Credit: (Elise Young/NJ Spotlight News)The state Attorney General’s Office is investigating real-estate transactions involving property owned by Trenton’s local government, deals made amid an effort by the state’s beleaguered capital city to turn around hundreds of blighted properties.
A team of State Police investigators, showing search warrants, entered the Douglas H. Palmer City Hall Annex on Tuesday morning to review records in the Department of Housing and Economic Development and the Division of Inspections. Each office is central to Mayor Reed Gusciora’s push to sell more than 1,500 parcels to private developers to buoy tax revenue in a city that can’t pay its bills without annual budget infusions from the state Department of Community Affairs.
Such properties have languished for generations while Trenton, midway between Manhattan and Philadelphia, has become more dependent on state taxpayer aid.
Gusciora, a Democratic former assemblyman who is running for a third mayoral term in November, came to office promising to draw private investment to the city of 8 square miles, where at least 50% of land, occupied by nonprofits and government, is tax-exempt.
In recent months, potential buyers have complained to elected officials and others about failed attempts to acquire and transform property including once-grand mansions belonged to industry titans, blocks of derelict rowhouses and former factory sites turned illegal dumping grounds.
‘Things are missing’
“We have raised red flags,” Councilwoman Jasi Edwards told NJ Spotlight News outside the annex on Tuesday morning, as investigators were inside. Residents and business owners, she said, tell the same story: “They can’t get the list, their application is missing, please file again, things are missing from the application. And when they finally, finally get to that last step, the property is sold to someone else.”
She added: “There are investigations around that and that’s all I can speak to.”
The search was conducted by New Jersey State Police detectives and personnel from the Division of Criminal Justice and Office of Public Integrity and Accountability, whose duties include investigating government corruption and misconduct.
Credit: (Elise Young/NJ Spotlight News)“No further information will be available as the investigation is ongoing,” Dan Prochilo, a spokesman for Attorney General Jennifer Davenport, said in an email.
At 9:30 a.m., at least eight law-enforcement vehicles – some trooper SUVs and others unmarked – were parked beside the annex, where the targeted offices are located.
It was not known what investigators were seeking in particular. Search warrants were sealed by court order, according to Davenport’s office. Such a step is taken typically to protect the integrity of an ongoing inquiry.
In a statement, the city said the case involved “alleged misconduct by a former employee” in Housing and Economic Development. City officials “initiated an internal investigation” and referred the matter to the Attorney General’s Office two years ago, it said.
“The city will cooperate fully with the state’s investigation,” the statement read.
Forensic audit
In April, NJ Spotlight News published details of a long-hidden forensic audit of city finances that backed up 2025 reporting by The Jersey Vindicator. Using public records, the Vindicator documented how City Hall, under Gusciora’s leadership, spent millions of dollars of COVID-19 relief money and other funding in nonstandard ways, particularly within the Department of Recreation, Natural Resources and Culture.
The city reimbursed recreation employees $200,000 for snacks, laundry services and other purported government needs charged to personal credit cards, much without documentation. It allowed runaway overtime. And it manipulated no-bid contracts for a milelong park renovation project that skirted Department of Environmental Protection rules and left hundreds of disaster-prone properties more vulnerable to Delaware River flooding.
All that occurred while the state Department of Community Affairs had fiscal monitors in place to oversee spending and hiring as a condition placed on the annual state aid to the city. Since 2018, that assistance has totaled more than $250 million.
Last month, the state awarded Trenton a $7.5 million grant to the Housing and Economic Development Department to demolish or stabilize vacant and abandoned city-owned property.
“Thanks to the work of our Department of Housing & Economic Development under Interim Director Yolanda Vasquez, and its partnership with the Department of Community Affairs, hazardous properties throughout the city are being taken down, enabling new constructions & creating a healthier environment for our residents,” Gusciora said in a statement last week. “These first projects are just the start of what this funding has made possible for our city.”