Sachs and located in an industrial section of the Ironbound neighborhood of Newark, just east of Routes 1 and 9.
The lot is owned by 52 Amsterdam Newark, LLC, which is registered out of the Watchung, Somerset County house owned by Victor Santos.
Santos thanked the mayor at the groundbreaking event, along with Goldman Sachs and others, for their help in bringing the deal to fruition.
“I’m excited to get this project finished,” he said at the groundbreaking.
In 2016, the Newark city council approved a 25-year lease of the property at 52-90 Amsterdam St., with a rent of $4.7 million for the first year and $7.6 million in the 25th year.
The property is situated completely within the AE Flood Zone, which is considered a high-risk zone.
The property was previously home to dye manufacturing companies and was contaminated for several decades, according to the New Jersey Department of Environmental Protection.
At the groundbreaking, the mayor, along with Middy Baraka, Santos, members of the Newark City Council, Department of Economic and Housing Development Deputy Mayor Carmelo Garcia, Goldman Sachs Urban Investment Group Managing Director Margaret Anadu and others, were in celebratory moods as they dug into a buffet of hot foods.
Mayor Baraka said the project would benefit the city.
“There’s been a lot of discussion about this place,” he said. “This is something we’re trying to do to make sure our buildings are sustainable.”
52 Amsterdam Newark, LLC recently received Preliminary and Final Site Plan approvals with nearly 20 variances for lot coverage, building height, insufficient and excessive illumination and garbage storage screening.
The project will include two one-story motor vehicle storage buildings, a one-story motor vehicle repair garage, a four-story parking deck with 227 spaces and a seven-story office building. The garages would provide washing, fueling, and repairs for city vehicles.
The complex will stretch from Magazine St. to Wilson Ave., and would include lockers, a cafeteria, a body and welding shop, a fire engine repair shop, a fuel station, a masonry, carpentry and paint shop, a truck wash, storage for city-owned vehicles such as dump trucks and salt spreaders, storage for the Newark Police Department’s confiscated vehicles and administrative facilities for the Department of Water and Sewer Utilities.
According to a city hall press release, the facility “will provide for an extensive use of sophisticated and environmentally friendly building systems,” including nearly 100,000 square feet of solar panels to reduce overall electrical consumption, and will involve the extensive use of recycled building materials, energy and water saving fixtures and equipment throughout.