Matt Kadosh first published this at TapintoNewark.

The legal costs of the Newark School Board’s efforts to reacquire two buildings sold by the previous administration has surpassed the total value of the buildings.

Lawyers have collected more than $2.4 million in legal fees from three government-funded entities so far in the dispute that started in 2020 over the State Street and Maple Avenue school buildings. 

Both facilities were sold when the district was still run by the state in an effort to close budget gaps.

Legal invoices obtained through the Open Public Records Act show that the Newark Board of Education alone has spent $1.33 million in legal fees after it sued the Newark Housing Authority (NHA) and a public charter school-related entity to try to claw back the two buildings. 

NHA has spent over $815,000, and Friends of Team, a non-profit that supports the mission of KIPP charter schools in Newark, has spent nearly $300,000.

TAPInto Newark last reported on the spending in December 2022, when legal fees had surpassed $1 million.

The ongoing and mounting costs are raising alarms among some city officials. North Ward Councilman Anibal Ramos Jr., who chairs the City Council’s Education Committee, said he plans to request a explanation on the significant amount of legal fees at the next committee hearing.

The Newark Housing Authority is also concerned. 

“The intent of the federal funds we receive are to improve and invest in the housing stock we have, thereby improving the lives of our residents and participants,” said the housing authority’s executive director, Leonard J. Spicer. “Any time those funds are diverted to other matters that don’t directly or indirectly contribute to that mission, I am disheartened.” 

The school system sued the Newark Housing Authority because it had helped to sell the two unused and dilapidated buildings under state-appointed Superintendent Chris Cerf. The Newark schools’ lawsuit alleges that the NHA improperly sold the buildings, one of which is now a charter school. The other was to be the Newark Boys Chorus School. The Newark Boys Chorus School went on to rent from the district instead and, under the weight of financial burdens, closed on October 31.

Spicer added that he’s “hopeful that we can address this matter in short order with the school board and begin to foster an environment in which we can work in partnership.”

Newark Board of Education members did not vote on entering into litigation in 2020 in state Superior Court in Essex County before it was filed by the district. The Newark Public Schools declined to comment for this article. 

“This district does not comment on litigation cases,” school district spokesperson Nancy Deering said.

When the litigation started, Superintendent Roger Leon said that the school district is growing and “that’s going to require some of those buildings that we sold to be unsold.” TAPinto Newark has reported that a third of Newark’s schools are at least one-third under enrolled and some are more than half-empty. 

The Maple Avenue School, which was not being used at the time it was sold and would have cost the district millions to repair, was sold in 2017 for $1.2 million to the Hanini Group, a Newark-based developer, which initially planned to convert it into residences. State Street School was sold for $650,000 in 2019, also to the Hanini Group. 

The building on Maple Avenue, which has since opened as KIPP Seek Academy, serves 561 charter school students, according to KIPP. Friends of Team had spent just under $300,000 to defend its position in the lawsuit as of November, a spokesperson for the nonprofit said.

“Our diversion of resources to legal fees is unfortunate, but necessary to ensure what’s fair and minimize disruptions to our students,” Drew Martin, executive director of KIPP New Jersey, said in a statement. “Newark families deserve to feel like their needs are prioritized above all else.”

Hanini Group did not return emailed requests for comment.

Meanwhile, although the district settled with Hanini about the State Street building, those costs continue to mount because the district is still in litigation with the NHA over the State Street building. In fact, arguments in that case were heard in late November before Superior Court Judge Lisa M. Adubato.

Among the issues she decided on was NHA’s argument that the school district should pay the NHA’s legal fees based on a clause in the sale agreement — a matter Adubato said a prior judge in this case had already decided. Adubato still heard arguments about the issue, before ruling against the NHA.

Details of the settlement between the district and Hanini remain secret, and TAPinto Newark has filed a lawsuit under the Open Public Records Act (OPRA) to force the district to release the details. 

Legal invoices submitted to the public schools show that from June through August, the district was billed a total of $21,535 for its defense of TAPinto Newark’s OPRA lawsuit seeking to have redactions lifted from the settlement agreement between Hanini Group and the public schools regarding the State Street School building.

In July alone, the Newark Public Schools spent $13,535 in its case to retain the redactions with three attorneys billing a total of 66.8 hours at $200 per hour, which is $25 per hour higher than what the same attorneys billed for the other litigation concerning the State Street and Maple Avenue schools.

While the redactions in the settlement agreement have not been lifted four months after a Superior Court judge heard arguments in the lawsuit, which was initially lodged in June, some details about the plans for the building have emerged through other public records obtained by TAPinto Newark.

The Newark Public Schools have sought up to $5.05 million from the New Jersey Historic Trust to rebuild the school, originally constructed in 1845, and convert it into a museum detailing the school district’s history, according to the school district’s grant application obtained through an OPRA request over the summer.

“State Street School is one of the oldest public schools in Newark, significant for its leading role in educating African Americans during a period of segregation in education,” the application states.

The plan is to open the building to visitors, including students and teachers.