KEYPORT -- Two Keyport council members should have recused themselves from a vote on a land deal at the waterfront that could enrich them or their family members, a lawsuit filed by two other council members says.
Councilman Joseph Merla and Council President Melissa Vecchio voted to reject a proposal on June 17 that would have allowed the council to review a plan to divide an unused strip of property in the Keyport Waterfront Park into 22 lots, the lawsuit said.
They cast deciding votes even though the Merla and Vecchio families and business partners own commercial properties next to the undeveloped land, the lawsuit said.
The lawsuit was filed Aug. 1 in state Superior Court by fellow council members Kathleen McNamara and Heather Brady.
A full copy of the lawsuit can be seen at the bottom of this story.
The complaint came as residents have taken to Facebook expressing their dismay over developing part of the waterfront park. And it spotlighted Merla, who was elected to the council last November despite having pleaded guilty in 2007 for money laundering as part of the FBI's Operation Bid Rig.
The lawsuit said Merla owns or is a partner in businesses that control at least a dozen commercial properties on West Front Street and Broad Street, typically with his business partner Kenneth Schwartz.
Vecchio's uncle by marriage is Larry Vecchio, owner of VRI Homes in Keyport, who also owns several LLCs and corporations tied to commercial properties at the Keyport waterfront, the lawsuit said.
Schwartz, the lawsuit said, is a realtor associate on the roster of VRI.
In April 2024, before Merla was elected, Vecchio and other council members unanimously authorized a contract to survey a major, borough-owned subdivision with the intention of requesting a proposal to see how best to divide the lots between the waterfront park and the commercial district, the lawsuit said.
Seven months later, according to the lawsuit, borough administrator Kimberly Humphrey submitted to the planning board the survey's recommendation to create 22 new lots on the property.
McNamara and Brady, however, said the plans should have been reviewed first by the council. In June, McNamara made a motion to withdraw the plan for the waterfront lots since they weren't approved by the council.
The motion failed, 4-3, with Merla and Vecchio voting no, allowing the propsoed waterfront subdivisions to move foward, the lawsuit said.
The lawsuit said Merla and Vecchio, or their business partners or family members, could enrich themselves if they acquire the new land. And it alleged they were in violation of the the Local Government Ethics Code, Municipal Land Use Law, the Faulkner Act, the Borough Code and the Borough’s Charter.
Merla told the Asbury Park Press he couldn't comment. Vecchio didn't immediately respond to request for comment.
The issue, however, played out on Facebook, where Schwartz said the lots connected to his properties are mostly gravel.
"If it would make everyone happy I would be happy to reject the ownership of these nonconsequential 'lots,'" he wrote. "The obvious reason they made 22 lots is that the town I think wanted to be able to get rid of these 'lots' as they probably did not want to maintain them or be liable for them. Truth is, neither do I."
Michael L. Diamond is a business reporter for the Asbury Park Press. He has been writing about the New Jersey economy and health care industry since 1999. He can be reached at [email protected].