For immediate release
Monday, Dec. 4, 2006
Contact: Ringwood Council members, Wenke Taule, Bill O'Hearn and Tom MacAllen
email to: dems@ringdems.org
Borough stuck with Kensington road improvements
Local developer favored by Republicans could cost tax payers $300,000!
Borough Attorney Joe Maraziti reported to the Ringwood Council at its November 28th meeting that Kindred Construction, Inc., owned by local developer Pat Wallace, defaulted on its obligation to pave the roads (Coventry Way and Briscoe Chase) in the Kensington Wood development and could cost the Borough an estimated $300,000. This is the second time that Ringwood taxpayers would be picking up the tab for a corporation owned by Mr. Wallace. In 2004, when the Democrats took majority control of the Ringwood Council, they learned that Executive Parkway in Pat Wallace's Industrial Park development had been paved at a cost of $80,000 in public funds by the Republican administration which ignored the developer's legal obligation to pay for road construction and improvements enshrined in every development agreement.
The Democratic Council members asked Borough Attorney Maraziti to try to recoup these monies. The Industrial Park search led to a dead end with a finding that the performance bonding had been allowed to expire by the previous Republican Council.
The ongoing Kensington Wood story is far more complex. Mr. Maraziti explained that one bonding company, the major insurer, was itself in financial difficulties and paying out only 8 cents on the dollar. In addition, the Borough lowered performance bond obligations in the years 1999-2001 to a degree that the money would not pay for the roads paving and other remaining work even if the settlement with the insurer were at full value.
He further indicated that the development company, Kindred Construction, Inc., is an insolvent shell company, and that the exploration of a legal basis to seek payment directly from the principal owner of the company revealed that Mr. Wallace is presently being sued in state and federal court by two former Ringwood residents, namely by Sidney Dinerstein (who may be remembered as the co-proprietor of the check cashing company JBS once headquartered in Ringwood) to whom Wallace defaulted on a $700,000 loan due in 1999; and by his erstwhile partner, Greg Czura. Maraziti went on to report that Czura and Wallace dissolved their partnership in 1996 and Czura alleges that Wallace not only did not honor their buyout agreement for * (see correction below) $1 million, but illegally transferred all assets to various family members to shield himself from his creditors.
In December 2004, Mr. Wallace filed for Chapter 7 bankruptcy. Messrs. Czura and Dinerstein are challenging his petition, alleging fraudulent transfers of property and assets. Borough Attorney Maraziti advises against litigation by the Borough at this time but will continue to monitor the legal developments.
The three Democratic Council members, Wenke Taule, Bill O'Hearn and Tom MacAllen contend that the burden placed upon Ringwood taxpayers is the end result of Republican cronyism and would never have been brought to light without their vigilant presence at the Council table.
* Correction 12/6/06: the dollar amount of the buyout agreement is unknown
For more info refer to November 21, 2001 Record Article - Developer is King of Ringwood's Hill