State finance officials on Wednesday approved Newark Public Schools’ nearly $500 million, 30-year lease for a single elementary school, brushing past Republican opposition and warnings of a “half-billion-dollar debacle.”
The eight-member Local Finance Board’s approval was required for the district to proceed with the controversial agreement. The state education commissioner and the state comptroller must still sign off.
After hearing more than an hour of fiery testimony, six finance board members present voted 4-2 in favor of the lease, despite concerns about the unusually high price for a single K-8 school serving 667 students.
The district maintains it would be the prudent path to gaining a needed elementary school in the fast-growing Ironbound section of the city, but the deal has drawn opposition for what critics said was its lack of transparency and scrutiny.
Republican lawmakers, including budget leader Sen. Declan O’Scanlon (R-Monmouth) and several Assembly members, logged in or submitted comments criticizing the lease as a secretive, no-bid deal that funneled public money to a politically connected developer for a building the district will not definitely own at the lease’s end.
State Assemblyman Paul Kanitra (R-Ocean) argued that the deal “deserves some really independent scrutiny,” citing developer Scott Fields as a donor to Newark Mayor Ras Baraka and other city officials.
The district told the board this site came to their attention when the property owner approached them and said he was interested in building a facility to lease to the city’s board of education. They saw it as an opportunity to address severe overcrowding in the Ironbound neighborhood, they said, noting the scarcity of options for new construction or available land in that part of the city.
Still, the $1 million per month lease cost is “simply incredulous,” said Micah Rasmussen, director of the Rebovich Institute for New Jersey Politics at Rider University.
Doing the math, Rasmussen said the building alone will cost $15,000 per student per school year, “an egregious misallocation of scarce public resources [that] does not pass the smell test. It doesn’t pass any test.”
In a letter to the finance board on Tuesday, O’Scanlon noted that the first state audit (opens in new tab) of Newark public schools in decades just flagged tens of millions in potential wasted spending — including another no-bid, long-term lease for a stalled museum about the district’s history, and a fitness gym built at district headquarters that also circumvented formal approval and competitive bidding rules.
“If you approve this lease, it will amount to giving a green light to a half billion dollars of more delays, waste, and fraud in Newark while they struggle with meeting basic needs,” he warned.
Twenty Assembly Republicans, led by state Assemblywoman Dawn Fantasia (R-Sussex) and Minority Leader John DiMaio (R-Warren), submitted a joint letter in April to state officials urging them to reject the deal.
State Assemblyman Alex Sauickie (R-Ocean), who like O’Scanlon sent his own letter on Tuesday calling to block the lease, has pushed two bills he says would increase oversight over deals like this, including a measure to solicit at least three competitive proposals for major school construction leases.
After Republicans railed before the finance board about a range of reported district expenses — from travel to conferences in exotic locales to more than $200,000 dollars spent on balloons since 2018 — Newark Superintendent Roger León dismissed the criticisms as “lies.”
“A lot of what you’ve heard, respectfully speaking, was just filled with hot air,” the superintendent told the board.
The board members supporting the deal agreed that the needs were great. “There are basically no properties down there,” said board member Idida Rodriguez of the Ironbound. “It’s almost at full capacity. . . I believe our children deserve the best atmosphere and environments.”
The two board members who voted no on this lease, William Close and board chair Michael Rogers, did not explain their votes.
Earlier in the meeting, Rogers questioned a clause of the lease that could extend the 30-year deal for a decade or two more, or alternatively, have the district purchase the building for $1,000 at the end of the 30-year lease period.
Rogers and others said they wondered why the district would ever pay tens of millions more to extend a lease for another 10 to 20 years if they already had a path to ownership for a nominal $1,000.
“Why? What is that? The whole thing is insane,” Fantasia later reiterated.
On Wednesday, the state Department of Education said the agreement remains under review. The state comptroller’s office said it does not confirm or deny contract reviews.