Newark awarded $5.4 million no-bid contract

An investigation released today by the Office of the State Comptroller (OSC) finds the City of Newark circumvented the public bidding process to award a no-bid $5.4 million contract to a private entity to renovate a public ice rink.

OSC found that Newark officials misused the Adopt-a-Park statute, which allows municipalities to contract with private entities to improve or maintain a public park provided that the project comes at no cost to the municipality.

However, OSC found that Newark financed the entirety of the $5.4 million ice rink renovation project, in violation of the Adopt-a-Park statute.

“Municipalities that renovate parks are required to follow an open and transparent process that invites competition to avoid favoritism and advance the economic interests of taxpayers,” said acting State Comptroller Kevin D. Walsh. “Newark violated state law when it simply selected its preferred contractor without seeking competition through a public bid.”

The New Jersey Legislature enacted the Adopt-a-Park statute in 1992 as a way to allow private entities or non-profit organizations to develop public parks at no cost to local governments.

In 2017, Newark’s City Council issued $5,225,000 in municipal bonds in order to finance the renovation of the ice rink at the Sharpe James and Kenneth A. Gibson Recreation and Aquatic Center.

OSC found that the contract between Newark and the Devils Renaissance Development (DRD) – a private business entity associated with the New Jersey Devils – omitted all references to the part of the Adopt-a-Park statute that requires municipalities pay no costs associated with the project. 

“There are legally permissible and transparent ways for the City of Newark to partner with companies and non-profits while also complying with public contracting law, but that did not happen here,” said Walsh. “The public bidding process in New Jersey exists to prevent both favoritism and the appearance of favoritism when taxpayer money is being spent.”

Under the contract, DRD acted as a general contractor and forwarded funds it received from Newark to subcontractors who worked on the renovation. DRD did not receive any financial compensation for its participation in the project.   

This is not the first time Newark has improperly relied upon the Adopt-a-Park Statute to enter into contracts for public park improvements.

OSC also found five other park-related projects Newark executed under the Adopt-a-Park statute dating back to 2008, from upgrading baseball diamonds to improving skate parks. Newark partially paid for two of the projects according to contracts reviewed by OSC.

The report concludes with four recommendations for Newark and all New Jersey municipalities to follow in order to abide by procurement laws and properly spend taxpayer dollars. Newark agreed to implement the recommendations.

To report government fraud, waste, mismanagement or corruption, file a complaint with OSC or call 1-855-OSC-TIPS.

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