At its meeting last night, Trenton’s City Council voted against applying to the US Department of Justice for a Community Oriented Policing Services (COPS) grant that, if awarded, would have allowed the City of Trenton to re-hire up to 12 police officer positions laid off two years ago. In a city suffering from reduced police manpower and increased crime, why turn down an opportunity to get some free federal dollars? Because the dollars would not be free.
The COPS grant could have been as much as $1.5 Million Dollars, but the terms of the federal program would have required that the City guarantee that it would fund the remaining cost of $2.27 Million for the 12 officers over the three years of the grant, according to the Times article today by Jenna Pizzi. The City is currently benefiting from a $3 Million COPS grant awarded last year to hire another 12 officers, but the matching requirement for that grant was far less expensive. The City was able to get a one-time waiver based on extraordinary financial circumstances.
Council’s vote had to have been a difficult decision to make, even though the vote tally was decisive, unanimous in declining to submit the application except for At-Large Councilman Alex Bethea’s lone vote in favor. Mr. Bethea appealed to his colleagues’ duty to safeguard the public safety of its citizens as its primary responsibility. Acknowledging the tough situation Trenton is in, he said, “We are in a crisis. We have a responsibility to protect our city.”
Cognizant as they are to the ongoing crisis on the streets that Trenton faces, the main consideration for every other Council member was financial. As much as we want the Federal money, as much as we want to return cops to the beat, we simply cannot afford the $2.26 Million that Trenton’s taxpayers would need to provide in order to do so. In the absence of any representation from the City that there were alternate sources of revenue to cover the matching funds, the Councilmembers quite reasonably concluded that local property taxes would be raised as a consequence. And all but Mr. Bethea were unwilling to vote to raise taxes.
A tough decision, indeed. But one that was, for this Council at least, unusually decisive.
At the same meeting, Council continued to move along with consideration of the proposal on the table to fund the Lafayette Yard Community Development Corporation (LYCDC) with at least $3 Million Dollars to renovate and upgrade the current Marriott Hotel owned by the City as it transitions away from that brand to face an uncertain future, perhaps as a Wyndham Hotel. Further discussion and consideration of that proposal will take place tomorrow.
So, to review, last night City Council said it could not find $2.27 Million in order to hire police officers, but it is still considering coming up with a minimum of $3 Million for a Hotel.
Does this strike you as somewhat off? Are the priorities of Council somewhat skewed?
Don’t get me wrong. The vote on the COPS grant, while a difficult one to take, can be justified. In the absence of any plans by the Administration to improve revenues – income from items such as parking meters and the municipal court are waaaay down over the last three years, but that’s another topic – the City just cannot afford to improve public safety with its own resources right now. I won’t fault Council’s decision to decline to apply for COPS. It was tough to do so, but we are broke.
Going on to the next topic, though, there is No Way In Hell that Council should still be thinking that we can give another $3 Million to the LYCDC. Perhaps some members may think that if we finance that $3 Million with bonds, it will be less of an annual burden on taxpayers than an immediate hit on property taxes.
But that’s crazy. Bonds still have to be paid off in annual installments, and those payments would have to come from the City’s general revenues, which will probably require city property taxes to be hiked.
And, thanks to something called Interest, $3 Million now would mean paying out a lot over time. I don’t know what the actual terms of a bond deal would be, but a hypothetical $3 Million financed over 15 years paying 5% interest would cost a total $4.270 Million. Don’t believe me? Try it yourself.
The path to funding the hotel just got a lot harder last night. The Board of the LYCDC was looking to get commitment for the $3 Million in time for the June 14 expiration of the Marriott license agreement. Even if Council were to approve that request, it is too late for the State to agree by then. Any municipal request to float a bond issue requires approval by the Local Finance Board of the state’s Department of Community Affairs. It’s too late for that Board’s June meeting. The earliest that can now happen is July 10. Too late for there not to be some interruption with hotel operations.
But that step in the process, although critically important, looks far less crucial this morning.
What seems to be most relevant today to me is that last night, with only one opposing vote, Trenton’s City Council said we cannot afford more police officers if we have to use Trenton public dollars to pay for them.
How in the world will these same members be able to say that we CAN find even more Trenton public dollars for the boondoggle hotel? How will they ever be able to justify a vote to do so?
Ethically, morally, politically, any other “-ally” you care to mention: by voting down police, Trenton’s Council simply cannot now vote up the hotel.
The MIDJersey (as they style themselves) Chamber of Commerce held a meeting yesterday at Waterfront Park in Trenton to, in the words of Bridget Clerkin of the Trenton Times this morning, “show their support for keeping the [Lafayette Yard] hotel open, calling the city-owned facility essential for revitalizing the area.”
This cheerleading meeting – not even held at the Hotel the Chamber was looking to support – was filled with the usual claims for the hotel that we’ve heard for the dozen years the hotel has been in operation. “‘Everyone knows there are some major concerns with the city, but having a hotel is like filling a pothole,’ said Phil Kirschner, president of the New Jersey Business & Industry Association. ‘It provides a foundation to build other things on here. Without a hotel, it would be very difficult to jump-start the economy.’”
This is, of course, the usual claim for the hotel: that it will be the catalyst to boost revitalization in Trenton’s downtown, a claim that has been definitively denied by the operators of the hotel itself. I will draw your attention, once again, to the February 2013 Historical Financial Review prepared by the Lafayette Yard Community Development Corporation (LYCDC), in which the failure of the hotel is attributed to the lack of development and revitalization in Trenton’s downtown. Despite Mr. Kirschner’s statement, the Hotel has admitted that it is Downtown that can help the hotel, not the other way around!
Every time that someone promises that it will be the Hotel; or the Ballpark; or the Arena; or Thomas Edison State College’s new building that will be the catalyst for private redevelopment, I will point to this same LYCDC report – again and again - as admission that none of these things, whatever value they may have in themselves, will kick-start redevelopment or revitalization. To claim otherwise is a lie.
Chamber President and former Mercer County Executive Robert Prunetti, who was crucially involved in the development and construction of Waterfront Park and the Sun Bank Arena, wanted to let the public know that he was on the case in trying to salvage the hotel. His main effort so far appears to be putting our money where his mouth is. Wearing another of his hats as a member of the Capital City Redevelopment Corporation, he has met several times with staffers in Governor Christie’s office, where “Prunetti brought up the idea of sharing the financial burden of the hotel with the county and the state.” That kind of “financial burden-sharing, of course, usually means taxpayer money.
“‘We think that ultimately, the hotel should be a private endeavor, but that can’t happen overnight,’ Prunetti said. ‘It will have to transition to being privately owned in some form.’”
Hey, never mind that it’s been over a dozen years that this hotel has been a money pit for the citizens of Trenton. Now is the time to start a transition, to “some form” of private ownership. Eventually.
Trenton City Council member Phyllis Holly-Ward had some choice and frank words for the assembled Chamber members. “Where have you been? Where were you at? Did the idea of closing the hotel scare you enough to do something now?”
Well, Councilwoman, I can tell you where the Chamber has been, or rather hasn’t been, at least in 2013. With very, very rare exceptions, it hasn’t been in Trenton. Below is a list from the Chamber’s Calendar of Events for 2013, as listed in their own monthly publication
January 8 Evening Networking HOB Tavern, Bordentown
January 9 Chapter Breakfast Osteria Proccacini, Pennington
January 17 State of Mercer County Stone Terrace, Hamilton
January 23 Workshop Holiday Inn, East Windsor
January 29 Evening Networking Cranbury Golf Club
January 31 “Walk to Washington” Washington, DC
February 5 Chapter Luncheon Nottingham Ballroom, Hamilton
February 6 Chapter Breakfast Rider University, Lawrenceville
February 6 Young Professionals Connective Sun Bank Arena, Trenton
February 12 Chapter Breakfast NJ Manufacturers, Ewing
February 21 Power Luncheon Hyatt Regency Princeton, West Windsor
March 6 Breakfast Workshop Ventura Wealth Management, Ewing
March 7 Chapter Workshop Grainger, Robbinsville
March 14 Power Luncheon Westin Princeton, West Windsor
March 21 MIDJersey C of C Discovers Cuba! Villa Romanza, Yardville
April 4 Chapter Breakfast Roma Bank, Robbinsville
April 9 Chapter Luncheon Mountain View Country Club, Ewing
April 11 Cross-County Economic Symposium Hyatt Regency Princeton
April 23 Chapter Luncheon Hopewell Valley Vineyards, Hopewell
April 24 Chapter Luncheon Jester’s Café, Bordentown
April 26 “Stand Against Racism” MID-Jersey Chamber, Hamilton
May 1 Evening Networking Bucks County Playhouse, New Hope
May 7 “Planning for the Next Superstorm” Hamilton YMCA
May 8 Chapter Luncheon Holiday Inn, East Windsor
May 9 “Uncover Your Element” Stone Terrace, Hamilton
May 10 Excel Workshop MIDJersey Chamber, Hamilton
May 14 Chapter Breakfast Holiday Inn, Princeton
May 15 Chapter Luncheon The Lawrenceville School, Lawrenceville
May 22 Discover Cuba Informational Session MIDJersey Chamber, Hamilton
May 23 Power Luncheon Trenton Country Club, Ewing
May 29 Chapter Evening Networking Hopewell Valley Golf Club, Hopewell
May 31 PowerPoint Workshop MIDJersey Chamber, Hamilton
June 5 2013 Expo Grounds for Sculpture, Hamilton
July 8 2013 Golf and Tennis Classic Trenton Country Club, Ewing
So, I ask you, how seriously should we take the MIDJersey Chamber of Commerce’s expression of support for the Lafayette Yard Hotel, when out of 34 events in their 2013 calendar – not counting yesterday’s event – NOT ONE event has been held at the Hotel, and ONLY ONE in the City of Trenton?
How seriously can we take the Chamber’s support for Trenton? Not at all.
Mr. Prunetti said yesterday, “I can assure you, we’re behind the effort to save the hotel. We don’t know what the solution is, but we’re behind your effort.”
I don’t know what the solution is, either. At this point, I don’t know if the hotel has any other solution other than a swift sale process to private ownership.
But I know what the solution is NOT. It is NOT a Chamber of Commerce that is “behind” the City’s effort. It has to include a Chamber that is IN FRONT of this issue, and IN FRONT of efforts to invest in and revitalize this City.
With the Chamber’s member companies’ OWN money, and the money of other private investors, and not just the money of City and State taxpayers. It can be the role of the City, and the County, and the State to work to help create an environment conducive to investment and welcoming to existing and new business. But we have vividly seen the limited and mixed results that direct public investment in projects like the Hotel, and the Ballpark, and the Arena can generate on their own.
As long as the efforts of the Chamber consist primarily of one-off publicity stunts like yesterday’s meeting; as long as the conversations of people like Mr. Prunetti talk only about “sharing the financial burden of the hotel with the county and the state;” as long as organizations like the Chamber and its members can’t even see fit to produce some of their events in Trenton; then all this talk such as we heard yesterday isn’t worth one damned dime to this City.
“If we assembled a little too late, we’re here now,” Prunetti said yesterday.
“A little too late.” No shit!
Thanks for Nothing.
We are hearing more today about the position being taken by the NJ Department of Community Affairs (DCA) regarding the future of Trenton’s municipally-owned Lafayette Yard Hotel. Yesterday’s news reports of meetings and discussions between the Administration and DCA, relying principally on accounts provided by the Indicted Occupant of Trenton’s Mayor’s Office and his Fuckup Without Portfolio Anthony Roberts – hardly objective and uncritical reporters – indicated that the DCA’s stance on further funding for the Hotel as somewhat contradictory. As of today, the State’s position is a little clearer, in that it resolves some questions from yesterday. But I have some new ones in their place.
In yesterday’s reports, we heard that the State was “abundantly clear” that it did not want to see the hotel close. On the other hand, DCA expressed a clear preference to the IO and the FWP that the City was to fund the transition costs for the City-owned hotel itself, without any assistance from the State’s taxpayers after they’d already sunk more than $30 Million into the joint over the last dozen or so years.
Wanting to keep the place open while not supporting that effort financially frankly struck me as passing the buck. Today we can see (courtesy of Dan Dodson and Jim Carlucci) a letter written this past Tuesday by the DCA’s Director of Local Government Services Thomas Neff to the IO and City Council, clarifying this seeming contradiction.
The letter (and its attachment; more on that below) is illuminating on a number of levels, but I still see some contradictions in the State’s position.
First, regarding the State’s statement that the City should fund transition costs. Mr. Neff writes that the City does not need state approval for the sum of $200,000 that has been requested by the Administration and the Hotel’s Board to fund some immediate costs to transition the hotel from the Marriott Brand to the Wyndham brand.
But, the state does draw a bright red line around any consideration to fund the approximate $2.6 Million additional Dollars being discussed to renovate the hotel as Wyndham and the new management company Marshall Resorts state is required for the property. “[A]ny longer term restructuring of the hotel debt or issuance of new debt designed to make it more profitable or to facilitate its sale will ultimately require the approval of the [State] Local Finance Board pursuant to statutory law. [Emphasis mine - KM]
I emphasize the language about a sale of the property because DCA is convinced that has to be the main objective going forward for Lafayette Yard. Talking of the meeting between DCA and the City, Neff writes, “There was a consensus among all participants that steps need to be taken to make the hotel less of a burden on taxpayers, which would ideally include a sale of the hotel.”
So far, so good. It is a step forward that there is a “consensus” between the state and the city that Trenton’s goal is to get out of the inn-keeping trade, and to sell the damned place. It’s how we all get there that’s at issue.
Right after Neff says the ideal plan is to sell the hotel, he writes “There was also a consensus that simply allowing the hotel to shut down would make it less likely, not more likely, for the hotel to be sold in the marketplace.”
OK, full stop. Put the brakes on, and let’s stop this bus for a moment. Because this second “consensus” may wind up costing us another $3 Million Dollars. This “consensus” may have been arrived at by DCA and the Administration, but it most definitely does not include the City’s poor taxpayers.
In the same paragraph that Neff talks about keeping the hotel open in order to sell it, he writes of a sale as part of “a broader strategy of better positioning the hotel so that it will ultimately pose less of a burden, if any, on taxpayers.”
Hmm. So, how does the prospect of adding another $3 Million Dollars in debt to renovate the hotel, constitute posing less of a burden on taxpayers? Because it does the exact opposite.
I challenge the “consensus” that it is essential to keep the hotel open in order to make the place marketable. I challenge the City, the hotel board, and DCA since they are part of the consensus, to make the arguments – and show us the numbers! – that we must keep the hotel open while selling it. AND that an eventual sale price will be $3 Million or more higher than it would have been without upgrading it.
I don’t know that the particular upgrades that are being discussed will end up making the place more or less attractive to a potential buyer. Who, after all, may have a whole bunch of other priorities for sprucing up the joint that may reflect an entirely different plan for the hotel than that envisioned by Marshall and Wyndham.
For instance, we know that the current plan envisions much of the emphasis to be placed on the hotel’s bar, with limited cosmetic work projected for guest rooms. But if a prospective buyer wants to put their focus on the hotel’s guest rooms and not the bar, they may not pay a higher price tag including renovations they didn’t want, and which may not be worth $3 Million to them .
I would be very skeptical of any plan that calls for keeping the hotel open – by spending millions of dollars on renovations of uncertain value to a new owner – while marketing the place. So that “consensus” needs to be seriously challenged.
Going forward, although the State seems to be giving Trenton a green light to start the transition process – if the City wants to spend $200,000 of its own money, that is – it is also embracing the City in a bear hug that brings the State much closer to the table as a full partner in the future planning of the hotel. Mr. Neff concludes his letter by saying “that action (including a potential sale of the asset) should be taken to facilitate a lessening or elimination of taxpayer liabilities, makes it incumbent on all of us to work together more closely in the future. To that end, the City Administration and Division of Local Government Services will be sharing information and meeting more regularly. [Emphasis mine – KM”
Oh, good! Surely this is just what the IO and FWP are looking forward to! More regular meetings and information sharing with DCA!!
In its deliberations coming over the next few weeks, since it looks like the ball is back in their court, City Council should look very critically at the issues on the table, and ask the right questions. Should they approve the $200,000 request for transition costs? It seems to be in the budget, according to part of the attachment sent by the Administration to DCA, but should we spend it? Is keeping the hotel open important to attracting a buyer? Are the $3 Million in proposed renovations the right ones, needed right now, to attract such a buyer? What is a realistic price for which we can unload the place, with and without the renovations? Who will pay for these planned renovations? How?
I hope to hear these questions raised, and even more, answered fully and frankly.
On top of that, I have a few more questions that I hope Council will ask, about how the Administration is conducting its business. Namely concerning the IO.
Take a look at this document, sent to DCA as the only item in support of its request to get DCA’s approval (not needed, as it turned out) to spend the $200 Grand.
This attachment contains one important form, a Contract Request Form for the State, and a draft Resolution for Council’s consideration. Both are signed by the IO as well as other city officials. It was the very thin, embarrassingly so, presentation of this document that led DCA to make its announcement that the State would not allow any further movement on the hotel until it received a more comprehensive plan.
To me, it kind of looks like the signature of the IO comes from a stamp. Is it routine that the IO signs important documents such as these with a stamp facsimile of his signature? And, given that he is known for not spending much time at City Hall lately, does he even see these documents before they are stamped with his signature? Who is the keeper of the stamp who “signs” for him? Is truly that person and not the IO himself, or Tom Neff as Kathy McBride suggested, the real Mayor of Trenton?
“[Director of the office of Local Government Services of the NJ State Department of Community Affairs (DCA)] Tom Neff made it abundantly clear that the DCA is not interested in seeing the hotel close.”
And yet, at the same time:
“[I]t is up to the city to fund transition costs for the city-owned hotel.”
Do you sense a certain… contradiction between those two statements? That, dear reader, is the sound of The State of New Jersey, passing the buck.
From today’s story, linked above, by Jenna Pizzi in the Trenton Times, or the David Foster piece in the Trentonian, it is possible to discern a 180-degree turn from the State regarding its position on the decision facing the City of Trenton to continue its operation of the taxpayer-owned Lafayette Yard Hotel.
Last week, in a dramatic announcement made by the City’s Business Administrator Sam Hutchinson, the State unexpectedly intervened in City Council’s deliberation on whether to approve the next installment, $200,000, of a projected minimum $3 Million of costs to both renovate the Hotel and transition to a new brand and new management.
The public statements of four Council members before last Thursday’s meeting suggested that a majority would likely vote against the additional subsidy of the struggling hotel. But Mr. Hutchinson’s deus ex machina revelation that New Jersey “will not sign off on any more cash infusions for the West Lafayette Street Marriott hotel until the state sees a concrete plan to fund an estimated $3 million transition to new management and renovation and real evidence that the hotel’s flagging fortunes can be turned around” stopped that discussion cold. The resolution to appropriate $200,000 was pulled from Council’s docket until the City could meet with DCA to get further information on the State’s position. That meeting was yesterday. According to accounts of the session discussed in the newspapers this morning, the State walked back its resistance to any further immediate City action to fund the hotel, and walked it waaaay back.
Last week, the State’s announcement was so forceful that Councilwoman Kathy McBride considered it no less than a takeover of the City by the State: “Tom Neff is the mayor of the city of Trenton and that is the bottom line,” McBride said. Yesterday, the message was very different. According to mayoral aide and Fuckup Without Portfolio Anthony Roberts, the decision to fund at least this next $200,000 is of course “within the purview of the city to fund.”
Which puts the responsibility of funding this next installment squarely on the City and its poor taxpayers. Again.
What accounts for the State’s abrupt U-turn? It’s an election year, is my explanation.
I think someone in the State House higher in the pecking order than Tom Neff saw last week’s headlines about the State’s intervention, and decided that would open the State to too much exposure (or “blame” if you’d prefer to avoid beating around the bush) to the responsibility for what was shaping up to be a probable decision to close the hotel.
As Roberts quoted Tom Neff at the beginning of this article, the state made it “abundantly clear” it would like the hotel to remain open. God forbid that the State’s fingerprints be found on any decision to close the place! Not during an election, and not so soon after the State rolled snake-eyes on its quarter-billion dollar bet on the Revel casino resort in Atlantic City. Not when the State’s investment in the troubled Xanadu complex looks shaky.
Sure, New Jersey’s stake of nearly $30 Million in Lafayette Yard is a lot smaller than Revel and Xanadu, but our hotel is a lot, lot closer to the State House! It would be extremely easy for news cameras to pan from “Closed” or “For Sale” signs on the hotel right over to the Capitol. Bad optics, as they say in the business. It would not be good for Governor Christie’s reputation as a serious, no-nonsense manager to be too closely associated with another real estate deal gone bad.
Also, I’m sure it occurred to someone on West State Street that certain members of Trenton’s Council would have been more than happy to deflect the blame for their vote to close the hotel on to the State. After all, they’ve done it before.
Remember back in 2011, during the controversy about the City’s efforts to sign a contract to Lynx Technology, in a dicey and ultimately unsuccessful effort to move all of the city’s IT services to a company apparently unprepared to handle them, West Ward member Zachary Chester publicly based his initial vote to approve the deal based on the facts that Lynx was “the lowest bidder, gave a presentation that showed they are capable of doing the required work, and was found acceptable for consideration by the (state) Department of Community Affairs. No other factors influenced my decision. [Emphasis mine - KM]”
Councilwoman Phyllis Holly-Ward was more succinct in her reasoning. Speaking about the same decision to vote for the Lynx deal in 2011, said simply, “I will also let the State make my decision.”
Given all of this, It seems very possible to me that someone in the State House much more politically attuned to things than a professional career bureaucrat like Tom Neff, said something like, “Neff, we can’t be too closely connected with any decision to close Lafayette Yard. For Pete’s sake, don’t block Trenton from making any decisi0n on its own. Don’t put up another dime of state funds, whatever you do! Sound encouraging. Say we want to see the hotel remain open. Let that idiot mayor and his people know we won’t stand in their way. Tell them, ‘it’s within the purview of the city to fund’ the damned place. Yeah, that’ll work! At least it will push off the problem until after the election. If we’re lucky, it’ll keep the hotel open until after 2016. Then it’ll be someone else’s problem. Good man, Neff. Keep the lid on the whole thing.”
Yeah, that is all to credible a scenario to me. The thing is, had Mr. Neff and DCA not done a thing last week to intervene, I think Council would have voted against the money. There would have been no State involvement in that decision. Sure the State would have been part of the aftermath of any decision to close the hotel. There are still an awful lot of bills to pay, and at least $9 Million in state loans unsecured by any collateral but the hotel itself, worth only a fraction of the outstanding debt on the place. But that kind of situation would have been easier for the State to deal with, cleaning up after the Trenton Council’s own decision.
Now, it’s a lot more complicated for the State. DCA stepped right into the middle of the mess last week. The State now owns its share of any and all further actions to either close the hotel, or keep it open. DCA will have to make sure that, should the hotel remain open, the hotel’s Board will have to be more carefully appointed and trained for its duties. The State may have to place one or two of its own people as members of the Board to make sure its interests are represented. And, despite its reluctance, state taxpayers may end up pouring even more money into the place.
I still think that a majority of Council members may vote against any more City money for Lafayette Yard. But a vote to do so is now much more difficult for each member, now that the State has weighed in by making it “abundantly clear that the DCA is not interested in seeing the hotel close.”
It would have been much, much easier for those Council members to vote as they had publicly said they would vote, before DCA opened its mouth. The State’s announcement last week, and its reversal this week, make it a lot harder for Council. This morning’s news reveals a clumsy attempt of New Jersey to pass the buck back to the City of Trenton, after it overplayed its hand.
From now until next January, auditions are open for candidates to be Trenton’s next mayor. January 2014 is, of course, the earliest that candidates can actually start to circulate nominating petitions and collect enough signatures for the May 6 election.
We already have a number of announced candidates for mayor, however. So far, four individuals – James Golden, Patrick Hall, Eric Jackson, and Walker Worthy – have all made formal announcements of their candidacy, and have formalized their intentions by filing at least some of the required forms and reports with the NJ Election Law Enforcement Commission (ELEC). A fifth, Paul Perez-Barroso, has announced his candidacy, but has neglected to file any ELEC paperwork. There are others who are rumored to be considering their candidacies, but no others have announced and/or filed. The Current Occupant of Trenton’s Mayor’s Office continues to be coy about his intentions to stand for re-election. But I for one consider him to be irrelevant as a serious candidate for 2014.
These five people have all announced in typical fashion – the usual press conference attended by family and supporters, featuring the routine prepared statement featuring personal biography and professional career details, and the required vague recitation of promises and goals for their candidacies and future terms of office. Afterwards, they may have set up web pages and/or Facebook pages, Twitter feeds; and begun to write Op-ed pieces or Letters to the Editors of the local papers.
As of May 10, 2013, that is as far as these candidates have gone. After their initial announcements, we’ve heard almost nothing of substance about any municipal issue of importance from any of the formal announced candidates. It’s not as if there’s nothing going on in Trenton.
Even though the election is a year away and formal campaigns not yet swinging into gear, I wonder why I am not hearing more, and in more detail, from the five announced candidates. It’s easier than ever to get one’s thoughts and opinions out into the ether: Facebook; blogs (ahem!); Twitter; even Comments to the online publication of newspaper stories; all are almost instantaneous, and possibly even better for candidates, free, vehicles for moving one’s opinions and positions into the public conversation. What I have noticed up until now is that none of the candidates are using any of these or similar to participate much in discussions of the issues they will face should they be elected.
Let’s start with Patrick Hall. He was the first person to enter the race. He announced his candidacy about 10 months ago, and set up a website at the same time. But since then, he’s been invisible. His website has seemingly been untouched since last July. He’s issued no press releases, his Facebook page features his campaign logo and lots of pictures, but no position statements. A Google search of “Patrick Hall Trenton” brings up references to his original announcement, his website, and an occasional note of a public appearance. But I can find nothing where he comments on news items or makes statements on policies he would support or oppose as mayor. Nearly a year into his candidacy, he is still a cipher, and has squandered the time he enjoyed as the only formal candidate by doing nothing with it.
Walker Worthy, the Deputy Mercer County Clerk announced his candidacy last month, and held a press conference/supporters’ rally at the Trenton Marriott. So far, his candidacy seems to be focusing on rallying supporters within the county’s and city’s politically active Democrats. He as of yet has no website, and his Facebook page features his picture and campaign slogan: “Worthy to Serve, Prepared to Lead.”
What he is apparently not yet prepared to do is tell voters what he thinks about the issues.
Former Trenton Police Director James Golden also announced his campaign last month at the Marriott, with prepared remarks that are posted on his Facebook page. In part it states, “[M]my campaign is going to be all about direction. It’s going to be: Trenton Forward! Trenton Forward! is not a sound bite – it’s a mindset, a way of doing things, and our anthem to move this city in a grossly different direction…I’m running for mayor of Trenton because I care too much about this city to see it go backwards…I’m running for mayor because it’s time we’ve tackled crime with a real plan and not pixie dust…I’m running for mayor because it’s time we start creating jobs, and not case files for the US Attorney’s Office..And I’m running for mayor because it’s time we restore integrity, public trust and ethics to city government.“
Occasionally we have heard Mr. Golden at City Council sessions making statements on specific issues, and he has also on occasion contributed some thoughts in Facebook discussions. He has started to circulate some position papers on some issues, however those are not yet widely or openly discussed or expanded upon. So far we have not publicly heard any sustained or comprehensive ideas or proposals that he believes will take “Trenton Forward.”
Paul Perez-Barroso made a big splash last month with his campaign promise, “Make me the mayor today, and tomorrow you will have 105 police officers back on duty.” He took some grief for that promise among one group of Facebookers, attempted to engage his critics and respond, also on Facebook. When faced with more questions and comments, he retreated and cut off further comment. Since early April, he has had no presence online or in the news. His campaign kick-off event was first announced to be held at City Hall, but was moved to a private Mill Hill residence at the last moment.
Alone among the other declared candidates, Mr. Perez-Barroso has so far failed to file the required documents with ELEC. For someone whose primary self-presented credentials are those of a savvy businessman and executive, this is a telling omission. It’s a mixed message to the public when a candidate plays up his work with the US Export-Import Bank and the National Science Foundation, then neglects the New Jersey Election Law Enforcement Commission.
Former Trenton Director of Public Works Eric Jackson only formally announced his candidacy this week, although he has been frequently mentioned in the press for months as a likely candidate. He filed his candidacy with ELEC last month, but as of today has filed none of the required quarterly financial reports for his campaign that has been informally running since last fall at least.
Mr. Jackson is the sole candidate to have published a public article staking out a specific position on a current issue. In January of this year, he submitted a brief op-ed piece to The Times supporting the Thomas Edison State College proposal to re-develop the Glen Cairn Arms site. I disagreed with his position, but was appreciative that he took the time and made the effort to engage on a specific important public issue of the sort he’d face as Mayor. I hoped to see more of this, not only from him but from all the others.
Which is why his Letter to the Editor in yesterday’s Times was so disappointing. Meant to accompany his formal campaign announcement, it reads as so bland and generic to have been cribbed from a standard manual, like “Campaigning for Dummies.” There is nothing in his letter that could not have been written for any other community in this nation. For example, a slightly edited excerpt:
“It is out of this belief and love for the city of [INSERT NAME HERE] that I announce my candidacy for the office of mayor. This will be a campaign that will invite everyone who is interested in making the city of [INSERT NAME HERE] great once again. Over the course of the campaign, you will hear about my plans for the future for this great city. More important, I want to hear from you, the public, about what you want the future of [INSERT NAME HERE] to be.”
Can the bar possibly be set any lower?
All of these guys have announced their candidacies real early. We have a year before the next regularly-scheduled elections. Part of the reason they’ve announced so soon is to be ready should there be a special election this year occasioned by an involuntary vacancy in the office.
The window for that happening in 2013 is fast closing, and in my opinion is not happening. But if there is a remote possibility of it occurring, I think that would give these candidates more reason, not less, to make their campaigns specific, detailed and comprehensive. So far, to a one, that is not happening.
In open auditions, a candidate doesn’t have much opportunity to make an impression. You have to start strong with your best material and your best presentation from the first second.
If you don’t, before you know it, you hear, “Thank you. Next!”
The clock is ticking, guys. Who’s up for it?
The author, teacher and management guru Peter Drucker once defined the difference between Management and Leadership. He said,
“Management is doing things right; leadership is doing the right things.”
It’s too bad we seem to have neither within the Administration of the City of Trenton. Leadership is WAAAAYYY too much to ask for, I know. I’d settle for some good, basic, competent management, but even that seems in scant supply these days. The Administration just does not have the knack of doing things right.
Case in point: this article in today’s Trenton Times by Erin Duffy, reporting that the Administration and the Indicted Occupant of Trenton’s Mayor’s Office “are fighting to overturn a state Civil Service Commission ruling that ordered a Mack confidante be laid off and replaced by a former security guard who lost his job two years ago.” The case in question is that of laid-off City Park Ranger Michael Morris. Last month the NJ Civil Service Commission agreed with Mr. Morris that he was laid off to make room for a loyal supporter of the IO (and there aren’t too many of those left around!), Robert “Chico” Mendez. The Commission ordered that Morris be reinstated and Mendez let go.
Of course, the Administration ignored the ruling. Mr. Mendez is still on the city payroll. Mr. Morris should also be back on the payroll, per the Commission’s order, but that hasn’t happened. Today we read in Ms. Duffy’s article that the City will file an appeal to the April Civil Service ruling.
Here’s the part about not even being able to do things right. The City intends to appeal the Civil Service Commission’s ruling even though the City failed to make a case in the original hearing! In the Times article by Alex Zdan last month announcing the ruling, we read “The Civil Service decision shows the city did not respond to ‘numerous opportunities and requests’ to submit any response to fight the case.” [Emphasis mine - KM]
When given multiple opportunities to do so during the original case before the Commission, the City did not take any action, produced not one document to support its position, and apparently offered not one argument why Mr. Morris should not have gotten his job back.
Now, since the City doesn’t like the result, it will appeal. On what basis? I don’t know.
I am not familiar with the mechanisms the Civil Service Commission engages to hear these matters, so I found this Q&A page on the Civil Service Commission’s home on the State’s website, which discusses the appeals process. One section reads,
In General: What if I Disagree with the Civil Service Commission Decision on My Appeal (Any Appeal)?
You may file a request with the Civil Service Commission for reconsideration of its decision [N.J.A.C. 4A:2-1.6] within 45 days of receiving it. You must show one of two things: new evidence or additional information not previously presented to the Civil Service Commission which would change the result of the appeal, plus the reason that this evidence was not presented earlier; or that the Civil Service Commission decision was a clear, material error. All copies of correspondence and other documents that you provide to the Civil Service Commission must also be provided to all other parties in the appeal.
Instead of a request for reconsideration, or following receipt of a Commission decision in a request for reconsideration, you may file a Notice of Appeal with the Superior Court, Appellate Division, within 45 days. [Emphasis mine. - KM]
The Times article this morning is unclear (probably because the Administration is itself confused about it) whether the City will appeal back to the Commission, or whether it will take the case right to Superior Court.
But I would imagine that in either venue the City will have a hard time if it tries to introduce new material or make any new arguments. I can just hear a Commissioner, or a Judge, asking, “So, why exactly did the City fail to introduce this evidence earlier? Why did the City fail to make any argument in the first hearing? Hmmmmm????”
I can hear those question in my mind, but for the life of me I cannot conceive of how the City will reply!
The City has totally fucked up the Michael Morris situation. He should never have been laid off. Mr. Mendez should never have been hired in his place. Morris should be reinstated. Mendez should be let go. The City didn’t even try to make any argument before the Civil Service Commission. That failure, plus the strength of Morris’ case, meant the City lost.
Now the City will spend even more time, and spend even more money, in pursuit of a ruling it will never get. The Commission knows it. The media know it. Mr. Morris and his lawyers know it. The City’s own outside lawyers probably know it. You know it. But the Administration refuses to acknowledge it. And so this farce will continue for at least several weeks or months more, toward a conclusion that really is in no doubt.
In the grand scheme of things in this City, this is one small matter. But the fact that the Administration cannot even get this small matter right is typical of the utter non-existence of any semblance of sound management in City Hall.
They just can’t do things right.
With this inability, it is too much to ask that anything akin to Leadership for this town be exhibited by the Administration. Sure enough, we will not read about that in another Times piece this morning. This article, also by Ms. Duffy, narrates how in the aftermath of City Council’s meeting Tuesday in which Council failed to approve the latest funding request from the managing board of the Lafayette Yard Hotel, the City is now looking to meet with the State’s Department of Community Affairs (DCA) to discuss the future of the hotel.
What the article describes to me is an administration in panic mode about the hotel. Council, or at least a 4-person majority, seems to be dead set against approving any more city funding for the loss-making property. DCA announced on Tuesday that it opposes any more funding until they see “a clear, concrete, written plan spelling out how the hotel will become profitable and find the estimated $3 million needed for a renovation.” Such plan being nowhere in sight.
The City’s Business Administrator Sam Hutchinson is quoted today as saying the City has no ability to come up with the needed $3 Million to renovate and upgrade the hotel. And the State, as discussed in this space over the last few days, is already paying off $18 Million in Bonds it issued for the hotel, as well as holding another $9 Million in loans directly to the hotel. I don’t think the State will be a likely source for any additional financing, either, after dumping $27 Million and counting into the place.
About the only likely role I see for the State is with assisting in closing the hotel, preparing the property for sale to a commercial party, and assisting in helping the City to deal with the financial fallout of paying off the remaining bills and long-term debt.
Although the State probably doesn’t prefer to see the hotel close for even a little while, memories of the Quarter-Billion dollar investment it made with the failed Revel casino and the ongoing problems with the Xanadu project are still fresh in the public mind, and will likely make the State of New Jersey a little leery of getting involved with another hotel project.
A display of Leadership at this moment, on this issue, would mean the IO standing up and saying, “The City tried to make the hotel work. But after a dozen years and more, in a good economy and bad, it is just not working. It would be irresponsible for this Administration and this City to add to an already intolerable burden of debt and put one more dollar into a municipally-owned hotel. Therefore, I am asking City Council to withhold any further appropriations to the hotel, and I also request the Lafayette Yard Hotel Board to cease operations as soon as practical, wind up remaining obligations, and seek the best possible terms for a sale. I will ask the State to assist us in this process.”
Of course, we will never hear that from the Indicted Occupant. He doesn’t have it in him. The other night, when Councilwoman Kathy McBride called him “a figurehead,” she unwittingly hit the nail right on the head. Since the day he took office, and certainly well before he was indicted on federal criminal charges, he has been somewhat more than a figurehead: he has indeed personally taken actions and made policies, but those have almost all been foolish, malicious, wasteful, or all three. Some may have been criminal, as we may find out later this summer.
But overall, the man has presided over three years of drift, decline and decay. He has been a figurehead, content to smile and wave at numerous ribbon-cuttings, dedications, and photo opportunities, while the city around him spirals further downwards.
I can’t wait for him to be gone. But, in the midst of all these problems, those who would replace him, and who have openly declared their candidacies for next year’s elections, are mostly all silent themselves on these matters. More on that in the next post.
Just when it appeared that a majority of Trenton’s City Council was finally prepared to put the brakes on the renovation and transition plans for the City-owned Lafayette Yard Hotel on their own, the State of New Jersey swooped in last night, announced its opposition to any more taxpayer funding “until they receive a copy of a plan from the city with respect to available options for funding and profits — a more comprehensive plan,” and took all the attention. Funny how that works.
During the day yesterday, a printed press report discussed how the public declaration of North Ward Councilwoman Marge Caldwell-Wilson that she would oppose any further City taxpayer financing pretty much meant that this week’s request for $200,000 in transition funds was dead on arrival. Ditto the $3 Million Dollars, minimum, that would be required for the hotel to renovate and upgrade as it converted to a Wyndham Hotels-flagged property.
During a presentation by the Lafayette Yard Community Development Corporation’s (LYCDC) Board Chair, the board’s attorney and other parties associated with the proposal, the tone of the supplicants was, frankly, rather desperate. “Where we are today is an attempt at survival,” stated David Ong of Acquest Realty Advisors, the longtime asset manager for the hotel that, as far as is known, is expected to remain in place during any possible transition.
The trouble is, both City Council and the State of New Jersey, in the form of the Department of Community Affairs (DCA), seem to be unmoved by the characterization of “an attempt at survival” as serving as any kind of coherent and credible business plan for the future of the hotel. And that is just about where the LYCDC is right now. They have no credible plan to present, just the hope that a new management, and a new flag and set of logos, can turn around the hotel after a dozen years of failure.
DCA’s position was announced to Council last night by City Business Administrator Sam Hutchinson, who also cautioned councilmembers to look at the hotel’s plan most carefully. “Let us not be misled by what could be simply because we’re getting projections. We had projections 13 years ago. We have to be very, very careful with what we’re signing on to.”
Mr. Hutchinson’s words of caution are very relevant, and very timely for this discussion. Four years ago, after a long stretch of disappointing results for the hotel, LYCDC tried another management switch for which it had high, and as it turned out very unrealistic, hopes for what could be achieved with another Fresh Start.
Yesterday, I referred to a memo from April, 2009, written by Caren Franzini, then the Chief Executive Officer of the NJ Economic Development Authority (EDA), to the members of the Authority. Yesterday, I drew attention to the large financial stake the State had made in the long-term financing of the Lafayette Yard Hotel. Today, I will quote at some length another part of Ms. Franzini’s memo, discussing the then-new incoming management:
“In July 2008 LYCDC successfully terminated its operating agreement with Marriott Corporation and replaced the operating entity with the Waterford Group, an experienced management firm of 24 hotels in 8 states inclusive of 14 Marriott locations. Waterford’s success model is built around a regional team approach to managing its locations.
Shortly after signing with Waterford, LYCDC introduced Jeffrey Zieger to Waterford. Jeffrey Zieger, who is local to the area and has over 25 years of experience in the hospitality industry in New Jersey, was hired by Waterford in September.
Since joining Waterford, Zieger has made great strides in advancing the hotel’s operations. Zieger has instituted an aggressive local marketing campaign and has increased revenues steadily even in the weak economic climate.
While it is clear that the hotel’s operations are still challenged, for the first time since the hotel opened, operations are tracking in a positive direction. Jeff Zieger and Waterfront (sic) are committed to working not only with the City but also with State and local government entities to ensure timely reporting, diligent follow-up and candid conversations about the progress surrounding the hotel. [Emphasis mine - KM]
Didn’t quite turn out that way, did it?
Four years later, we are hearing the same kind of positive expectations for the new managers, Marshall Hotels, and for the hotel under a Wyndham flag. What does LYCDC and Marshall have to back up these expectations?
Almost all that Council, and DCA – who, under the terms of the current Memorandum of Understanding signed by the City has the right to approve or veto any real estate transactions made by the City, especially involving the hotel – have to work with to evaluate the proposal is a set of projections for the next five years made by the outgoing management company, and which have not been updated or replaced by any more recent projections by the new company. No proposal has been made by LYCDC’s team for how the $3 Million-plus Dollars will be financed.
It’s this vague specificity and failure to ask, let alone answer, several important questions about the future of the hotel, that has unsettled several members of Council, and finally moved DCA to intervene.
Frankly, I think DCA’s move is way overdue. The State has from the inception of this project been a major, mostly silent investor. The State financed $14 Million of the original construction cost, financed by long-term bonds that are being serviced by a dedicated Payment in Lieu of Taxes (PILOT) of nearly $2 Million annually that could have helped to support the City’s general budget. In addition, the State is currently on the hook for $9 Million in loans to LYCDC. For these reasons alone, the State should have demanded one or two seats on the Hotel Board; from the very beginning of the hotel, or at the very least in 2008 or 2009, with the change of management. The hotel was a very troubled operation from the beginning, and the State’s repeated failure to protect its investment by exercising a more active role in its management, instead deferring to two hapless City Administrations, is a big black eye for New Jersey.
That’s all past now, unfortunately. As of last night, the State has – finally – decided to intervene, for better or worse. The immediate result of last night’s DCA announcement, along with the direction a majority of Council appeared to be leaning, was to pull the resolution authorizing $200,000 in transition funds from tomorrow’s docket, while everyone considers their next steps.
I hope the next steps will include a decision to scuttle any plan to hire new management and affiliate with a new brand, as well as action to secure a honest and complete valuation of the property and its assets as preparation for a sale to a private owner. I fully expect that, after having finally decided to forcefully intervene in the matter, the State will be sitting at the table during these discussions as a more active and engaged partner.
It is time for the City of Trenton to get out of the hotel business.
Trenton’s City Council is set to meet this evening at 5:30. One of the items on this evening’s Agenda is Resolution #13-204, authorizing another cash transfusion to the struggling Lafayette Yard Hotel, now in its last five weeks as a Marriott-branded property. Tonight’s resolution is for an amount of $200,000, which will add to the $295,000 voted by Council in March to the hotel’s governing body, the Lafayette Yard Community Development Corporation (LYCDC), to provide cash flow to pay outstanding bills. These measures approved by Council this year are only prelude to additional sums likely to be at least $3 Million, the sum that has been estimated (as “a Lower-End number,” remember) would be required to renovate and upgrade the facility and cover transition costs to a new hotel brand, Wyndham Hotels, and a new management company.
The prospect that Council will approve this resolution looks a little more remote this morning. North Ward Councilwoman Marge Caldwell-Wilson, who voted for the $295,000 in March, is quoted in this morning’s Trentonian as saying she’s had enough, and would not vote tonight to approve the additional request of $200,000. “I’m not going to vote for any more money for the hotel unless they can start pursuing a buyer,” she said in the article written by David Foster. In addition, she has stated she would not vote to approve the $3 Million in renovation and transition funds. If she follows through with these intentions, and joins her three Council colleagues – current President Phyllis Holly-Ward, Zachary Chester and George Muschal – who voted against the Hotel in March, that majority of four would be enough to kill the transition plan. The Hotel would be forced to close, and the City would put the property for sale.
To me, this is good news. There is no sound business case to be made that this property will turn around under a Wyndham flag, when it has failed for over a dozen years under a Marriott flag. The taxpayers of this City and State have invested enough money it will never see again. We will continue to pay for many years to come until all its debts are paid, even if the hotel were to close its doors today. There is simply no reason to add to that debt by selling more long-term bonds, which is the only way $3 Million could be raised by the City. Ms. Caldwell-Wilson agrees with that. Also from this morning’s Trentonian: “I’m not even going to support bonding because that just increases our debt.”
That debt, as quoted in this morning’s Trentonian, in other recent press pieces on the matter including articles in this space, and in the LYCDC’s own Historical Financial Review written in February, is stated at being a little under $31 Million Dollars. And that is true, as far as being the debt that is the responsibility of the LYCDC, and therefore of the City of Trenton.
But there is another piece of long-term debt, being carried by the State of New Jersey and totaling $18,250,000 that has been missing from all current conversations about the future of the Lafayette Yard Hotel. To me, news of this additional amount only emphasizes to me what a boondoggle this has been for over a dozen years, and makes me adamant that this boondoggle simply has to stop.
A reader who has personal knowledge of the transactions involved years ago pointed out to me that the State participated in the long-term financing of this project, which cost $43.6 Million Dollars to construct. In addition to direct loans to LYCDC which are listed in the Historical Review at $4,162,158, the State issued about $14 Million in bonds to help pay for construction. Those bonds, like the $14,050,000 issued by the City, were intended to be paid back from profits earned by the Hotel.
Of course, that never happened. Instead, the City has been assuming payments on those bonds out of its own budget (almost $1.4 Million in Fiscal Year 2012, nearly $800,000 in FY 2013), and will continue to do so for several years to come.
The State, in 2008, acknowledging that the Hotel would default on its obligations to service the State bonds, refinanced its Lafayette Yard debt by a process called “defeasance,” in essence designating the proceeds of another property to pay the debts of the Hotel. That action is described in this April 14, 2009 memo by Caren Franzini, then the Chief Executive Officer of the NJ Economic Development Authority (EDA). The refinanced sum came to $18,250,000.
The State’s Hotel debt was defeased by designating a Payment in Lieu of Taxes (PILOT) for its property the Capitol Plaza building at Lafayette and Warren Streets, to pay the annual debt service. That means that a PILOT, of about $1.4 Million annually (my estimate, I wasn’t able to confirm that number) that normally would be paid to the City of Trenton by New Jersey to help pay for Trenton’s budget, instead goes to pay for the Hotel. [UPDATE: My reader tells me that the annual amount of the Capitol Plaza PILOT is about $1.9 Million in 2013, gradually rising to $2.7 Million in 2020, when the State bonds are paid off. ]
Let that sink in.
There’s about $1 Million per year that the City pays out of its own budget to pay off the debt of the hotel. And the State is paying well over $1 Million a year – money that could be coming to the City – to do the same thing.
The total amount of debt that the Hotel is responsible for, on the City’s books and the State’s, is not $31 Million, but closer to $50 Million.
The plan before City Council would add at least another $3 Million Dollars to that amount. And the prospects of paying any of that off through profits to be earned by the hotel do not look any better now than they have for the last dozen years.
With these additional considerations in mind, Ms. Caldwell-Wilson’s intention to oppose any further public funding of the hotel looks to be the only responsible position.
Mr. Foster’s Trentonian piece quotes a few of her colleagues as being in agreement. South Ward member George Muschal said, “[T]axpayers have had enough. I ain’t giving them nothing, absolutely nothing. It was zero when I first took office and it’ll be zero until I’m out of office.” He also favors selling the hotel, as does Ms. Holly Ward: “Everyone keeps saying they don’t want to sell the hotel for cheap. We’re going to have to.” Mr. Chester could not be reached by Mr. Foster for his article, but he is on record as opposing further aid to the hotel.
All this may mean that the City’s process of checking out of the innkeeper business and selling this white elephant begins tonight. I sure hope so.
“We don’t have any funds to do it,” Kersey said after the meeting of the annual request from the state. “So we will just notify them that we don’t.”
If Trenton’s City Council has any common-sense – Alright, you can laugh. Long and hard. Get it out of your system. Feel better! OK? Let’s proceed – and a sense of irony, they would quote Joyce Kersey’s words right back at her next week. Ms. Kersey is the current Chair of the Lafayette Yard Community Development Corporation (LYCDC), the Board empowered to manage the City-owned Hotel. Her quote is from an article in this morning’s Trentonian about last night’s meeting of the LYCDC, in which the Board voted 3-1 (Hiltonia’s Michael McGrath being the sole, wise opposing vote) to authorize Ms. Kersey to finalize two ongoing discussions and two contracts.
The first is with the Marshall Hotels & Resorts group, the company that may take over the management of the Lafayette Yard hotel from the current Waterford Group. The LYCDC only received a draft contract for review last Friday, but voted anyway to let Ms. Kersey finish the process as she feels fit without any further review from the full Board.
The second deal is with Wyndham Hotels, the brand that the hotel may affiliate with after Marriott leaves in June. LYCDC hasn’t even seen a draft contract with Wyndham, but voted to let Ms. Kersey work that deal without any review. The only member who was bothered with that was Mr. McGrath, who voted against. “I’m definitely not signing off on approving a contract that hasn’t been presented to me,” he said according to both the Trentonian and the Times account of the meeting. Wiser words have not been spoken by any public official in this town in a long, long time.
Anyway, back to Ms. Kersey’s words that opened this article. A part of the Trentonian article mentioned the existing, close to $31 Million of debt that the Hotel currently owes to various parties. Of that $31 Mill, about $9 Million is owed to the State of New Jersey, to various entities. Once a year, the State sends a letter to LYCDC, essentially asking, “About our loan to you. Do you perhaps have any intention of, you know, paying any of it it back?” And once a year, the LYCDC says, “Sorry, no. Not a dime.”
This time, at least as quoted in the Trentonian, Ms. Kersey’s response sounds awfully flippant. We are broke and don’t have the money to pay anything, she said, “So we will just notify them that we don’t.”
Just notify them that we don’t. Just, basically, stiff them again. “Them,” of course, being the taxpayers of the entire state. We don’t have it, so just let them know. Until next year, when we’ll say the same thing.
I agree that the hotel is in no financial shape to be able to pay off any of the $31 Million in existing debt the LYCDC owns. But it strikes me as very odd that Ms. Kersey would be so casually dismissive, so cavalier, about brushing off the hotel’s obligation to the State only one week before she and her board appear before City Council to ask for more money. LYCDC will make a presentation before City Council on Tuesday May 7 to officially ask Council for another $3 Million Dollars to prop up the failed property for yet one more attempt to make a go of the place.
And, should Council give her another $3 Million, which will either have to be funded by more debt or as appropriations to an already over-extended current operating budget, what happens in another couple of years when the City, or the State, or the holders of $14 Million in municipally-guaranteed bonds ask about getting their money paid? What will Ms. Kersey, or her successor, say then? “We don’t have any funds to do it. So we will just notify them that we don’t”?
One would think that Ms. Kersey – at least leading up to the Council meeting – would at least attempt to pretend as if the public’s stake of tens of Millions of Dollars in the hotel were important. But no, she’ll “just notify them” that they are out of luck, the LYCDC will be stiffing them, and us. Again.
Instead, next Tuesday night, after her presentation, City Council should respond to the plan by saying, “Sorry, We don’t have any funds to do it.”
$2.4 Million Dollars. It’s probably a lower-end number.
To renovate Trenton’s Lafayette Yard Hotel, if the City decides to sign on with Marshall Hotels & Resorts as the Management Company for the hotel when and if it is re-branded as a Wyndham Hotel in June of this year. It’s a Marriott hotel now, but that brand and the current management company will say Adios to Trenton on June 14.
Where did that number come from?
A gentleman named Michael Getzey, described by the Trentonian this morning as the president of the construction division for Marshall.
That is a lot of money. But that’s what it will take to fully renovate the place and turn it into a Wyndham?
Not exactly. There’s another $600,000 in transition costs specifically related to costs associated with swapping out all of the Marriott signage and logos for Wyndham, integrate the hotel’s IT systems with Wyndham’s and Marshall’s, and the like.
Could they save money by just turning all the Marriott M’s upside down?
That’s not a bad idea! I’m glad you’re thinking of saving money. The Board overseeing the hotel – the Lafayette Yard Community Development Corporation (LYCDC) – is all about saving money. I read in the Trentonian that the LYCDC Board also switched attorneys. The new law firm is Wong Fleming of Princeton, who will charge $175 an hour for their services.
Man, that’s steep!
Lawyers aren’t inexpensive, my friend. But that’s a whole lot better than the previous firm. I hear we paid Hill Wallack a cool $500 an hour for their lawyer Rocky Peterson.
WHAT?!? How much???
$500 an hour. For all his services including attending board meetings, attending City Council sessions, and everything in between. But a first-class successful joint like Lafayette Yard needed first-class support all around its operation.
What do you mean successful? I thought the hotel was losing money!
Oh, it is. Hand over fist. I was just joking.
But that $3 Million will turn the place around?
The $3 Million, plus $300,000 we gave the hotel last month to provide some working capital for the hotel during the transition, should help.
Help? Help? I would hope that would be the last money we’d have to sink into the hotel. What does the new management company project for the future after they take over?
I don’t know that they’ve crunched their own numbers. In a presentation they made to City Council last month, Marshall relied on a 5-year projection made by the Waterford Group, the current management company leaving in June.
That projection forecasts that the hotel will be very profitable by 2017, boosted by an immediate twenty-five percent rise in guest room income in the next year, after Marshall takes over.
Wow! Twenty-five percent more guest room revenue in one year. Marshall must be planning some pretty cool room renovations!
Actually, they aren’t. According to another guy quoted in the newspaper, Bradley Moore, who works for an interior design company associated with Marshall, the rooms don’t need too much: “As far as guest rooms, Moore doesn’t feel a total makeover is needed. He stated the some of the repairs would happen in bathrooms, which need all new mirrors, light fixtures, wall vinyl and towel racks. ‘At that point, you’re done,’ he said. ‘If you spend another dime in that room, it’s a dime too much.’
Really? All the plumbing stays?
Seems like. Oh, according to the Trentonian he also said “Replacing carpeting, beds, lighting and chairs in the rooms were also in the [plan].”
So where is all the construction going to take place?
In the bar.
The bar. Again according to Moore in the Trentonian,
“You’re a full service hotel, but essentially you don’t have a bar,” said Moore, who works for a company that has collaborated on projects with Marshall for 20 years. “You’ve got what amounts to a small pub that has a food court feel to it that’s a well-kept secret.”
Moore said the only construction demolition planned for downstairs would be the bar/lounge to help create a better connection to the lobby, so there is more activity. He claims the expectations are high from outside the hotel, but “the minute you walk in, it’s just tired.”
“That’s going to be the hub,” Moore said. “I have no interest in coming in here and just arbitrarily changing the cosmetics. I think if we can change some of the dynamics and the use of the hotel for the guest, then I think we’re onto something.”
So let me get this straight: according to the financial presentation created by Waterford and also adopted by Marshall, the five-year plan for success for the hotel is based primarily on a huge increase in guest room revenue?
Right. From a projected $3,353,626 in 2013 all the way up to $5,016,071 in 2017. All in guest room revenue.
What is the bar projected to bring in?
From a 2013 base of $298,567, beverage income is forecast to rise to $342,565 in 2017.
It seems to me that this emphasis in the newspaper article on the bar might be kind of misplaced.
Well, hey, you heard the man: after you spruce up the bathroom, “At that point, you’re done. If you spend another dime in that room, it’s a dime too much.” You have to “change some of the dynamics” for the hotel, and that means the bar, I guess.
Why haven’t “the dynamics” of the hotel been changed before this?
Well, in a “Historical Financial Review” prepared by the LYCDC Board in February of this year, the major problem for the hotel was not internal. It was a overall “market weakness in Trenton,” the major factors of which were described by the Board as
- No large businesses in Trenton
- The city lacked the socio-economic diversity to realize revenues
- Negative press – front page reporting of violence and crimes that are a deterrent for people to come into Trenton.
Wow. That’s not going to change for the Hotel with just a new brand and new management, is it.
Nope. This is still downtown Trenton. The success of the hotel depends on the success of downtown. Not the other way around. The LYCDC admits this was the reason for the hotel’s failure up until now. This will not change in the future. It would be foolish to expect otherwise.
Back to this $2.4 Million.
$ 3 Million.
Right, $3 Million. Plus the $300,000. Where will this come from?
Good question! The $300,000 was granted by City Council from the City’s current year budget.
Ouch. What about the $3 Million?
Well, that would be a lot of money for next year’s budget to handle. We’re likely looking at another large deficit, as the State is reducing its Transitional Aid funds, and eliminating millions of other dollars it’s previously paid as Payments in Lieu of Taxes, for non-taxable buildings the State owns in town.
The $3 Million would probably have to be funded from the proceeds of the sale of long-term bonds. This would create long-term debt for the hotel.
That’s a lot of money. But if the hotel becomes profitable, it would be able to pay off the debt, wouldn’t it?
Well, it hasn’t up until now.
The Hotel currently owes almost $31 Million right now, money it hasn’t been able to begin to pay off in the 13 years it’s been open.
Thirty-One MILLION Dollars in Debt?!?
That’s so far. We owe $14 Million in bonds already outstanding, $7.4 Million to the Trenton Parking Authority, and the remaining nearly $10 Million to the State of New Jersey (to various state entities).
So another $3 Million in Debt would raise that number to…
A total of $34 Million Dollars.
Whoa! What does the State think about this?
They seem to think that as long as the City “develop minimum skill requirements for new members” to serve on the LYCDC Board, that is enough for them. At least, that’s the only reference to the Hotel made by the state Department of Community Affairs in this year’s Memorandum of Understanding, which the City signed in order to receive this year’s Transitional Aid.
I would be a lot more worried, if I were the State. After all, this is taxpayer money we’re talking about.
The ways of the State of New Jersey are mysterious and inscrutable, my friend. Besides, if I were the State of New Jersey, I’d be worried about a lot more in Trenton than just the hotel, you know what I’m saying?
I do. After reading that newspaper article, AND looking at the wildly over-optimistic financial projections, AND thinking about the “market weakness” in Trenton that will not change just because the hotel is open, AND thinking about all the debt we have already not even including $3 Million in new debt…
Remember, that’s only “a lower-end number!”
Wow, that means it could easily go even higher! After thinking about all that, I don’t know that going ahead with the Wyndham deal makes a lot of sense. What’s the alternative?
Close the hotel. Sell it for whatever the market will bear and let a new operator take the risk. Either that, or risk another $3 Million – at least – plus any new operating losses that we may see in case a new bar doesn’t pack ‘em in.
You know, I think you’re probably right.We should close the hotel. Now. Before we burn more taxpayer money, from the City and the State, in a hopeless attempt to turn around in the next five years what never worked in the last thirteen.
Are you sure we can’t just turn all the M’s upside down????