Back in 2007 the Barrie Tilghman administration, in conjunction with Mike Dunn led Salisbury City Council, pushed through the TIF bonds for the old Salisbury Mall project and the Collector Road project / subsidy for the Aydelotte Farms subdivision. Now it's early 2008 and we've learned a few things about the old mall TIF bond.
Despite all claims to the contrary by Tilghman and her minions, the TIF bond is a subsidy. Remember back to December, 2006. Mike Dunn was expecting to receive a blanket endorsement of TIF's from attorney Keenan Rice and was shocked when Mr. Rice stated the old mall TIF was a subsidy. That's SUBSIDY NUMBER 1.
The next subsidy comes in the form of interest paid. It seems that the terms of the bond permits the developer - Salisbury Mall Associates, LLC - to use bond proceeds to pay interest on the bonds until they are able to sell some condos, some offices, some storefronts, etc. Then those folks will be paying off the bonds in the form of property taxes. REMEMBER - the old mall project will be receiving city services, but the vast majority of the property taxes paid will be used to pay off the TIF bonds. SUBSIDY NUMBER 2.
Now here's the kicker. This is what makes the old Salisbury Mall a trifecta of what's wrong with economic development subsidies. Guess who bought the bonds. No, it wasn't a bank. It wasn't some insurance company. It was ... (drumroll please) ... Salisbury Mall Associates, LLC!
That's right folks. The same people who are receiving the subsidy, while you (if you are unfortunate enough to be a Salisbury taxpayer) receive double digit tax increases, are collecting the interest from the bonds. Now follow this again, because it's too surreal:
When the condo owners, storekeepers, etc. are paying taxes, the taxes will be going to the developer. SUBSIDY NUMBER 3!
But that's not all, loyal vassals of Barrieland. One of the arguments made against the subsidy back in 2006 was that this didn't seem economically sound and that the city could end up eating the bond. We all know that these aren't general obligations, but no one from the Tilghman administration would go on the record and categorically state that this could not happen.
The response was that if the project wasn't sound then the "institutional investors" who would be buying the bonds would not buy them. Not true. We now know that it was always planned for Salisbury Mall Associates to purchase the bond. We know this because there was no prospectus / offering memorandum prepared. They knew that the project was not in shape to be offered to the public (meaning outside investors). Why was this deliberately hidden from the public?
It's another beautiful day in Barrieland.
cross posted at Delmarva Dealings
Technorati Tags: Maryland, Salisbury, politics, Salisbury politics, Barrie Tilghman, Mike Dunn, Gary Comegys
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Despite all claims to the contrary by Tilghman and her minions, the TIF bond is a subsidy. Remember back to December, 2006. Mike Dunn was expecting to receive a blanket endorsement of TIF's from attorney Keenan Rice and was shocked when Mr. Rice stated the old mall TIF was a subsidy. That's SUBSIDY NUMBER 1.
The next subsidy comes in the form of interest paid. It seems that the terms of the bond permits the developer - Salisbury Mall Associates, LLC - to use bond proceeds to pay interest on the bonds until they are able to sell some condos, some offices, some storefronts, etc. Then those folks will be paying off the bonds in the form of property taxes. REMEMBER - the old mall project will be receiving city services, but the vast majority of the property taxes paid will be used to pay off the TIF bonds. SUBSIDY NUMBER 2.
Now here's the kicker. This is what makes the old Salisbury Mall a trifecta of what's wrong with economic development subsidies. Guess who bought the bonds. No, it wasn't a bank. It wasn't some insurance company. It was ... (drumroll please) ... Salisbury Mall Associates, LLC!
That's right folks. The same people who are receiving the subsidy, while you (if you are unfortunate enough to be a Salisbury taxpayer) receive double digit tax increases, are collecting the interest from the bonds. Now follow this again, because it's too surreal:
When the condo owners, storekeepers, etc. are paying taxes, the taxes will be going to the developer. SUBSIDY NUMBER 3!
But that's not all, loyal vassals of Barrieland. One of the arguments made against the subsidy back in 2006 was that this didn't seem economically sound and that the city could end up eating the bond. We all know that these aren't general obligations, but no one from the Tilghman administration would go on the record and categorically state that this could not happen.
The response was that if the project wasn't sound then the "institutional investors" who would be buying the bonds would not buy them. Not true. We now know that it was always planned for Salisbury Mall Associates to purchase the bond. We know this because there was no prospectus / offering memorandum prepared. They knew that the project was not in shape to be offered to the public (meaning outside investors). Why was this deliberately hidden from the public?
It's another beautiful day in Barrieland.
cross posted at Delmarva Dealings
Technorati Tags: Maryland, Salisbury, politics, Salisbury politics, Barrie Tilghman, Mike Dunn, Gary Comegys
Powered by ScribeFire.
Cato:
ReplyDeleteAnd to top off this farcical charade, there's the interest rate on the TIF debt: 7.9%.
These are what's called "skunk bonds" on Wall Street, meaning junk bonds with a noticeable odor.
ReplyDeleteAnd if you recall, they got more special consideration at the last minute. It's not an actual TIF bond yet because they couldn't meet the 3 year deadline to spend the money for the specified developemnt purposes. So they get some other kind of bond now and a TIF later. In the current market, one has to ask when the property will be fully developed?
ReplyDeleteSince they didn't really issue the bonds through a normal sale process, did the City pay all those issuance costs that were mentioned when the Council approved this subsidy. Weren't those issuance fees in excess of $500,000 -- how much of that has been paid and to whom?
ReplyDeleteGreat piece of writing G.A.
ReplyDeleteSomebody hit the trifecta and it wasn't the citizens of Salisbury. So that is why when I'm at a city council meeting I have to check the bottom of my shoes because it smells like I stepped in something.
Skunk Bond's great choice of words.
I recall specifically at the Council meeting on the TIF that the question was asked "who would buy these bonds?". It was clearly stated by Natelson,Lindsey Rader or someone else that the bonds would be bought by entities that would really be "scrutinizing" the project, etc. before they bought them....nope, it was Natelson all along.
ReplyDeleteWhat a crock.
Are we City taxpayers going to sit quietly by and not put this in Barrie's face? Who's going to call the Federal regulators? Did Rader know this?
Whaaaat??? Once again, I am PI$$ED! Just read that firehouse post about the city turning down donations, and now this!
ReplyDeletePOS Mayor.
A-mous @ 8:51:
ReplyDeleteIt's actually the Alex Brown Realty bunch from Baltimore behind the curtain. They didn't want to ask for a subsidy because of their deep pockets and assets, so they got in bed with Natelson and Dzaman as front men/hustlers. Barrie and the Dream Team fell for their line and the rest is history.
And that woman attorney (Rader) knew exactly what was happening in real time you can be sure, as did the gang at the Government Office Building.
How about doing an FOIA for the records -- and I'll bet you will be told that it was done by e-mails that have been accidentally deleted and that the legal opinions are "privileged and confidential".
You can bet that Rader got a mega-sized legal fee on this deal. What about Wilber?
ReplyDeleteQuestion:
ReplyDeleteUnless that bond ordinance for the "TIF" deal allowed for this hanky panky by Barrie Tilghman, is it legally authorized?
Inquiring minds want to know.
Another question:
ReplyDeleteWhy are the citizens of Salisbury being screwed regularly by Barrie Tilghman?
Thanks for your good work GA & Joe.
An exceptional post GA, again. Why is it we continue to allow these bandits to pick our collective pockets? I certainly think we have had enough of such boondoggles from the FOB crew and its leader! And to think ,I voted for the Council President - that has to be the biggest mistake of my life thus far!!
ReplyDeleteA, Goetz
Art G.
ReplyDeleteDo uou haver one of those "I WANT MY VOTE BACK" stickers.
I see JR is back. LMAO!
ReplyDeleteGreat post. Keep it up!
ReplyDelete