Yes, Asbury Park Can Default Madison Marquette and Take Back the Casino

As Waterfront Sub-Developer Madison Marquette neglects Asbury’s oceanfront buildings and turns Art Deco into Art Wrecko, people are spitting mad, as they should be.  This sentiment has reached a boiling point now that MM has applied for a demolition permit for part of the Casino building, one of the historic Crown Jewels of the boardwalk.

Over the years, an internet rumor has started that goes like this:  “The City Council in 2002 signed a contract that has no default provision and no remedies for the City to do anything about Madison Marquette’s neglect.” 

This rumor gets embellished with assertions like, “The City had a lawyer look at the contracts and there is nothing we can do.”  Or “The City had a DOZEN lawyers look at the contracts and there is nothing we can do.”

Applesauce.

There are defaults and remedies to use against the developers in the 1986 contract, the 2002 contract and the 2010 contract, and I’ll take you through all of them right now.

Before we get to their default and what Asbury can do about it, let’s discuss and discard a piece of Madison Marquette propaganda:  MM is calling the part of the Casino to be demolished, the part that straddles the entire boardwalk, “The Breezeway.”

The what???  Nobody but them calls it that.  In Latin, what MM is doing  is  called “ad minimum redigere.”  It means “to reduce to the minimum.”   They don’t want you to realize they are going to knock down the largest part of the entire complex.  This part was more aptly described as a “grand concourse.”  For many, this area was the entrance to a century of memories of fun, concerts, skating, arcades, rides, food  and more. 

If by calling it a “breezeway” Madison Marquette is admitting to letting their own neglect blow more holes in the Casino than a pair of fishnet stockings, then yes, the place has become breezy.  But don’t let them lull you into thinking they aren’t assassinating history by calling it “breezeway.”  They are destroying a piece of architecture designed by Warren & Wetmore, the famed architects of Grand Central Station.

Now let’s get back to the default and remedies.

The 1986 Contract

This was the first Waterfront Redevelopment Agreement.  Here is the schedule by which all redevelopment construction was to be done:

:

	Commencement Date	Completion Date
Phase I	7/01/87	12/31/90
Phase II	l/01/91	12/31/95
Phase III	1/01/96	12/31/97
Phase IV	l/Ol/98	12/31/99
Flexible Phase	1/01/98	12/31/99

Failure to comply with the terms of this paragraph, including the Commencement and Completion Dates shown above, will be deemed a default under this Agreement. Failure to commence development of Phases I, II, III, IV or the Flexible Phase of the Project shall result in payment of damages including the amount of the deposit outstanding which shall in no event be less than $500,000.00.

If any work was not done on time, it was a default for that section, and here was the City’s option to remedy the developer’s default right from the contract:

To summarize that legalese, when the developer defaulted the City could:

1.    Extrajudicially (without going to court) enter the property and physically take it

2.    File a Deed with the County making the City the owner again

3.    Sell the property to a new developer

4.    Pay the defaulting developer just their investment back

The developer did none of the project, and the City held them in default. Unfortunately, the developer filed bankruptcy on July 29, 1992.  If anyone asks you why Asbury Park let the beachfront die all through the 1990’s, you can tell them it’s because a Connecticut Bankruptcy Judge ordered Asbury Park not to touch its own beachfront – for the next 10 years!

The 2002 Agreement

On October 28, 2002, with the Judge’s required approval, the City entered into a new agreement with what is known in the contract as the  “Master Developer,”  Asbury Partners (the members of Asbury Parters have changed several times over the years, but it started with the Fishman Brothers and ended with iStar; iStar is now Safehold, Inc). 

There are numerous developer time requirements in the 2002 agreement, but let’s limit ourselves to the Casino.  Here is the only place in the contract referencing a timeline to redevelop the Casino, at page 39:

.3.5 Casino Property and Power Plant Property

Both the Casino Property and the Power Plant Property are COPS as defined in Article 4 and are intended to be sold as provided therein.

The Master Developer shall have prepared a report by

an appropriate professional firm(s) reviewing the condition of each property  and  recommendations  for  the  rehabilitation,  or demolition (limited to the rear of the Casino building) if necessary, -and the costs of renovation along with a detailed schedule. The report shall also address any environmental conditions known or suspected with regard to each property.

The parties shall within 120 days of receipt of the above report, and prior to closing, agree to, said consent not to be

         39

unreasonably  withheld,  a  schedule  of  renovations  to

be undertaken by the Master Developer after closing.

If the obligation of the parties to sell and purchase either the Casino Property or the Power Plant Property under the Casino Sale Agreement are terminated then the City shall have the right, but not the obligation, to sell the same at public

auction on terms and conditions acceptable to the City.

Here is the summary of what we know from that part of the contract:

1.     The developer has no right to demolish the entire Casino, just the rear part (the skating rink that was already demolished in 2006)

2.     There is a timeline for redevelopment of the Casino, and it is contained in an Engineering Report both sides agreed to BEFORE the Casino ownership was transferred from the City to Asbury Partners.

What do we not know?  Where the heck is that engineering report that has the timeline of repair for the Casino that the City and Asbury Partners agreed to before the closing?  It’s high time everyone contacts City Hall, and Asbury Partners, and Madison Marquette and demand release of that document.

It’s safe to assume the Developer is in default of those dates, since we are 24 years later and the Casino remains untouched.

There is another default provision in the contract. Please look, from page 69:

8.1 Abandonment, Notices

A. Abandonment of any part or portion of the Project by Master Developer or Subsequent Developer shall mean the failure to adequately staff or diligently prosecute the Project to ensure the achievement of the Project.

            Clearly, not touching the Casino for 24 years is an “abandonment” of the project.

Next, here are the remedies for the default, right from the 2002 contract:

Here is a summary of what all that legalese means:

If construction has not begun…

1.    The City can repurchase the property for the amount the developer paid

2.    The City can sell the property to a new sub-developer

If construction has begun…

1.    The City can repurchase the property for the amount the developer paid for the property, plus hard costs the defaulting developer put into the property

2.    If the defaulting party is a sub-developer (like Madison Marquette) the Master Developer (Asbury Partners) has the right of first refusal to purchase the property and sell it to a new sub-developer.

3.    The City retains the right to cancel the redevelopment rights of the Master Developer and the sub-developer as to that property.

THE 2010 CONTRACT

In the 2002 contract, the Master Developer, Asbury Parters, has the right to contract sub-developers for any property in the redevelopment zone.

That brings us to Madison Marquette.  They started working in Asbury Park in 2007, but they formalized their agreement in a 2010 contract to develop all the beachfront properties.

A quick aside about Madison Marquette so you know who they really are.

There is a larger company based in Switzerland called Capital Guidance. They are an ENORMOUS international private equity firm that operates in 8 business sectors in many countries all over the world.  Their true size is unknown because they are not on any public stock exchange.

Madison Marquette is NOT a separate company; rather they are a Capital Guidance realty holding company for just their US properties.  Capital Guidance is on record stating Madison Marquette alone is worth over $6 billion dollars.   They could have used their own money to repair all their Asbury Park buildings long ago.  But they refuse … more on that later.

The first important thing the 2010 contract says is that Madison Marquette and Asbury Partners are now a “joint venture.“ Legally that means what applies to one applies to the other, unless otherwise specifically stated.

Next, regarding the Casino, on page 39 the 2010 agreement repeats the language of the 2002 agreement, above, that the timeline for repair of the Casino will be in an engineering report that must be agreed upon before Madison Marquette closes on the property (and we repeat – release this report to the public so we can see the agreed upon timeline to restore the Casino!).

The Default provisions in the 2010 contract are in Section 8 starting on page 69.  No need to repeat them because they are copied from the 2002 agreement, above.

Therefore under the 2010 contract, like the 2002 agreement, Madison Marquette defaults…

If construction has not begun…

1.    The City can repurchase the property for the amount the developer paid

2.    The City can sell the property to a new sub-developer

If construction has begun…

3.    The City can repurchase the property for the amount the developer paid for the property, plus hard costs the defaulting developer put into the property

4.    If the defaulting party is a sub-developer (like Madison Marquette) the Master Developer (Asbury Partners) has the right of first refusal to purchase the property and sell it to a new sub-developer.

5.    The City retains the right to cancel the redevelopment rights of the Master Developer and the sub-developer as the that property.

Also, the 2010 contract has the same language on “Abandonment” being a default.  Madison Marquette has not started the Casino project in 16 years.  They clearly abandoned their rights.

Conclusion

Those on the Internet claiming the 2002 City Council entered a contract with no default provisions are wrong.  THIS City Council just needs to use them.

For those wondering what in the world is stopping a $6 billion+  company from just finishing this project, we now have the answer, and it comes from an email exchange I uncovered between Mayor John Moor and a man named Daniel Davidow, from January 25, 2024.

Davidow is a consultant hired by Madison Marquette.

Mayor Moor astutely, very smartly, inquired whether Madison Marquette is going to use its own money for the beachfront.   Davidow’s answer was that they want government to kick in $50 million first, before they do. 

That is $50 million that may never come. If it never comes, I think it unlikely they ever develop the property.  Here is the email exchange:

Question By Mayor Moor:

Financing: I see, and I could be wrong, all grants. What happens if you do not get them or what you have applied for? Is any of MM's money being used. The boardwalk grant has to be spent or encumbered by 2026 which one? What is the total cost of your proposed renovations just for the Convention Hall complex which includes the Paramount Theatre, the Grand Arcade, and the Convention Hall. Will the Grand Arcade have to be closed during any portion of the proposed 3 years?

Answer by Davidow:

Between the Boardwalk Preservation Fund, the new tax credit program for arts facilities, and the State and Federal Historic Tax Credit programs, we are hoping for $50 million in cash subsidy. The overall project cost estimate is currentlyat about $120 million. The remainder of the project (and the casino/carousel building project not part of this discussion) would be privately financed by Madison Marquette.

The Boardwalk grant must be committed by the end of 2024 and spent by the end of 2026. It is considered committed when the City makes the grant award. We do not believe spending the cash by the end of 2026 this will be a problem.

It is almost certain that at some point(s) during the project, the Grand Arcade will have to be closed. Please see my response to the next question for more context.

So what can you who is reading this do?

1.    Please share this link on all your social media as many times as you must so that we can stop the spread of misinformation.

2.    Send a copy of this link to the Asbury Park City Manager, the Mayor and each councilperson and demand an answer as to why they haven’t started a legal action against Madison Marquette and Asbury Partners enforcing the default provisions in the contract and taking back the Casino and Convention Hall.

Here are their email addresses (they might hate me for this):

City Manager Adam E. Cruz - adam.cruz@asburypark.gov

Mayor John Moor – john.moor@asburypark.gov

Deputy Mayor Amy Quinn - amy.quinn@cityofasburypark.com

Councilwoman Angela Ahbez-Anderson - angela.ahbez@cityofasburypark.com

Councilwoman Eileen Chapman -  eileen.chapman@cityofasburypark.com

Councilwoman Yvonne Clayton- yvonne.clayton@cityofasburypark.com

Ps…

In every Asbury Park election to come, don’t consider a candidate whose platform doesn’t include running Madison Marquette out of town, and passing an Historic Preservation Ordinance to protect us from the next multi-billion-dollar gentrifying developer.

Respectfully submitted to the public…

Thomas De Seno, Esq.

aka “Asbury Park’s Official Unofficial Historian”

aka “The Pope of Asbury Park”