Jersey City—An unorthodox development of a property with a troubled history keeps on getting more unusual, this time with an approval of a non-recourse, low interest loan to the developer of $1.3 Million of funds mostly intended for first time home buyers. Developer Wallace Scruggs of Housing Trust of America must be one happy camper with the news. Like the previous owner, Scruggs has gotten from the city a deal that is just too good and keeps getting suspiciously better, especially with this last little touch.

Council President L. Harvey Smith said at the Council’s Caucus meeting “I wish that Munley (Mark Munley, Executive Director of the Jersey City Economic Development Corporation) or Greenfield (Doug Greenfeld, also of Munley’s JCEDC office) would have been here. They are piecemealing us.” Smith explained that had all the concessions by the city to the developer been solicited at one time, instead of one at a time, they would surely have been shot down.

This latest $1.3 Million low interest, non-recourse loan was the last straw for Smith. Non-recourse means that there is no penalty for non-payment, and the money comes from Federal grant monies set aside to help first time homebuyers. Smith tabled the matter until Director Munley or Mr. Greenfeld can appear before the council to discuss the proposal.

Whitlock Cordage was previously known as Lafayette-Manning when it was owned by a corporation of that name. Before that it was the Whitlock Cordage, a factory that made rope mostly for ships. It was last occupied about 50 years ago. Lafayette-Manning Corporation, in turn was owned by a character named Harvey Shapiro who managed to navigate the city’s maze of bureaucratic chutes and ladders in amazing fashion.

For his first stunt, Shapiro managed to “buy” the property by promising to pay off tax liens, with nothing down. Shapiro gave the city his promise to make payments to clear up the tax arrears and had his proposed payment plan approved by the city council. The payment plan was the first ever approved for a developer, though such payment plans are occasionally approved for homeowners suffering extreme financial hardship, according to tax collector Maureen Cosgrove.

With payment plan and Council approval in hand, Shapiro then appeared before the zoning board and somehow persuaded that body to approve a one-of-a-kind zoning classification for part of the property. That part of the property to receive its own zoning class was the footprint of one landlocked building of several buildings in the interior of the property. Shapiro, armed with payment plan, council approval, and now a new zoning approval, preceded to sell the landlocked building to a purported third party.

That was A and S Mills, a sweat shop garment manufacturer employing illegal aliens in subhuman conditions festooned with fire safety violations like a ham with cloves. That did not stop the plucky Shapiro from collecting $20,000 a month rent for the hellish premises. Shapiro is said to have pocketed $350,000 from the sale of the building, and nearly a quarter million a year in rent for two years or more, according to city officials. No money down. Also, no money later. Shapiro never made a single payment toward the payment plan as promised and never paid a penny towards the fire safety violations and fines and penalties that piled up. Shapiro pocketed the proceeds of the sale and the rent receipts, but somehow never quite managed to get around to making any payments of any kind. No money down, no money later, no money, as it turned out, ever.

Time wounds all heels and Lafayette Manning, the corporation owned by Shapiro that was the titular owner of the nearly seven acres in the now “hot” Morris Canal redevelopment area, went bankrupt. Harvey Shapiro, however, is just fine having walked away with a pile of dough for nothing from Jersey City and not so much as a Thank You note.

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