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LYNDHURST, NJ-In a letter sent to EnCap October 5, the State Environmental Infrastructure Trust informed the developer that it could no longer draw from the nearly $300 million in publicly supported low-interest loans that were issued to cover the costs of the Meadowlands project. EnCap was also instructed to withdraw three pending applications for almost $3.5 million in withdrawals from the loan pool.

This is the latest setback for the once-promising project, which sought to place luxury housing, hotels and golf courses on land that was formerly used as landfills. According to Christopher Gale, an official with the New Jersey Meadowlands Commission, EnCap was chosen to remediate and redevelop the site because “it was judged at the time that they had unique experience from their landfills-to-golf project in Houston.” The project he refers to is the Wildcat Golf Club, a two-course club on the site of a former Texas landfill.

EnCap broke ground and began remediating the site in 2004. According to published reports, work ground to a halt earlier this year as costs began to rise and the Department of Environmental Protection slapped EnCap with a $1-million fine for failing to control methane emissions from the site. EnCap requested permission to replace the contractor responsible for cleaning up the site, Mactec Development Corporation, but the request was rejected by state officials. The Meadowlands Commission told Real Estate New Jersey that Mactec has since left the site, and Bergan County court records show that Mactec has filed claims seeking $25 million in back payments from EnCap.

Previously published reports indicate that, in an effort to cover the rising costs of the project, EnCap attempted to raise almost $400 million by issuing bonds backed by future property tax breaks the company expected to receive from North Arlington and Rutherford. The state rejected the proposal.

The Meadowlands Commission issued two letters, on September 19 and October 5, threatening to terminate EnCap’s development agreement on November 20 unless the company resumes work on the site and pays a $16 million security guarantee. Gale informed RENJ that EnCap has not yet responded to the letters.

On September 20, the DEP issued an Administrative Order and Notice of Civil Administrative Penalty Assessment. The Aonocapa, a copy of which was obtained by RENJ, lists many violations of state environmental protection laws at the Meadowlands site. These violations include:

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