We kind of get that feeling all over again when we read through the documents that comprise Ordinance 17-80 on this week's Trenton City Council Docket. Approval of this ordinance would grant Woodrose Properties Golden Swan Urban Renewal LLC a ten year tax abatement for the property at 101 South Warren Street.
Previously, we filled you in on some of the history of the property...how the city has bent over backwards for the owner, Woodrose Properties. And we also noted how Woodrose's principal, former Senator Robert Torricelli, has had no problem contributing money to the campaigns of past and present mayors and council members in the city of Trenton.
Let's take a little deeper dive into the Torricelli/Woodrose request for the tax abatement.
On page three of Attachment "A" of the ordinance, the developer describes the proposed project as a
"substantial rehabilitation improvement and conversion of the existing mixed-use building."
A little further down in the package, the developer estimates $181,000 in construction costs, $45,000 for professional fees and a marketing/advertising cost of $4,500. This brings the entire cost to $230,500. And the work is anticipated to take 4 months.
They are asking the city to grant a 10 year tax abatement of 10% of the estimated annual revenue of the finished project minus a deduction for a vacancy rate. Per the calculations in the application, the annual net income of the project would be $143,404.80 and the city, if the abatement is granted would receive $14,340 a year in taxes.
Here's what has left us scratching our heads. The developer states in the application that...
...based upon the occupancy of the existing apartments...and the location in downtown Trenton (near multiple State Offices and private offices) ...there is a strong demand for market-rate apartments....
OK. If, and that is a big if, there is a strong demand for market-rate apartments, why are they calculating on a vacancy rate? Are they just being conservative in the figuring?
We happen to know someone with rental properties just a block away from the Golden Swan. We asked him about this alleged "strong demand" for market-rate apartments. He suggested that, based upon his experience with his two buildings, the assumption was not true. Our friend admitted that he hasn't under taken a recent study but he noted that Torricelli didn't offer up any proof either.
(NOTE: there is some sort of exhibit referenced in but not included with the documents we received that was pointed to as depicting this demand).
Just to make sure that the city administration on the governing body see how important it is for them to approve this abatement, Torricelli offers up this subtle threat:
Does he not realize that the city has ordinances on the books about vacant and abandoned buildings and that should he "shut down" this one, he'd still have to maintain it and keep it secured unless/until it might be sold?
Is blackmailing the city council and the mayor the way to get what one wants?
Folks, we are talking about a private, for-profit investor who obtained the property for $1, had the city do some demo and remediation work for him, gave him various PILOTS on parts of the projects and who has the two large first floor spaces rented. His taxes went up and now he wants the city to cut him a break or he'll pack up and go home.
Not likely. He's got too much other property in town to just walk away.
Nothing about this project screams "revitalization". The work of saving the historic building is already done. The "conversion" is not going to add to the city's employment rolls. Page five of the application clearly states that there will be no additional staff hired to manage the building (and, it should be noted, those that currently do are located outside of the city). They claim that the additional retail space when rented will bring jobs to downtown, but we believe the retail space to already be rented. (It appears as though this package was prepared last spring but only just recently submitted to the city and doesn't take into account that there is now a dental office located in the building). And, of course, there is the ever popular "construction jobs" that will be "created"; an estimated equivalency of 12 full-time jobs over the four month construction period. Is this really worth a 10 year tax abatement in a city strapped for cash?
Why can't Mr. Torricelli reach into his very deep pockets and fund the conversion himself? He certainly isn't shy about opening his checkbook.
A quick and by no means exhaustive search of NJ ELEC records show that since 1981, Torricelli has personally (this is his money, not the money in his various campaign accounts) given over $117,000 to various political campaigns (we actually have records of contributions he's made that for some reason don't show up in the ELEC database and thus aren't included in that number). Over half of that amount, $64,500, was given out since December 24, 2013. (Yes, we thought that was an interesting date, too).
Why did we start counting on Christmas Eve of 2013? Because according to the ELEC records that was the date that Torricelli contributed $2,000 to Eric Jackson's 2014 run for mayor. Between that date and June 5, 2014, Torricelli (and his Woodrose Properties, LLC) gave a total of $6,200 to the Jackson campaign. He exceeded the $2,600 limit for the regular campaign (May election) by giving $1,000 from the LLC (an NJ ELEC no-no). Kevin Moriarty explained it here and here.
As has been noted repeatedly, we have no idea who may have contributed how much to Eric Jackson in the last three years because it has been that long since he has filed a campaign report.
North Ward Councilwoman Marge Caldwell Wilson also received a modest $250 contribution from Torricelli in May of 2014.
Campaign contributions are not the only way that Torricelli shows his generosity. After leaving the senate in the wake of a campaign finance scandal, he set up a private foundation with some of his unused campaign funds.
Unlike Eric Jackson who can't seem to file any paperwork on time, you can find the tax returns from Torricelli's Rosemont Foundation online. Here are links to the ones from 2008, 2009, 2010, 2011, 2012, 2013, 2014 and 2015.
As we have stated before, foundations and other non-profits set up by public officials offer them ample ways to circumvent campaign finance rules and "spread the wealth." For instance, there was the infamous "Turkey Give Away" on December 22, 2013. We all know it was just a coincidence that he was seeking approval to build a "temporary" (it's still there today, four years later) surface parking lot on the old Pete Lorenzo's restaurant site at about the same time. The fact that his 2013 tax return for the foundation shows over $8,700 spent for the turkeys has no relation to him having gotten the go ahead on his plan.
Well, even though Mayor Jackson couldn't be bothered to file the required 990s, the Rosemont Foundation filed theirs. You guessed it...in 2015 Moving Trenton Together received $2,500 from Torricelli's foundation.
Now, we are not saying that any of this is illegal. And we are not saying that any of Torricelli's largesse is meant to influence any decisions on the part of the Jackson administration, the council or any other government body that can give a thumbs up or down to things like planning and zoning approvals or tax abatements.
What we are saying is that Mr. Torricelli certainly has the ways and means to do the work at the Golden Swan himself. If it is such a good investment that will make the property profitable, then he should dig into his own pocket and keep his hand out of the taxpayer's!
{NOTE: while we were writing this, the Trentonian's David Foster posted a piece on the application for a long term tax abatement. He covers much of the same ground as we have here, but he's got a couple of interesting quotes from Mr. Torricelli.}
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