Rogge Brigantine Real Estate Deals

POSTED: July 05, 1989

BRIGANTINE, N.J. — John A. Rogge, who prides himself on three decades of being the biggest real estate broker in town, twice sold as his own a piece of waterfront land here that he did not own.

The half-acre belonged to the city, a gift from a New York developer accepted in 1965 by Brigantine’s City Commission, one of whose three members back then was John A. Rogge.

In an interview recently, Rogge, 69, said he had no idea how he could have failed to know about the 1965 gift. “If I did know about it in 1965, I forgot about it in 1979,” Rogge said.

He denied any wrongdoing. He noted that he has paid taxes on the disputed parcel for years and that three title companies have issued title insurance policies on the city-owned land to him, to the first buyers and then – after the buyers defaulted and he regained the property through foreclosure – to a second set of buyers.

The second buyers sued Rogge, alleging fraud. Those buyers, in a negotiated settlement, received a guarantee of part of the proceeds if the land was ever resold for more than $1.2 million, and they received $550,000 from two title companies that had guaranteed the title. Two other title companies involved in the second purchase paid the city $110,000 for the disputed parcel, which was then deeded to Rogge. Rogge then set out to sell the land a third time.

After a decade of failed efforts to turn a profit on the parcel and some adjoining land that he owned fronting 1,300 feet of the St. George’s Thorofare, and after nearly a half-million dollars in legal fees, Rogge said last month that he figured he was about to sell for more money than the first two sales combined.

“I had a guy who would pay me $2 million if I could get 10 lots” and the other government approvals required to build 20 housing units, Rogge said. He declined to identify the prospective buyer. The housing would have to be squeezed onto a narrow strip totaling 7.2 acres, of which 5.3 acres are wetlands or under water. Moreover, the land, which is zoned for commercial development that prohibits housing, has been carried on the tax rolls for years at a value of less than $200,000, possibly in contravention of state property assessment law.

Rogge knew what rezoning would require, because he served on the City

Commission for 22 years, the last 10 of them as mayor, before stepping down in 1980. His application for rezoning last August spurred his successor, J. Edward Kline, into action. Kline, raising the specter of excessive development, said the city must move quickly.

He appeared at a zoning hearing and announced that the city would buy the land, halting the proceedings and leaving unanswered the question of whether the zoning change would have been approved.

By May, the city was poised to authorize bonds to buy the land immediately for $1.58 million and seek reimbursement later from Green Acres, the state’s open-space land fund.

Kline urged quick action even though Green Acres officials had written the city a cautionary letter, advising that the state would reimburse only for what it considered the fair market value, and that if its appraisal was less than the purchase price, Brigantine taxpayers would have to pay the difference. Green Acres has yet to do its own appraisal.

Kline had agreed that the city would pay $1.58 million after appraisals were done for Rogge and for the city, and both appraisals set slightly higher values than that.

If the deal were to bring that price, one beneficiary would be Kline’s friend and political ally Frank V. Drake, owner of the Lagoon Restaurant & Lounge in Brigantine. Drake was among the second buyers who agreed to purchase the land in 1982 for $815,000 and so would share in the proceeds from any sale above $1.2 million.

Drake said he thought the land was worth much more than Kline wants the city to pay, but said he would not buy it for the price the city has agreed to. Why not? Drake said there were too many uncertainties about obtaining necessary government permits, a process he said could take several years.

Knowing the history of Rogge and the land, when the bond and land-purchase ordinances were introduced last month, two homeowners rose to ask Kline why the rush. They also questioned whether Rogge had clear title, whether city maps had been altered improperly, and whether Kline was looking out for the interests of taxpayers.

Kline thanked the homeowners, Madelyn Evans and Jeanne Behr, for their comments but said that the city had to act fast, or Rogge would sell to a developer. When Evans said she believed the deal involved fraud, Kline rolled his eyes.

But others also had questions. Some wanted to know why Kline was hostile to Behr, 66, especially since as an investor in the Rogge lands, she stood to net about $100,000 if the deal went through. Behr said she was more interested in an honest deal than a quick buck.

By the next meeting, the mood of residents had turned skeptical, with numerous questions about the deal. Kline tabled his measure.

Later, Kline said he stalled the bond sale because Behr had contended that she must sign any transfer of title and that she would refuse to do so. Rogge’s attorney, Julius Konschak, said he had since asked a Superior Court judge to rule that Behr’s signature was not needed to transfer the title.

Meanwhile, Behr said that her name had been removed improperly from property ownership records in the Atlantic County courthouse, an allegation that County Clerk Lori Mooney has said appears to have merit. Konschak said that he could not explain the deletion, but that he regarded it as insignificant and said Behr’s 10 percent interest in the property was secure. Kline promised to look into the matter of the deletion.

Meanwhile, two more Brigantine commission meetings have turned into acrimonious exchanges as more documents surrounding the deal have surfaced and as more residents have asked more questions.

The proposal that a bond issue be used to buy the land has angered many residents who want the land as open space but do not like the way the deal is being executed and think its terms may be unnecessarily favorable to Rogge. The residents are angry that Kline tried to rush the deal through, that he had refused to answer some questions at commission meetings, that he had failed to make all records available, and that, as it now stands, the price of the land represents $150 per resident, based on the official population estimate of 10,000.

The anger has not abated. At a commission meeting, two women complained that Kline was engaging in belittling and personal attacks on those who inquire about the deal, saying they were “misinformed” and “spreading rumors.” Relations between commissioners and questioners deteriorated even further when Commissioner Robert J. Shipley addressed one woman in the audience as “sweetheart.”

Kline has tried to shut off some of this growing furor by mandating a new policy: Public records now may be examined only when residents make appointments in advance. Evans is suing the city for withholding public documents relating to the Rogge deal, and she and others keep asking why Kline has not taken the lead in trying to negotiate a lower price.

Some real estate agents have told the City Commission that they think the land is worth less than the $1.475 million to be paid for one piece and $110,000 for the adjoining half-acre that was the subject of the fraud litigation.

“Who in their right mind would pay $1.4 million for this land?” Dee Wineland, a veteran Brigantine real estate agent, asked at a commission meeting.

City tax records show that the two Rogge parcels, on the date of the appraisal justifying the nearly $1.6 million price, were valued for tax purposes at $196,200. Under New Jersey law, real property is to be assessed at fair market value, and the latest state survey shows that, overall, Brigantine property is appraised at 93.4 percent of market value.

The assessment of the Rogge land indicates either that the land value is slightly more than $200,000 and the city is thus prepared to pay eight times more than its market value, or that the land has been assessed at about 12 percent of value, and that Rogge and his investors have escaped paying more than $24,000 annually in property taxes.

Kline, in interviews and public meetings, continues to characterize the nearly $1.6 million price as “a real bargain.”

And he has repeatedly said that Rogge has “an absolute right” to build 10 duplexes on the property, which justifies a price of up to $2 million. Both the Rogge and city appraisals assume that all government approvals required to build 20 housing units have already been obtained, and they do not take into account the impact of Gov. Kean’s emergency order of Oct. 3 regulating all waterfront development.

But city records, interviews with real estate agents and even Rogge’s remarks in an interview do not support Kline’s “absolute right” statements.

The property is zoned B-3, which requires a minimum 20-acre lot size for commercial development and does not allow housing.

Bulkhead permits exist to protect the waterfront and to fill the wetlands, which would be essential to development. The permits expire in August; the deal is scheduled to close July 19, with the city paying Rogge $166 in damages each day it is delayed.

But the state Department of Environmental Protection, in a recent letter to the Brigantine Residents Association, said the permits were good only if the land were developed as originally proposed – as a marina.

The permits were approved for a marina, a project the state later killed

because Evans produced evidence that it would pollute the richest clam beds in New Jersey.

When residents at a meeting noted that Rogge would need a variety of variances and permits to build housing – the paper work that Kline’s friend Drake said would deter him from paying the asking price for the land – Kline backed away from his “absolute right” argument. He said the site could be developed without variances, however, as a convenience store, a restaurant, a bank or a real estate office.

Some in the audience scoffed. Anne Phillips, president of the Brigantine Residents Association, parried with Kline, and he acknowledged that the site was not large enough for a convenience store or restaurant. But Kline insisted that a bank building a new branch would pay $1.6 million for the land ”because of the view.”

An interesting twist was added by the would-be seller, Rogge. He said recently that the land may, indeed, not be developable.

Asked if the land may be too narrow and too much of it submerged to ever be developed under current regulations, Rogge said: “I would hope not. Oh, I would hope not. But it may not be buildable. . . . I would have preferred to see it developed as a beautiful yacht harbor. I live just across the way. I don’t want a bunch of houses put up there.”

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