Bettering Plainfield with the facts since 2005

Tuesday, April 15, 2014

Liberty Village PILOT a question of bakshish?

In former Soviet-bloc countries, 'bakshish' was commonly demanded to get things done.

If the modification of a payment-in-lieu-of-taxes (PILOT) agreement for Liberty Village is to proceed this evening, it will have to be added to the agenda as a new item with the assent of five members of the City Council after failing to be added at last week's agenda-setting session. If the PILOT fails to move forward, I wonder whether it's because of bakshish.

On its face, the matter seems simple enough.

A buyer for Liberty Village, whose owner died over a year ago, is ready, willing and able to step in to make improvements that will dramatically improve the HUD inspection score -- among them, having an on-site superintendent, adding a community room with computer stations for use by residents, as well as a laundry room and improvements to plumbing, electric and sidewalks. The feather in the Mapp administration's cap would be the increase in the PILOT payments from 6.28% of the gross rent roll to 10%.

While no one would probably argue for a 50-year PILOT agreement in this day and age, that is the term that was granted by the Plainfield City Council in 1982. The term is not being abrogated by the proposed changes.

The question on everyone's mind is why there is any difficulty in accepting the (much) improved deal.

But then, this is Plainfield -- or OZ, as Olddoc would say.

When I moved here in 1983, the rap among potential developers was that Plainfield was a place to avoid because of the shakedowns alleged to get the needed votes for projects to move ahead.

During Mayor Mapp's Transition Team's work, the Economic Development subcommittee got an earful of the same sort of reports from those with memories of past Plainfield experience.

The subcommittee's push was to 'rebrand' the City, convincing those with money to invest in projects that Plainfield had turned the corner, that development would be welcomed and the city's stance, while it might be tough, would be fair and honest.

But old habits may die hard.

With $9 million proposed to change hands, the question arises whether some are looking to 'monetize' the transaction in some of the old ways -- whether through 'finder's fees' or 'referrals' or whatever the term du jour is.

In other words, bakshish. Grease. Something to make the wheels go round.

In the 1970s, I worked for a rare-book seller in New York City who had a worldwide network of clients, including many university libraries in what were then countries behind the Iron Curtain.

Very early on, I learned from my boss Sam, who as a teenager had led his mother and sister in escaping the Warsaw Ghetto to safety behind the Russian lines, about bakshish in the rarefied world of historic and rare books.

Sam regularly engaged in duplicitous billings to university libraries in the Soviet Union, Poland and the DDR -- enclosing fake invoices showing lower values in the packages of books themselves and settling the actual purchases through letters of credit at the correct prices.

The reason was not to cheat the governments of 'douane' (duties) as the libraries were exempted, but to thwart the corrupt custom officials who would hold up delivery of any package suspected to contain items of value until the recipient had coughed up 'bakshish' -- cash for the release of the goods.

With the fall of the Soviet Union, I had quite forgotten about bakshish.

Perhaps I shouldn't have?

  -- Dan Damon [follow]

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Bob said...

You have wonder why some people on the City Council vote down items that make sense for the people of Plainfield. Now I know why. Won't it be nice to be rid of these dead weights sponging off the tax payers.

Anonymous said...

Dan, What is not said is what happens if there is a sale and the PILOT is not modified. Would it expire? If expiration and a return to full rate paying is the alternative, then modification of the PILOT let's the owner sell at a higher price because of the lower tax rate. The council should not enrich the owner who failed to maintain the property in the first place, even if the city is cut in on the deal.

Anonymous said...

Is Liberty Village in the 3rd Ward? That's the only reason I can see for the New Democrats supporting continuation of the PILOT where they face a tough election. It is too bad that for the sake of votes they are willing to enrich the current owners (which is what PILOTs do)who have run down the property.

Talk of approving transfer to the buyer with an increase in PILOT to 10% of rent from 6.25% is disingenuous. Union County compensates the city for the tax revenue lost at either rate. The city is "made whole" either way.

Do you know who is not made whole? The School District. No one compensates the School District for the revenue it loses from a PILOT. Councilmembers should ask themselves if enriching the owners for whatever benefit is worth cutting revenue to our school children.

Rebecca Williams said...

To 9:14 am: Liberty Village in the 4th Ward. I don't see what supporting the PILOT for new owners has to do with being a member of the New Democrats. Councilor Tracey Brown voted in favor of it, and she is not a New Democrat. She lives in the 2nd Ward, but is the City-wide At-large council representative. The other councilors offered no reason for voting no.