In a rundown of the latest news in Worldwide Bribery and Corruption in government and private industry, a blog on the Wall Street Journal’s website this week mentions the impending federal trial of the Indicted Occupant of Trenton’s Mayor’s Office.
The Trentonian’s daily countdown (It’s T-Day -32, people!) to the scheduled January 6 trial of the IO and his co-defendants is listed third in this week’s rundown. The Indicted One is in some pretty serious company.
Mentioned first is a scandal involving international shenanigans over West African mining rights. According to a Forbes article to which the Journal links, “It’s a plot worthy of a Hollywood thriller: a deceased West African dictator, lucrative mining rights and an elusive Swiss-based billionaire.”
Number Two on the Journal’s list? Italy’s biggest oil and energy company denies claims that it paid bribes and kickbacks to get business in Algeria.
Next up: “The countdown to the bribery trial of Trenton Mayor Tony Mack continues.”
Rounding out this hit parade are links to stories about a former Bear Stearns financial adviser being sentenced to prison by a US Federal judge for his conviction for bribing a Texas judge; and from the India beat, a story from the Times of India about the sentencing of two former officials of the Indian Supreme Court after they were found guilty of soliciting kickbacks from those seeking justice from that Court.
Wow. Pretty heady stuff for a small New Jersey city, to hang out in the big leagues of global sleaze, corruption and bribery. For the first time in quite some time, Trenton is Making and the World Is Taking!
At the same time that the world is hearing about the imminent trial next month, we in Trenton are reading all kinds of stories alleging uncounted numbers of other incidents of corruption associated with members of the current Administration. After three and one-half years of hearing news on a weekly basis of new scandals and missteps on the part of the IO and his minions, over the last few weeks the pace of disclosures is rapidly incre4asing. It’s like the walls around the few remaining secrets and scandals yet to be revealed are all coming down.
It ain’t pretty.
We’ve been reading that the IO has been a deadbeat on his city property taxes and his water bill. Federal prosecutors revealed claims of many more instances of bribery and kickbacks discovered during the investigation that led to the charges now pending in Federal Court. This morning, a local t-shirt vendor is defending himself and his company against suggestions made that their success at bidding for a Trenton city contract required paying a kickback to city officials. The vendor’s defense is not helped by reading in Alex Zdan’s Times article today that his company’s bid “was $2,300 higher than the closest competing bid, records show.” That the t-shirt in question at the heart of this particular story read “Celebrating 25 Years: Keeping Trenton Clean” just provides another instance of the kind of extreme irony we’ve seen a lot of in the last 3 years.
You can’t make this up.
“This week’s new allegations against Mack and others are contained, almost as an afterthought, in a motion by the U.S. Attorney’s Office” writes Mr. Zdan in his piece today. He himself broke the news last week that the IO failed for almost five years to receive a bill for water usage in a building he owns on West State Street.
All of these disclosures coming from the Feds and the media must be an embarrassment to the office of Mercer County Joseph Bocchini. Apart from the conviction of the IO’s half-brother Stanley “Muscles” Davis and colleagues for crimes committed while on the job for the City’s Water Works, and the failed prosecution of former union official and city employee David Tallone, the County Prosecutor’s office have been silent bystanders in the midst of so much rampant corruption.
Two years ago I suggested that Mr. Bocchini had “a terminal case of the slows,” when it came to investigating and prosecuting all the nonsense that was going on in City Hall that was known way back then. In fact it’s now been revealed, in another article by Alex Zdan that “Members of a grand jury debated whether Mayor Tony Mack should face indictment in the Trenton Water Works corruption case that led to the conviction of his half brother, but a prosecutor advised them against charging Mack in early 2011 because of ‘insufficient evidence to prosecute the mayor at this point,’ according to transcripts of the grand jury proceeding obtained by The Times.”
Federal investigators didn’t seem to have a problem with collecting sufficient evidence for their case! In fact, as we read this week, they collected evidence of so many crimes they apparently had their pick of the strongest one to pursue.
I can only wonder what kind of reception these revelations are getting in the County Prosecutor’s Office, and that of the NJ Attorney General, and even the Governor’s Office. That there were allegations of corruption made against the mayor of New Jersey’s capital city serious enough to be discussed before a Grand Jury THREE YEARS AGO, dating back almost to the first days of his Administration, and not pursued “for insufficient evidence… at this point” is astonishing. A lot of people in New Jersey’s criminal justice system were asleep at the switch for three years. If not for the FBI and the Federal Department of Justice, I doubt any action would ever have been brought.
Speaking of “asleep at the switch,” let me just make a passing reference to the members of Trenton’s City Council. I almost hate to: this Council and these members are such easy targets, it’s almost like kicking a cat. But I can’t let one aspect of this morning’s news go by without comment.
David Foster in today’s Trentonian reports that at least two council members were approached by city employees near the beginning of their terms in 2010, and told “the Mack administration was asking them for money to keep a job or to get a job,” as quoted by South Ward rep and current president George Muschal. According to Mr. Foster, at-larger Council member and former president Phyllis Holly-Ward “corroborated Muschal’s comments.
These statements follow one of the specific claims made by Federal prosecutors “that revealed a scheme by Mayor Tony F. Mack, his brother Ralphiel Mack, close associate Joseph “JoJo” Giorgianni and former city recreation employee Charles Hall III to collect kickbacks from city employees in exchange for keeping their jobs.”
This article doesn’t explain what those two council members did upon receiving those charges from the city employees. It is known that council members have in the past approached prosecutors and law enforcement with information about other incidents. They may have done so on this occasion, too. I don’t know. I will give them the benefit of the doubt that they did so, only to have their information go into the black hole of the County Prosecutor’s or state Attorney General’s office.
What I do know is that Council members have failed for nearly four years to take any effective meaningful action in their capacity as elected public officials on Trenton’s governing body that would have disciplined or removed the officials involved, or to fix the city processes and procedures that made such kickbacks possible. Without compromising the integrity of any investigations then under way, it would have been possible to shine public light on what was going on in our crooked City Hall.
I grant you that effective legislative action would likely have been stymied by the 3-person defensive line for the Administration’s team made up of members McBride, Jackson and Bethea.
But any or all of the other 4 members could have and should have done a much more substantial job of communicating public outrage and providing disciplinary oversight to the Administration than they proved capable of.
All we ended up getting were photo opportunities of them in matching yellow t-shirts and “safe” boxes. Not worth very much, is it?
I re-post a link here to an article from February 2011, with this Council facing many of the same issues and obstructions they face today (including asking the whereabouts of a missing-in-action Sam Hutchinson).
They were frustrated, helpless and unproductive then, and they have made no progress in almost three full years.
As a meager defense, really an epitaph, of their actions and inactions, Ms. Holly-Ward is today quoted by Mr. Foster:
Given the recent developments, Holly-Ward said she is trying to find the next steps in council’s role.
“It’s just a list of things that we have to investigate and follow up on,” she said. “We really are chipping away at it the best we can.”
Ms. Holly-Ward, if that is the best you can offer after nearly four years – “chipping away at it the best we can” – it is not nearly enough.
In response to my post yesterday a member of Trenton’s Council, North Ward Rep Marge Caldwell-Wilson wrote on Facebook yesterday. I thank the Councilwoman for being a reader, and taking the time to thoughtfully respond. But in doing so, she actually reinforced my main point of yesterday’s column, and provides a further example of my deep frustration and disillusionment with the members of this Council. I will take the liberty here of re-posting some of those comments from the group page on which they appeared, as a fair use of what is intended by its members as a forum to foster civic conversation, because I find them so illuminating.
As you may recall, my main point yesterday that after nearly three and one-half years gone of their 4-year term, Trenton’s City Council has repeatedly consented to being lied to and treated with contempt by several members of the current Administration. Rather than take meaningful action and exercise its considerable powers to discipline and even remove any and all City officers other than the Mayor or a member of Council, this body has been content to periodically complain and sputter outrage.
This theme has apparently touched a nerve. Ms. Caldwell-Wilson wrote in reply:
Thank you for all of your comments, love to have you spend a day with me when I am DOING NOTHING…
we actually do demand answers to all of these questions, at Council and at Executive Board meetings. Just ask the folks who attend the meetings. Mr Roberts has been told the Recreation Budget is Zero until we get full disclosure. Why would you think we are not trying to get this information even via meetings with DCA.. Just dont Blog it Mark…
You don’t know that my being busy does not include trying to get answers…I just wish folks wouldn’t draw conclusions. I would be happy to have private conversations with anyone about this, or even invite them to run for a Council seat, it is possible they could do a better job
In these short notes, the Councilwoman explicitly agrees with much of the sentiment I expressed yesterday. In a reply to her note, I posted:
I am sure that, as you say, “we actually do demand answers to all of these questions.”
You were saying the same thing almost three years ago. From The Times, February 23, 2011:
“We’re just very frustrated with the administration right now,” Reynolds-Jackson said. Caldwell-Wilson said she was willing but reluctant to use the subpoena power.
“I’m not sure that were going to have to do that,” she said. “I would hope we don’t have to do that.”
“Personally I’m tired of getting no answers to my questions here,” Caldwell-Wilson said. [Emphasis mine - KM]
AREN’T YOU STILL TIRED OF GETTING NO ANSWERS TO YOUR QUESTIONS, 3 YEARS LATER. AREN’T YOU TIRED OF BEING LIED TO, AGAIN AND AGAIN????
WHEN WILL COUNCIL EVER DEMAND ACCOUNTABILITY, AND ENFORCE *** CONSEQUENCES *** FOR THIS SHIT?!?!?!?
The point was reached long ago when getting information was enough. Along with my post, the comments above also conclude that Council has been fed bad information and treated with contempt for years, and has hardly done one damned thing to remove the corrupt, contemptuous and insubordinate individuals from the positions they have that allow them to do the same thing over. and over, and over again.
Yes, I know you would likely be stymied again, 4-3, as you have before. But is not the attempt worth the effort? Wouldn’t it be worthwhile to haul these guys down to Council, put them under subpoena, and put all this stuff on the public record?
You are not an information-seeking body; you are the governing body of the City of Trenton!
What’s the saying? “Fool me once, shame on you. Fool me twice, shame on me!”
What so you say when you are again and again fooled, and by the likes of Anthony Roberts and Tony Mack to boot!?!?!?!
As I said yesterday, it must be extremely frustrating to several members of this Council that their term has been such a failure. Most of the blame has to accrue to those actually responsible for the carnage: specifically the Indicted Occupant of the Mayor’s Office, and his close colleagues such as Fuckup Without Portfolio Anthony Roberts.
But others have to share the blame for the current state of affairs, too. The State’s Department of Community Affairs (DCA) has talked a good game for these three years, promising strict accountability and oversight tied to State financial aid. By and large, DCA has been a toothless watchdog, and has done little to restrain the IO from doing almost anything he likes.
The Mercer County Prosecutor’s Office has gone after some of the criminal misbehavior of this administration, but precious little. It has fallen to individual civil action taken on the part of wronged employees such as Maria Richardson and Michael Morris to reveal the scope of incompetence and corruption in City Hall.
But we don’t elect the DCA or the Mercer Prosecutor. They are not directly responsible to the citizens of this City as members of Council are. They are the members of Trenton’s Governing Body. It is on them, rightly or wrongly, that I consider responsible for enabling so much of this criminality and corruption as long as it has.
They have failed to grasp that their job demands much more than “demanding answers to all of these questions. Their job requires much more action than they have been strong enough to take.
Yesterday, I pointed my finger at each member of this Council “who collectively have failed in their job, deserve no more than this current term in office. If they had any honor left they would acknowledge that their best was in no way good enough, and step aside from any re-election effort.”
It may not have been her intention to do so, but Councilwoman Caldwell-Wilson implicitly endorsed that sentiment when she wrote yesterday,
“I would be happy to have private conversations with anyone about this, or even invite them to run for a Council seat, [if they think] it is possible they could do a better job” [Emphasis mine - KM]
It would be hard to think of a more explicit offer than that.
OK, who is up to it?
I am reminded this morning of Matthew 7:5 -
“You hypocrite, first take the log out of your own eye, and then you will see clearly to take the speck out of your brother’s eye.”
Why, you ask? Because of a post yesterday on her Facebook page from City Councilwoman At Large Phyllis Holly Ward. I take the liberty of re-posting it here.
“NEVER stop dreaming and setting goals for your self! Yesterday I reached another one of my goals. “My goal in this first term in office was to create a Statewide Organization for City Council members (past and present) We are the only legislative body that does not have an organization to learn and network. Determined to make this happen over the past two years I reached out to many sources to help. Yesterday in partnership with the NJSLOM we held the first ever conference session in A.C. for City Council members. We had a great panel of statewide council and attorney speakers. It was a huge success with over 115 Council members/ Mayors/ Attorneys attending the session and joining in to start the first ever City Council organization. The word has spread so quickly this morning I have already received calls from council members in other States eager to join in and the make organization a National one. WOW!”
Wow, indeed. In principle, there is nothing wrong with her idea, in itself. But when the business of running the City of Trenton has been woefully ignored by this City Council, I find it nothing short of frivolous and pathetic to read that this effort is called “My goal in this first term in office.”
On some level, I suppose, I can appreciate that for a Trenton council person with little else to show for their 3 1/2 years in office, one might be a little desperate to find something – one thing – that could be considered a positive accomplishment. But that does not detract from how poorly timed and framed Ms. Holly Ward’s note was. An organization of City Council members sure looks like a speck to me, compared with the logs that the good Councilwoman should be dealing with.
This comes, after all, during a week of more press accounts of the continuing mendacity and corruption in Trenton’s city government, and Council’s utter impotence in dealing with any of it.
For example, there is this morning’s news about Business Administrator Sam Hutchinson. After months of defying Council as well as the City’s Law Department by insisting that his practice of paying a staffer with Federal funds was legal and proper, the BA has now admitted that, oops, it wasn’t!
Fewer than 10 days ago, Mr. Hutchinson – whose prior work experience before coming to the City included 20 years as a lawyer with the US Department of Housing and Urban Development (HUD) – swore up and down that using HUD funds was OK: “I in no way aimed at skirting federal guidelines,” he told The Times, while at the same time a memo from City Housing Director and former Law Department Director Walter Denson written last month was no doubt sitting in his inbox asking “Why does he [ Hutchinson] Continue To Violate Federal Rules!” (sic).
Council huffed and puffed last week about responding to Hutchinson’s stubborn resistance: “City Council sent a letter to Mayor Tony Mack on Oct. 30 asking the mayor to intervene and force Hutchinson to return Robinson to the department of Housing and Economic Development. But Mack has declined to say whether he will comply, explaining that he does not discuss personnel issues.”
Right. Like that would ever happen.
Council, I am sure, will let this incident slide. Why should we expect them to do any thing in response to Hutchinson? After all, the Council was content to be openly lied to in open Council session last week by Fuckup Without Portfolio Anthony Roberts.
In a session where the FWP was supposed to explain why the City’s Recreation Department was spending so many City dollars on events and programs Council never authorized, Roberts openly bullshitted the members. He denied that City funds were used on events such as this weekend’s Thanksgiving Day Parade. “All of the events you see in recreation that are supported by the mayor are privately funded,” he [lied], presumably with a straight face. He refused to disclose the identities of any of the “private funders.”
However, his assertion was quickly shot down. In that same Times article, BA Hutchinson (for however much his statements are worth!) and City Budget Director Elana Chan “said no donations have recorded in the city’s accounts and there is no amount included in the city’s budget for any of the events, including the parade. ‘We are not aware of these donations,’ Hutchinson said.”
So, will City Council respond to Roberts contemptuous falsehoods made to them in open session?
What do you think?
For over three years, in the face of continued – no, uninterrupted – incompetence and corruption on the part of this Administration, this Council has not once taken any action to remove idiots like Roberts and Hutchinson, or the many who came before them, from their positions. This space has on multiple occasions -here, and here for starters – tried to remind the Honorable Members that they had the power to fire the sorry ass of any of these clowns other than the Indicted Clown-in-Chief per our City Ordinance.
Have they tried? Ever? Apart from one sad attempt to enforce the 90-day terms of appointed Acting City Directors, an effort easily swatted aside by the Indicted One, the answer is NO.
Time and again, for over three years this Council has been lied to, misled, hornswaggled, swindled, robbed, pickpocketed, pilfered, filched and ripped-off. Trenton, and its poor citizens are the worse off for it.
That’s why the boast by Ms. Holly-Ward that she is proud of starting a first-ever organization of City Council members strikes me this morning as profoundly off-key. She has one pretty skewed set of priorities to think that things are going so well in Trenton for her and her colleagues that she can work on something like this.
This Council has too many gigunda logs in its collective eye to waste precious energy dealing with collegial specks in the eyes of fellow Jersey Council members. Nice idea, maybe, but there’s too much going on here they need to attend to, and that they have failed to address.
Ms. Holly-Ward and each of her six colleagues who collectively have failed in their job, deserve no more than this current term in office.
If they had any honor left they would acknowledge that their best was in no way good enough, and step aside from any re-election effort.
But I don’t expect that. Each will probably point to all the others and say “I tried to do my best, but it was those other guys on Council, and the Mayor, and DCA, and the economy who made it impossible for me. I deserve another chance. With a new mayor and new Council members, I will be able to get something done.”
I don’t buy it. They had their chance. They are done.
An auction has been scheduled for sale of the failed taxpayter-owned Lafayette Yard Hotel. There is already one bid on the table – for $5.5 Million – from a company called Edison Broadcasting.
If no other bids are received, that $5.5 Million would be a far cry from the $30-plus Million outstanding in debt on the property. But it would at least be something.
But the City is not likely to see even that much from the sale of the hotel and all its assets. As we found out last week, the first $2 Million of any sale proceeds – nearly 40% of the only bid now on the table – will be deducted to pay off a loan authorized by the hotel’s governing board, the Lafayette Yard Community Development Corporation (LYCDC), to keep the doors of the hotel open and continue operations as usual during the transition period to a new owner.
I must ask, to what end are we keeping the hotel open right now? Why did the LYCDC Board – without any City Council input or approval – decide to cut the proceeds nearly in half by keeping the place on life support? The hotel is dead, being kept alive only by this loan.
In today’s Trenton Times, we read of the admission by one of the LYCDC’s bankruptcy attorneys, Julie Cvek Curley, that “the hotel is losing between $70,000 and $100,000 a week” in the weeks and months leading up to the auction. [Emphasis mine - KM]
In my last piece, we reviewed that the Hotel’s own financial projections released earlier this year estimated annual expenses from normal operations of $5.2 Million for 2013.
In other words, just about $100,000 per week.
So, as of today we have statements by three different parties with knowledge of the situation (none from the LYCDC Board itself, not surprisingly) that the hotel’s operations are being deficit-financed almost entirely by a loan against the prospective sale proceeds from the upcoming auction, at a rate of 70% to 100% of weekly expenses. Today’s news article also seems to implicitly confirm that, at a current loss rate of up to $100,000 per week, the hotel has taken no steps to reduce operating expenses in the months leading up to the sale, even with a collapse of business income.
Again, I have to ask WHY?
Why has there been no outrage from the Administration and City Council that the hotel Board authorized in secret a $2 Million loan to finance operations up to the auction?
Why is there no outrage that this loan will likely cut the eventual likely proceeds from the auction by 40%?
Why is the hotel continuing business as usual, burning cash at the apparent rate of $100,000 per week, when it is doing so at almost a complete loss?
Why is the hotel still open?
We were told by hotel supporters over the spring and summer that the hotel couldn’t be closed down for fear of not attracting interested buyers. But we have several prospective buyers who may participate in the November 25 auction, and an actual bid from one is on the table. What purpose is now served by fully subsidizing the place when there is little to no business?
Why can’t we close the hotel? There are almost five weeks between today and November 25. If we closed the hotel tomorrow, we’d still likely have some weekly costs, certainly. But if we cut the bleeding red ink by only half, we could save around $50,000 a week, say.
That’s a quarter of a million we can save, people. By simply trying to cut our losses.
I know that one quarter-million may not seem like a lot of money compared to the tens of millions we will still be on the hook for after we unload this financial wreck. But from where I come from, $250,000 is still a lot of money.
Why aren’t we trying to salvage some more out of this deal?
Why is the hotel still open?
Shut it Down. Now.
I’ve been pretty quiet around town for several weeks, and that isn’t going to change too much for several more. But this morning brings some news that begs for at least some note and some comment. Not surprisingly, it concerns the Lafayette Yard Hotel.
The long, tangled tale of the Trenton’s municipal history as an innkeeper is not a happy one, but one that may be in its last months. The Board of the Hotel, the Lafayette Yard Community Development Corporation (LYCDC) last month finally decided that the hotel just could no longer be considered a going concern. The widely-publicized forecast that, even with several hundred thousand dollars of new funds pumped in the hotel operations by Trenton’s City Council early this year, the place would finish 2013 with a loss of $800,000 was the final straw.SO the LYCDC filed for bankruptcy protection, and has contracted with a third party to conduct an auction of the property, tentatively scheduled for next month.
However, like everything else associated with this place, even this endgame is proceeding in ways that are very odd, and troubling.
Like this morning’s article in the Trenton Times by Jenna Pizzi. The headline says, “Trenton council advised to get appraisal for Lafayette Yard Hotel,” and describes last night’s Council session which discussed a proposal by the hotel board to spend $16,000 to secure an independent appraisal of the value of the hotel prior to the auction. According to the Times, “The Lafayette board attorney, Gregory Johnson, told city council last night having an appraisal in hand would help them to determine whether the bids they receive on the hotel are good or bad.”
This makes no sense. An auction will draw competing bids which will establish the market price for the hotel, by definition. What would an appraisal possibly provide that would be useful to this process?
If the auction receives say several bids in the range, say, of $5 to $8 Million Dollars, and the appraisal says the value of the place should be $15 Million, what is the better indicator of value: an appraisal based on intangibles and hypotheticals, or bids from companies actually willing to pay money?
Would Council kill a sale because the actual bids received might not come close to a pie-in-the-sky appraisal? Because that’s the only role an appraisal can have at this stage in the process.
This isn’t hypothetical. The same Board Attorney who asked Council for funds to pay for an appraisal also told Council that “the board has received a bid for $5.5 million, which will act as the starting bid for the auction.” [Emphasis mine - KM]
Okay, then! Sounds to me that you have a real life market appraisal right there! The place is worth at least $5.5 Million. OK, everybody, let’s move on!
Council members in support of this proposal to spend $16K for an appraisal that has effectively already been done, such as Zachary Chester and Kathy McBride as reported by Ms. Pizzi, apparently do not understand the market value for the hotel that has already been clearly demonstrated.
City Business Administrator Sam Hutchinson clearly understands where we are with this. Referring to the LYCDC proposal last night, Hutchinson told Council, “Five weeks out to the sale, an appraisal — the bidders, they themselves, can appraise the property.”
And they are doing so, and will continue to do up until the auction. It’s called due diligence. We don’t need to duplicate their work. Let’s move on.
But very, very cautiously. I for one can still not trust any projections or numbers coming from the LYCDC. This morning’s article devoted most of its words – as I have as well, so far – to the appraisal proposal. It passed over, almost as an afterthought, a bigger bombshell.
As mentioned above, it was largely the announcement in August that the Hotel would at year’s end lose about $800,000 from operations that led the few remaining hotel supporters to conclude that the struggle to keep the hotel’s doors open was doomed. $800,000 was too big a loss to pretend the place could survive.
So to read this morning LYCDC’s attorney Mr. Johnson told Council “that during the bankruptcy process the Lafayette board has had to borrow up to $2 million from Racebrook financial [parent company of the firm engaged to conduct the auction] to keep the hotel operational” is simply astonishing!!
Two Million Dollars to keep the doors open another two months!!
Two Million Dollars that “Racebrook has ‘first priority’ [to] and will be repaid the $2 million from the proceeds of the sale.”
This $2 Million loan was first disclosed earlier in the week, but hasn’t yet gotten any comments online or in the press as far as I can see. Which is why I did not want to let this morning’s news go by without making note.
For the hotel to need this level of support in these months clearly says that the hotel is not on track to lose $800,000 by year’s end, but has lost about 250% of that so far!
Let me put that $2 Million in perspective. According to financial projections released earlier this year by the LYCDC itself, the hotel’s annual operating expenses for the whole year of 2013 were estimated at a little under $5.2 Million.
For hotel management to need a loan of $2 Million Dollars for these months means that the hotel is earning close to ZERO Dollars in Income, while expenses continue without any reduction.
Supporters of the hotel long argued that it was important to keep the hotel open during any sale process. To close the place down would only depress the sale price, it was claimed
But I ask now, would the sale price be depressed by more than $2 Million Dollars??? Because we will not get back from whatever price the hotel goes for at auction. “Racebrook has ‘first priority’ [to] and will be repaid the $2 million from the proceeds of the sale.” Right off the top.
The eventual sale price will surely be far, far less than the amount of money needed to cover the tens of millions in long-term bonds and other debt still outstanding on the hotel. City taxpayers will be paying their hotel bill for many more years to come.
About the best that can be expected is that the sale will be to a private owner who will be able to run the place as a more modest operation that can at least pay its fair share of annual city property taxes.
Even that modest future may be in doubt. In another newspaper story last week, David Foster reported in the Trentonian that “there may be other bids other than for hotel use,” according to another attorney representing LYCDC.[Emphasis mine - KM]
So, what might an “other use” for the property be, hmmm? We’ll have to wait and see on that one, and hope for the best that can be salvaged out of this bad, bad situation. But even that “other uses” are being considered strikes me as terribly ominous.
Even in its last months, the Lafayette Yard is a money pit. Good riddance!
TRENTON, NJ – September 23, 2013 – For years, this has been Trenton’s biggest wreck. Its prominent location on Trenton’s landscape has provided daily reminder of NJ’s Capital City’s proud past, and current troubles. For too long, it has proved impossible to remove, a leading cause of the City’s ongoing blight as well as a powerful symbol.
Pictured here with the Glen Cairn Arms, demolition of which started today.
I haven’t been able to post very much lately, and that won’t change for at least the next couple of months or so. Busy at work, which is a good thing. But this morning I just had to respond to a couple of things that struck me as absurd.
Lord knows that Trenton is in a pretty tough situation. The current elected “leadership” lurches from one embarrassment to the next. One of the few things that may help the average citizen make it through the day is to hope against hope and pray that next year’s election might be an opportunity for more capable and honest people to run for local office, and an opportunity for Trenton’s voters to make smarter choices than they’ve been making for years.
Looking at Kathy McBride and Paul Perez this morning, I am not encouraged.
Ms. McBride is, of course, a member of the current Trenton City Council. This morning, the Times posted an Alex Zdan article describing how the Councilwoman bought some local commercial TV ad time to air a spot she produced taking Governor Chris Christie to task for neglecting her pleas for state help to fight the on-going plague of violence hitting this city.
First off Ms. McBride, whatever you spent to produce that spot is way too much! How you approved an ad that features the world’s worst camera turn – ever! – is beyond me. You are stiff and not credible. Your appeal to the Governor a few months ago to “deputize” outside law enforcement to work in Trenton was never adequately explained at the time. Your spot does nothing more to explain what you are proposing. All the piece does is provide another illustration of how you are among the dimmest of a very low-wattage body.
But it’s the fine print of this ad that struck me. “Paid For By Supporters of Kathy McBride,” the ad states, as it must by NJ Election Law Enforcement Commission (ELEC) rules. But there does not seem to be such a group in existence. According to the few reports filed by Ms. McBride for the upcoming election, her campaign committee is called “Friends to Elect Kathy McBride.” But, after looking at the Councilwoman’s financial reports, I suppose it doesn’t really matter. If you believe these reports, the Councilwoman’s campaign should be broke.
The two financial reports filed by her campaign, both submitted last week on September 4, detail the first and second quarters of 2013. Per the First Quarter report, she spent $1490.39, on expenses associated with a Fundraiser dinner in March of this year. But she only declared $675 in revenue for the quarter. Fear not, because after deducting $1490 in expenses from $675 in revenue, she was left with an ending balance of… $675.00.
Pretty neat, huh?
And she maintained that balance to the end of the 2nd quarter of this year, raising no money, but spending none, leaving her at the end of June with that same $675.00 in the bank.
But in that case how, then, did she pay for the expenses of opening a “constituency office” in June? And how is she paying for these TV ads?
I suppose we may find the answers to these questions in her next financial report, due October 15. But I won’t hold my breath. Anyone who can subtract $1490 from $675 and come up with $675 isn’t to be trusted when it comes to any more complex numbers.
The Councilwoman is definitely running for something next year, whether for re-election as an At-Large Council member or, as is rumored, Mayor. This tv campaign is obviously an attempt to broaden her image and present her as a serious and sophisticated public figure.
But in doing so, Ms. McBride seems to be ignoring Abraham Lincoln’s advice. One hundred years before politicians started appearing on television, he said “Better to remain silent and be thought a fool than to speak out and remove all doubt.”
With her TV ad, as she earlier did with her infamous “Blue Waffle” caper, Kathy McBride once again removes all doubt about her.
So what’s up with Paul Perez? He is one of the many, mostly silent, people running for Mayor in next year’s election. He was born and raised in Trenton, but returned only last year after several decades away from the City in Federal service, in several military and civilian capacities.
He has no recent and relevant record of experience in Trenton civic affairs, so he is running primarily on his extensive record of that Federal service. As he demonstrated competence and leadership in progressively more responsible positions in the US Government, so his argument goes, so he will demonstrate the same for Trenton’s governance.
In support of that argument, Mr. Perez has presented a nice-looking website. This page describes his background.
Actually, after reading this page, one really does not find out much about Mr. Perez’s background or his experience, other than a recitation of job titles he’s had as well as listing the schools he attended and the agencies he worked for in federal service. There’s no sense of the accomplishments, if any, he achieved in his career to date, or the kinds of skills he possesses.
In fact, one finds out rather more about the history of the National Science Foundation and the Export-Import Bank of the United States than one does about Mr. Perez. The history of these agencies is accompanied by illustrations of the official Seals of those, and other government agencies, along with a picture of the Pentagon.
Here’s how it looks.
I’m sure Mr. Perez’s intention is to reassure Trentonians that, even though he has no record in Trenton to run on, he surely knows government service, and can easily make the transition from running a large Federal agency to a small NJ city.
However, for me this page on his website demonstrates the exact opposite. Rather than being an example of how much Mr. Perez knows, it actually shows that he is either ignorant of, or blissfully negligent of some basic rules of the game.
Namely, that is against the law to use the official seals of these government agencies for any non-official purpose, let alone in promotion of a campaign for political office.
You see the Department of Defense seal above? According to the official DoD website, “The Defense Department and Military Seals are protected by law and reserved for official use only. Under U.S. Code Title 18, Section 506, unauthorized use of the Seals may include, but is not limited to commercial, marketing, advertising or promotion use by any non-government entity and is punishable.” [Emphasis mine - KM]
Ditto the Department of Homeland Security: “The Department of Homeland Security (DHS) seal is protected by several sections of the United States Code (USC) and any unauthorized use is a violation of the USC, specifically Title 18, sections 506, 701, and 1017.”
Now, this is a small embarrassment, but very telling. Mr. Perez is running for Mayor of Trenton on a non-existent record in Trenton. Instead, he touts his extensive resume in past government service as demonstrating his qualifications for the job. Yet he does so in a way that demonstrates either a significant ignorance or carelessness when it comes to presenting that very same government service to potential voters.
What do we take away from this? I for one take away that, whatever Mr. Perez’s talents, skills and expertise, he is nowhere near ready to be Trenton’s mayor.
I suppose that as the 2014 election approaches, we’ll continue to see more of these attempts from candidates seeking to impress us with their personas and their messages. Based on these two recent examples, it’s going to be a long and exasperating year if this is kind of quality we can expect from these guys.
As we hear of the year’s 32nd life taken maliciously, in broad daylight (as if that means anything anymore), Trenton’s Police Director Ralph Rivera has unwittingly spoken the most succinct and sadly true words I have heard or read about this town’s tragic spiral.
“The area People’s Bakery is in is normally a quiet and safe area,” Rivera said.
Yeah, every area is “normally” a quiet and safe area. Until it isn’t, anymore.
“This shooting is no reflection on the area.”
But it is a reflection on the City, to the shame of us all.
THE IMPERIAL CAPITAL – XXVIII Augustus, Year X of the Consulship of His Imperial Majesty (LXIV Common Era)
In the midst of a series of devastating fires that threaten to consume the entire Imperial Capital, His Majesty the Imperator Nero Cladius Divi Claudius Filius Caesar Augustus Germanicus (Emperor Nero) hosted a rare public press conference to extol his urban improvement campaign of Bread, Circuses, and Parks.
“These fires are actually a good thing for Rome. Blocks and blocks of obsolete and crowded housing, private businesses, scholae and temples are being cleared to make room for several new parks and open public areas,” proclaimed the Emperor. “The accompanying breakdown in public order and public safety will encourage weaker and less committed Romans to flee the City. Those who are left will appreciate these new pastoral spaces even more. Hail Caesar!”
“Hail Caesar!” was shouted in response by the Emperor’s counselor, advisor, food taster and Royal Lapdog, the Chief Eunuch Antonius, standing behind and to the right of His Majesty.
When the floor was opened for questions, Nero was asked whether the breakdown in public safety was actually a major threat to the lives and property of the citizens and people of Rome.
The Emperor thundered in reply, “Silence! I speak today only of Bread, Circuses and Parks! Do not trifle with lesser matters. My legacy will be measured in the open spaces that will bear my name for all time. People live and die; the poor are always with us. A garden goes on forever, watched over of course by those few Roman City Guards who remain at their posts. Harsh Not the Imperial Mellow!!”
“Don’t let them steal your joy!” echoed the Eunuch Antonius.
A local tribune of the people, Marcus Pontonius, dared to ask the question that was on the minds of all those in attendance, a question asked by many in the Roman Forum for many years of Nero’s Imperium, even before the current rash of fires. “These fires have occurred under your Administration, and as a result of your policies and your decisions. Will you resign?”
“No,” said Nero. “Why would I do that? Do you know what I had to do to get to this position? Well, do you? My mother slew her husband, my predecessor the Emperor Claudius, with poison mushrooms. Do you know how hard those are to come by?”
“You should be blaming Claudius, not me, for all these fires, after all. He accepted millions of denarii in funds to build housing blocks from the surrounding villas and towns of Rome that would have been used to house citizens in their towns. This over-abundance of dense housing was his creation, not mine.
“These fires are gifts from the Gods, and they are merely clearing out the rabble from this great city.
“Resign? Why would I resign? I have worked too hard to become a living God to resign!!”
“I have done nothing but good for the City! Rather, it is you scribes and disloyal Romans who should be punished. You pass on nothing but tales of woe, unhappiness, plague and disaster. I should take all of out and put you to death!”
The Chief Eunuch behind the Emperor glared at the assembled scribes and rubbed his hands together, as if he relished the chance to personally crucify the Emperor’s Critics.
Nero finished the session with a dismissive grunt and a wave of his hand. He then turned to leave the Imperial Press Room, as smoke burned the eyes and filled the lungs of all in attendance.
Rome, the Eternal, the Proud, continued to burn.
The place is broke. It’s losing money on a continuing basis every month. Budget projections fall short and frequent infusions of cash from the parent entity are needed just to keep the doors open. Management has resorted to laying off employees, and starving the place of needed capital improvements. Compared to similar establishments in the surrounding area, it doesn’t seem to have much going for it. Its business model is so weak, there are serious, serious concerns that it doesn’t have much of a future as a going concern.
Oh, yeah, and the hotel inside its borders isn’t doing well, either.
I’m talking about the City of Trenton, actually. The Lafayette Yard Hotel and Conference Center, the loss-making inn owned by the citizens of the City, is in as desperate a shape as the city it calls home, and is a pretty good analogue, in miniature, of New Jersey’s Capital City. Both are in pretty sad shape.
“Going Concern” is a concept in financial accounting, defined here as “The value inherent in an active, established company as opposed to a firm that is not yet established. The value of the assets of a business considered as an operating whole.”
But this can be expressed otherwise, and more usefully for other contexts, by asking a few questions: “Does this establishment have: adequate resources to allow it to operate; ongoing and future clients that will keep it going; products or services that people want and need; a viable business model? In short, looking at its prospects, does the place have a future? Will it survive?”
Looking at the Lafayette Yard first, I have major doubts that the place can be considered a going concern. In its transition from its previous incarnation as a Marriott Hotel (an identity and brand that did not mean financial success during more than a decade of business) to another brand (perhaps Wyndham, perhaps not), the hotel figured it had a rough road ahead. A 5-year financial projection prepared last winter by the hotel’s previous management, and adopted by the new management, modeled a hopeful climb to profitability starting in 2013. These projections were intended to reassure Trenton’s citizens, and its City Council, that the hotel’s future was a good bet, and justified the investment of millions of more public dollars to upgrade its property and stabilize its cash flow.
That hope of reassurance is going down in flames. Over the last few weeks we have read that unpaid bills left by the previous Waterford management were turning out to be much higher than publicized. One of these unpaid claims includes one made by the previous asset manager, for over $1 Million in unpaid management fees. Published reports stated the hotel’s board signed a pricy 20-year (!) contract extension for water to service its cooling system, a pretty dubious decision for a financially-shaky business like Lafayette Yard.
And then there was the news last week that the place is projected to lose $800,000 by the end of the year. The 5-year plan from only 6 months ago projected that operations in 2013 were to have earned a profit of $293, 209, not a $800,000 loss.
This swing in projections of nearly $1.3 Million since February – absolutely huge for a place that was projected to earn only $5.7 Million in revenue for all of 2013 – may be a mortal blow to the future of the place, along with the other stories of misfortune. This week, the hotel’s governing body is meeting to address the rapid financial deterioration of Lafayette Yard, and to discuss any actions it can take to reduce its many woes.
Such action may reportedly include a discussion of a property sale or filing for bankruptcy.
Whatever action the Board takes this week, the news of the last several weeks provides a very, very strong sense that the Hotel, under present municipal ownership can just no longer be considered a going concern.
I have to wonder the same for the City of Trenton.
Last month, the Mercer County Prosecutor’s Office and the Trenton Police Department announced that the city’s police vice unit would be merged with the County’s Special Investigations Unit, to be managed by the Prosecutor’s Office.
Last week, Governor Christie raised the question as to whether the rest of the city’s Police Department should be absorbed into a new Mercer County service, in the manner of the new Camden County department that replaced Camden City’s this year.
There are a whole bunch of issues that come up in the context of that suggestion, that I won’t get into today. I mention it only to provide an example of actions and proposals that I believe should beg the question of whether there is a future for a viable, autonomous future for the City of Trenton as it exists today? Can Trenton, today, be considered a going concern? Or should we start to consider alternatives?
It’s clear the City of Trenton does not control its own fate. Years before the current Administration took office, forces were at work that were dooming this town’s future. The collapse of the town’s industrial base saw a huge share of its tax ratables disappear, leaving obsolete and crumbling industrial properties around town, with no replacements other than an increased non-profit, non-taxable presence by state, county and federal governments, schools, hospitals and churches. By 2013, well over one-half of Trenton’s total property by value is exempt from property tax. For decades, Trenton has been unable to pay for itself.
For most of those same years, most of the financial gap created by the loss of industry was covered by subsidies by the State of New Jersey. The current Administration of Governor Christie reversed that practice, and directly created the budget shortfalls that have been the immediate cause of the city’s financial crisis that led to the austerity in the City’s budget that forced the massive layoffs, including those among police officers.
Might this austerity be reversed in the future by a new, more generous governor? Perhaps. But even were that to happen, the City has now been shown to be extremely vulnerable to the swings of capricious State fiscal fashion. If the (relatively) good times of state aid return, so may the (absolutely definite) bad times.
Will the current disaster of a City Administration be replaced next year by a new, talented and competent one? Perhaps. But even an extremely dedicated and effective mayor and cabinet will, as explained above, be fatally limited in its ability to control its own future.
In short, given Trenton’s current situation and its prospects, is there a future for Trenton?
I don’t know. I really don’t. What, then, is the solution?
Perhaps a merger with a neighboring town such as, for instance, Hamilton, into a greater Trenton?
Or, a split of the town’s 4 Wards among Hamilton, Ewing and Lawrence? Three years ago, local publican John McManimon suggested this as a solution, complete with a “Vatican City-style” district that would include the State Capital building and nearby areas., to be administered by the State of New Jersey directly.
Or maybe current trends will continue, and piece by piece the traditional functions of Trenton’s municipal government get divvied up one by one. This year, the Police Department is in play for pickup by Mercer County. Next year, who knows, it’s the Fire Department’s turn. The year after that, Public Works and the Water Works becomes a regional authority. Maybe Trenton’s School District is parceled out, or becomes an agency of New Jersey.
I don’t know which way things will play out, or more important, how they should play out.
And, frankly, neither do you.
But, as we are seeing with the Police Department, these questions are being asked, and Trenton’s civic assets are in play. Right now, the players are in the State and County governments, working along with what passes for the pitifully weak and perpetually confused and witless Trenton Administration.
Trenton’s citizens have not been part of this conversation yet.
Trenton’s City Council has really not yet been part of this conversation, yet.
Those who would present themselves as the city’s next elected leaders have not been part of this conversation, yet.
I think it is high time to change that. If the Hotel Board is reportedly facing up to the prospects of the hotel by considering options up to and including bankruptcy, it’s time for the broader issues of the City as a whole to be addressed.
If I may be so bold, I’ll start.
So, I don’t think that Trenton as it currently exists has a future. For many years, it has not been a going concern, and probably will never be, in its current form.
I think the City of Trenton should be dissolved, and its wards assigned to merge with the surrounding townships. I’d like to look into the pros and cons of such a plan; how the numbers stack up; and whether and how the re-constitution of the newly-defined townships would better serve all the citizens within their borders better than they are being served now. Mine is a vote for John McManimon’s plan./
What do you think? Do you have a better idea?
Let’s work on it.