James got romance while co-defendant Tamika Riley made profits by quickly selling the land instead of redeveloping it as required, Kwon said.
"The only people who didn't benefit from these land deals were the people of Newark," Kwon told the jury.
The case could send James to prison and tarnish a legacy he built over 20 years as mayor of the state's largest city. He championed a number of large public projects, including the Prudential Center, a pro hockey arena that opened in October.
James is accused of arranging for the sale of nine city-owned properties at a discounted rate of $46,000 to Riley, who then sold them for $665,000, Kwon said.
Witnesses, including members of James' security detail, will testify about trips and gifts exchanged between Riley and James, a married man nearly twice her age, Kwon said.
James' defense lawyer Thomas Ashley, however, said Riley "was treated the same way as everyone else."
"Sharpe James was not corrupt. He was not a crook," Ashley told the jury. James revitalized a struggling city, Ashley said, "That legacy will live."
The 12-person jury and seven alternates from around northern New Jersey were seated Friday following four days of selection. Opening statements were delayed Monday as the judge excused two jurors without explanation.
During jury selection last week, potential jurors were asked dozens of questions, including if they could judge James and Riley fairly if they heard evidence that they had an affair while James was married.
The trial is expected to last several months. Afterward, James is to be tried on charges he used city-issued credit cards to pay for $58,000 worth of personal expenses while he was mayor, including trips with several women other than his wife, to Martha's Vineyard, Puerto Rico, the Dominican Republic and Rio de Janeiro.
The charges for both trials came from an indictment July 12. James, 72, and Riley, 38, pleaded innocent and are free on bail.
The courtroom is just a block from City Hall, where James presided from 1986 to 2006 before deciding not to seek a sixth term. He also served as a state senator from 1999 to January 2008, when he left office after not seeking re-election.
James faces five charges, including fraud and conspiracy. Riley faces those charges and eight others, including tax evasion.
Under federal advisory guidelines, James could face seven to eight years in prison if he is convicted on all counts. But a judge could impose a much stiffer penalty - as much as 20 years on some individual counts.
James is one of the best-known figures snared in a series of corruption cases brought by the U.S. Attorney's office. In the past several years, federal prosecutors garnered more than 100 public corruption convictions statewide of elected and appointed officials and people doing business with them, such as contractors.
