A financial Shell Game - the pathetic saga of back taxes and Wilmorite
If you owes back taxes would you get a break? Heck, if you were behind in your mortgage payments would you get a break?
Something stinks here… via the D&C
While separate Wilmot family companies are moving ahead on multimillion-dollar overhauls of two suburban malls, the one controlling the downtown Sibley Building owes the city $18 million in past-due loans and other payments.
{snip]
Some of RochWil’s payments are more than 12 years delinquent. But by creating RochWil as a limited liability company, with the Sibley Building being its sole asset, Wilmorite and all other Wilmot family assets are shielded from liability.
“There is nothing nefarious about that.” [Thomas Richards, the city's corporation counsel] said. “Every real estate developer on the planet does that.”
Wilmot’s response?
“I think the city is a little fed up with us,” Wilmot said.
So a Wilmot creates a limited limited company (RochWil) with a single asset. Now that single asset is not valued as highly and is in arrears to the city. The city stamps its feet, jumps up and down but has no legal recourse (or limited recourse) to collect because legally there are no assets.
How about this. Say no to Wilmot, Wilmorite or other development until this is made right. Somehow shielding developer from poor business decisions or business failure is the wrong thing to do. Just because the city can’t or won’t collect doesn’t mean that the entire Wilmot activity in the City or County needs to be rewarded with additional contacts or tax shelters.
Oh, one more thing. no tenants downtown? Anyone look at why? How about all those Wilmorite malls in the ‘burbs. This is like Plexico Burris blaming the gun for shooting himself in the leg.
If you read between the lines in the article you see hints that RenSquare ultimately “saves” Wilmont and the Sibley Building because property values increase due to increased downtown development.
RenSquare is Wilmot’s bail out.
Pathetic
You can read the background below the fold ..
How does this happen? (again via the article)
The problem is this: After buying the building in 1992, Wilmot said, company officials initially proposed converting the first six levels to parking. The city didn’t like that idea, however, and pushed instead for retail and office uses. The plan seemed viable, Wilmot said, but lenders balked at the estimated $35 million in development costs.
Ultimately, Wilmorite (or RochWil) turned to the National Electrical Benefit Fund, a union pension fund for electrical workers that Wilmorite had worked with previously.
Managers of the fund offered to loan about $17 million to the project, but first they required that there be on-site parking, a PILOT agreement to cap taxes, a $10 million investment by the developer, $10 million secured in outside grants, and new leases for at least 100,000 square feet of the building.
The city loaned RochWil $5.5 million and St. Joseph’s parking garage was privately built. Monroe County agreed to have MCC move in, and the PILOT agreement went through. And the pension fund got first priority to collect.
Related posts:
- Shell Game, COMIDA Tax breaks for Hotels don’t result in revenue to Monroe County.
- D&C on Brooks/Minarik’s Financial Shell Game Plan
- Billionaire Wilmorite Corp Gets more Tax money
- But, this time it will be different Charlie Brown - really. The continuing COMIDA saga
- MP: Government Subsidies Part of Wilmorite Business Plan
I blame Plaxico’s sweatpants.
1. MCC is the biggest tenant of the Sibley Building. It’s difficult to imagine how Ren Square “saves” the Sibley building by taking away its best tenant. In actuality, building Ren Square will probably result in a public money bailout of the Sibley Building within two years.
2. A little local history. If you are wondering why the Wilmot family, the suburban mall owner, also owns the Sibley Building…. here’s why. Back in the late 1980’s, when the Wilmots were promoting the ill-fated Irondequoit Mall, they struck a deal with May Company: Build a store at our so-so mall and we’ll buy your white elephant downtown building. By the time the mall opened, Sibley’s became known as Kaufmann’s and the downtown store, now in the hands of the Wilmots, was closed for good. A few short years later, public money was pumped into the Sibley Building project, and now the Wilmots are weasling on the deal… anything sound familar here?
Look for more of this yarn in a few days… I’m pulling the threads together now.
So does Wilmot
Look forward to it.
First off RenSquare saves Wilmot not the Sibley building - two different things
My point was Wilmot will be able to “sell” the building because of supposedly increased property value. MCC will have a place to go, the entire building can be empty. RenSquare magically boosts the values downtown (so we will be told) and Wilmorite will dump the building.
I agree with the assessment that public money will be involved - Someone will find a way to make it shovel/renovation ready and the cycle continues