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ABC Special Report
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New Jersey and Bribery
Thursday, 23 June 2005
If rezoned, airport, farms worth $25M
In August 2002, K. Hovnanian Homes agreed to pay $25 million for 123 acres of land and for obtaining township permission to build on at least 200 individual lots, company spokesman Doug Fenichel said Wednesday. In addition, K. Hovnanian agreed to pay $125,000 each for additional lots Spalliero could get approved through increased density...
If rezoned, airport, farms worth $25M
Bribery-tainted Marlboro site lies fallow; disputants in court
Published in the Asbury Park Press 06/23/05
BY JAMES W. PRADO ROBERTS
STAFF WRITER

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MARLBORO — Marlboro Airport and the farmland surrounding it were worth at least $25 million to developer Anthony Spalliero and his partners if the land could be rezoned for high-density senior housing.

In August 2002, K. Hovnanian Homes agreed to pay $25 million for 123 acres of land and for obtaining township permission to build on at least 200 individual lots, company spokesman Doug Fenichel said Wednesday. In addition, K. Hovnanian agreed to pay $125,000 each for additional lots Spalliero could get approved through increased density, Fenichel said.

The now-closed 51-acre airport off Route 79 and 100 acres of surrounding farmland are at the center of a major corruption scandal.

In April, former Mayor Matthew V. Scannapieco admitted in federal court that he accepted $245,000 in bribes from a developer, later identified as Spalliero. Scannapieco said $100,000 of that amount was his price to help smooth the way to rezone the airport area for senior housing. In May, Spalliero was charged by the FBI with paying the bribe.

The area was never rezoned. The Township Council is now considering rezoning it to require five acres per home instead of two, in order to slow development.

Prospective buyer

The airport was sold to a Staten Island partnership in 2000, two years after a pilot who kept his planes at Marlboro Airport, and who had the property under contract, died in a plane crash. Lino A. Fasio, 34, of Union Beach, planned to buy the airport for $1 million from Dr. M. Leonard Genova and his wife, Aletta, and keep it as an airport. His private airplane subsequently crashed in Hillsborough, Somerset County. Police there have reopened the investigation into the cause of the crash.

Fasio's purchase was entangled in a lawsuit. The Genovas wanted to back out of the deal, but Fasio sued to enforce it. The suit was dismissed after Fasio's death.

In a 2003 interview, Spalliero told the Asbury Park Press that he had a 25 percent interest in the development of the land in and around the airport.

Spalliero said he hoped to get the land rezoned for 220 units — 20 more than the minimum that K. Hovnanian wanted. The extra 20 units would have been worth an additional $2.5 million to Spalliero and his partners — on top of the $25 million promised, according to the terms of the agreement.

All told, Spalliero's interest in the rezoned property could have been worth $6.8 million.

Although the rezoning effort was for a total of 151 acres, the Hovnanian contracts were for 123 acres.

Spalliero, who specialized in obtaining zoning changes favorable to high-density residential builders, had long eyed the airport as a development opportunity. He has said he started entering into contracts for surrounding properties in 1994.

The Hovnanian deal

Hovnanian spokesman Fenichel said K. Hovnanian Shore Acquisitions LLC, a Hovnanian subsidiary, entered into two Spalliero-related contracts on Aug. 28, 2002.

One contract dealt with 60 acres that included the airport and an adjacent farm. The second contract called for the development of 63 acres of adjacent farmland.

Fenichel said the developments were "inextricably linked," and that the contracts were for $12.5 million each. Hovnanian paid a $500,000 deposit on each contract, Fenichel said.

By March 2004, Hovnanian canceled the contracts and demanded a return of the $1 million. Fenichel said the money has not been repaid.

In April, Spalliero and his partner in the deals, Terry Sherman of Holmdel, filed a lawsuit against Marlboro Holdings LLC, the Staten Island-based owner of the airport property, and David Berman, its registered agent. The suit alleges that Sherman and Spalliero were personally liable for the money, and seeks the return of the $500,000 deposits from the airport owners.

Marlboro Holdings and Berman responded in a counterclaim that Sherman and Spalliero asked for the airport to be closed in September 2002 to reduce or eliminate opposition to the rezoning effort. The $500,000 was to compensate for the closing, Berman said in court papers.

The status of the other $500,000 paid by Hovnanian is not clear.

Berman stated that Sherman and Spalliero said they had the "appropriate expertise and wherewithal" to obtain the appropriate zoning.

Berman's response, filed by Hazlet lawyer Sam Maybruch, also stated Berman was unaware that Spalliero and Sherman were "involved in fraudulent and/or illegal conduct" to get the land rezoned.

Marc J. Gross, an attorney representing Sherman and Spalliero said, "we've denied those allegations as being unfounded."

Sherman has not been charged with any wrongdoing.

Court date Nov. 28

During a brief hearing in Freehold Wednesday on the Spalliero and Sherman lawsuit, Superior Court Judge Alexander D. Lehrer said the case would "turn on an interpretation of contracts and agreements."

Lehrer ordered the decisionmaking parties — identified by the lawyers as Berman, Sherman and Spalliero — to appear in court Nov. 28.

 

Staff writer Jason Method contributed to this story. James W. Prado Roberts: (732) 643-4223 or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
http://www.app.com/apps/pbcs.dll/article?AID=/20050623/NEWS/506230455


 
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