The private placement of $300 million of New Jersey Economic Development Authority debt to renovate the state's capitol triggered outrage and legal action from a bipartisan group of lawmakers.
The May 11 transaction, which closed around three hours after the NJEDA meeting approved the financing with RBC Capital Markets as lead underwriter, was detailed during a scheduled conference call Wednesday with New Jersey Superior Court Judge Mary Jacobson to discuss a lawsuit filed by state senators Ray Lesniak, D-Elizabeth, Mike Doherty, R-Warren and Kip Bateman, R-Somerset seeking to halt the bond-funded renovations of the State House. Assemblyman John Wisniewski, D-Middlesex, also filed a complaint May 12, a day after the NJEDA approved the bonding.
“In an effort to avoid transparency and accountability, the governor must have set a new record for the speed with which bonds were sold after the NJEDA rubber-stamped his expensive renovation plan,” said Doherty in a statement. “This is a clear sign that the Christie Administration didn’t want to give legislators or the public even a moment to review or challenge this expensive State House renovation.”
An RBC spokeswoman declined to comment on details of the bond sale. An NJEDA memo said the bonds are backed by future rent payments and the final maturity will not exceed 30 years.
New Jersey Treasury spokesman Willem Rijksen said “the bond issuance was legal and appropriate.” He added that Treasurer Ford Scudder confirmed the transaction at a Senate budget hearing on Tuesday a day before the Judge Jacobson conference call.
“It was done in a completely proper, legal way,” said Christie during a press conference Wednesday. “All the people who are doing the stuff they’re doing, there’s nothing more than press releases with a legal caption on it.”
The lawsuit alleges that the State Capitol Joint Management Commission, Treasury Department and NJEDA violated the Debt Limitation, Appropriations and Separation of Powers clauses of the New Jersey Constitution when approving the bonds. The legislators noted that Treasurer Scudder recently testified in legislative hearings that debt service payments on the estimated $300 million in bonds needed to finance the project could end up costing taxpayers $500 million to $750 million when factoring in interest payments.
Judge Jacobson decided Wednesday to combine the two separate lawsuits from Wisniewski and the three senators. She scheduled oral arguments for June 14.