“Railroad” Co. Trucks Fire Debris

by Paul Bass | January 3, 2008 5:28 PM | | Comments (11)

fire%20debris%201.jpgWho’s trucking out debris from the downtown fire for the city? A “railroad” company, among others.

A. Anastasio & Sons Trucking Company is one of five subcontractors piling debris from the fire-ravaged Kresge building onto trucks and driving it to landfills in Ohio and Pennsylvania, Livable City Initiative (LCI) chief Andy Rizzo said Thursday. LCI hired Laydon Construction to oversee demolition of the downtown building in the wake of a three-alarm fire on Dec. 12. Laydon hires the subcontractors.

“They’re a trucking company,” Rizzo said of Anastasio. “They do a lot of trucking.”

fire%20debris%202.jpgTo another department of city government, though, the firm isn’t a “trucking” company. It’s a “railroad company.” One worthy of a $480,000 tax break.

That other department is the corporation counsel’s office. It convinced a government committee this week to approve a legal settlement that exempts three Anastasio family-owned enterprises from property taxes under a law covering business that “operate exclusively for railroad uses.” (Click here and here for stories about that settlement.)

John Ward, the city’s corporation counsel, explained the difference Thursday.

Ward didn’t pretend that, say, the trucking company is using railroads to transfer debris to Ohio. (It’s not.) Instead, Ward said, the question is about definitions in law.

The property in question is on Middletown Avenue. The Anastasios run three businesses on the property: the trucking company; Circle of Life LLC, a waste transfer station, which moves solid waste to the Midwest on railroad cars; and Nicesca LLC, a real estate company. The politically connected family rents the property from CSX Railroad.

For the past few years it has appealed a city tax bill that has grown to $480,000. It cited Sec 12-255 of the Connecticut statues, which holds that railroads, which pay gross receipts to the state and federal government, cannot be taxed by the city as long as the business is being used exclusively for railroad purposes.

The city’s litigation settlement committee was poised to settle with the family and grant the appeal until Hill Alderman Jorge Perez raised questions. So Ward’s office did a legal study. After that study, it reported back that the law is clear, and thus the committee approved the settlement.

john%20ward%20photo.jpg“I am 100 percent sure that we got this one completely right. I have no doubt that we nailed this one spot on,” Ward (pictured) said Thursday. “They are purely a railroad company” according to the law, which has been repeatedly tested in the court.

“It is surprising to see what a ‘railroad’ is,” Ward noted. “You will be amazed at what a ‘railroad’ is.”

Ward said repeated test cases have allowed railroad companies a broad definition of what constitutes “railroad” uses when they lease property. One of those test cases took place in New Haven, involving a company by a pier that exclusively shipped products by water, not rail, he said.

The city did find a few cases that appeared to go the other way, but they didn’t involve taxes, and they were overturned on appeal, Ward said. He said he can’t release the specifics of the city’s research until the legal settlement in the case is completed.

The tax bills for the Middletown Avenue property go to CSX, not Anastasio, said Ward. And CSX has been paying taxes — not to the city, but to the state. The law requires railroad companies to pay gross receipts taxes to the state, then exempts them from local property taxes.

According to Carl Amento, a city lawyer who did the research for the settlement, CSX has paid in the neighborhood of $70,000 a year in the gross receipts tax. He said that’s roughly what it would be paying the city in property taxes instead if not for the law.

“It’s all part of the federal-state-local [tax] system,” said Amento, who before joining the city corporation counsel office served as mayor of Hamden. “Does it always work out for the local municipalities? As a former mayor, [I’d say] no.”

At Wednesday night’s meeting Alderman Perez made it clear he thinks the settlement decision “sucks.” But he is constrained from commenting on specifics pending completion of the settlement.








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Posted by: Your tax dollars at work | January 3, 2008 6:04 PM

(1) It's certainly possible to work for change in the unfair law granting total exemption to "railroad" properties. Where are our legislators on this issue?
(2) If the Anastasios don't pay taxes, why hire them? Isn't this a "no bid" job? Lots of contractors would take it on.
(3) Why is the City doing a total demolition? It's understandable the city would want to make the property "safe." But does that mean the City must demolish all existing structures?
(4) Will the City ever be paid back for this extensive work on the owner's property, basically for the owner's benefit? Consider the World Trade Center -- litigation with the insurance companies is ongoing still. In a "total loss" situation, insurance companies never just pay. There is usally substantial disagreement over extent of loss and coverage all of which must be settled by years of extremely costly litigation! In the end, the taxpayers will bear a major portion of the demolition cost and legal fees.

Posted by: Tdinnean | January 3, 2008 7:56 PM

John Ward, you know me and you are not telling the truth. You should be ashamed

Posted by: over and over | January 3, 2008 10:48 PM

Your tax dollars at work,
It been said over and over and over that the city is placing a lean on the property to pay for the demolition.
http://www.nhregister.com/WebApp/appmanager/JRC/BigDaily_nfpb=true&_pageLabel=pg_article&r21.content=%2FMAIN_REP%2FArticle%2F2007%2F12%2F28%2F1335913

The city is doing a total demolition because the buildings are burnt out, unstable, and contaminated by asbestos. In addition obviously it's a chance to get rid of what might be the least desirable and most run down property in the downtown area. It's a great opportunity to continue the downtown revitalization. Don't forget this block is boarded by the new GCC and Shartenburg sites.

Posted by: Your tax dollars at work | January 4, 2008 9:57 AM

Over & Over,

The City has a perfect right to place liens. Whether the City's action will be enforced in court and whether the owner's insurance will compensate are the real issues here. The City should do only that which is necessary to abate the nuisances - both environmental and safety -- after it has given the owner a reasonable chance to do the work.

Maybe destroying everything on the property is necessary to protect the public but if I read the stories correctly, the City's claim is the properties are sub-standard for the "new" New Haven and so should be eliminated. Over the last 60 years we've heard similar arguments (Chapel Mall, the Route 34 non-connector, the Coliseum, Macy's & Malleys --). The only beneficiaries from all this wasting of taxpayer dollars have been the conntractors and developers. The taxpayers have always footed the bills. So "It's deja vu all over again,' folks.


P.S. In this case the bills will be paid to a contractor who has consistently used a legal loophole to avoid paying taxes. So the subsidiary issue is should the City be giving economic benefits to a company that avoids the responsibility of good corporate citizenship? Why?

Posted by: Gary Doyens | January 4, 2008 11:10 AM

"I am 100 percent sure that we got this one completely right. I have no doubt that we nailed this one spot on," Ward said Thursday. "They are purely a railroad company" according to the law, which has been repeatedly tested in the court.

The law, Mr. Ward, is rarely that clear or the outcomes that certain. This is a case that needed airing in court in part because of the political contributions and influence, in part because of the size of the money in dispute and the on-going revenue implications of caving without at least fighting for revenue our tax assessor feels the city is entitled to collect.

CSX may be filing revenue reports with the state, and paying taxes based on gross receipts. But the appeal on the tax issue was not made by CSX, it was made by the Anastasios who are using the fig leaf of CSX as cover to avoid property taxes. While I am sure there is case law to support their position, I'm equally sure, there is likely to be case law and legitimate reasoning to decide the case in favor of the city. The Anastasios are fighting hard because there is probably a clause in their lease that stipulates they pay any property tax that may be assessed because of their non-railroad activities. CSX likely suspected the fig leaf could wilt exposing the ugly truth of $3 million in property value at an even uglier mil rate and an annual cost of about $125K.

So, in a matter of three weeks, Ward and the corporation council's office lost New Haven taxpayers $1 MILLION dollars - $480,000 for the Anastasios, and another half million for age discrimination. At this rate, I would suggest we shutter the entire department, save all the payroll and benefits and outsource our legal needs to a quality law firm interested in fighting for the city of New Haven. We were promised this department was fixed when the last corporation council fled town. Clearly that is not the case.

In the meantime, the city should not be doing business with a company who refuses to pay its fair share, forcing the rest of us to bear that burden, especially in a no-bid contract. Property taxpayers foot an enormous bill for services and benefits for those who cannot afford it. Must we also pay for the well heeled and well connected too?


Posted by: WEBbloger 1 | January 4, 2008 3:12 PM

So Ward you're telling us that your 100 % sure Huh?
Well DUH.. Im not!

"I am 100 percent sure that we got this one completely right. I have no doubt that we nailed this one spot on," Ward (pictured) said Thursday. "They are purely a railroad company" according to the law, which has been repeatedly tested in the court.


The statue reads as follows:

Railroad Company tax:

Sec. 12-255. Tax to be in lieu of certain other taxes. The tax provided for in this chapter upon the gross earnings of each corporation included in section 12-249 shall be in lieu of all other taxes in this state for the year ended the thirty-first day of December of the year for which such statement is required to be made on its rights, franchises, funded and floating debt and property in this state, and on the property of each corporation, which property is operated in this state by any such corporation so liable to such tax upon gross earnings, but the real estate in this state owned by such corporation, or by a corporation whose property is operated by it, when not used exclusively for railroad purposes, shall be assessed and taxed where it is located.

(1949 Rev., S. 1933; 1961, P.A. 517, S. 118; P.A. 85-562, S. 2; P.A. 87-124, S. 3, 18.)

History: 1961 act deleted exemption of stockholders and bondholders from taxation; P.A. 85-562 added Subsecs. (b), (c) and (d) concerning administration and enforcement of the tax, which administrative and enforcement provisions are similar in most aspects to those applicable with respect to other state taxes; P.A. 87-124 deleted Subsecs. (b) to (d), inclusive, concerning determination of the amount of tax by the commissioner, effective January 1, 1988, and applicable with respect to the tax imposed under chapter 210 on gross earnings in the calendar year ending December 31, 1987, and in each calendar year thereafter.

Sec. 12-249. Tax on gross earnings. Each corporation operating a railroad, and carrying on business for profit in this state, shall, on or before July first, annually, pay a tax computed upon its gross earnings from all sources from operations in this state; gross earnings being all receipts classified as railway operating revenues by the Interstate Commerce Commission or its successor agency in the classification of accounts prescribed by said commission. No deduction shall be made from such gross earnings for any commission, rebate or other payment, except a refund resulting from an error or overcharge.

(1949 Rev., S. 1927; P.A. 87-124, S. 1, 18; P.A. 96-222, S. 6, 41.)

History: P.A. 87-124 specified that payments be made on or before July first, effective January 1, 1988, and applicable with respect to the tax imposed under chapter 210 on gross earnings in the calendar year ending December 31, 1987, and in each calendar year thereafter; P.A. 96-222 inserted "or its successor agency" after "Interstate Commerce Commission", effective July 1, 1996.

The question for you Ward is why, if CSX owns the property and pays taxes to the State of CT; Why is it that CSX is not filing the appeal.

If Anastasios only lease's the property, why is Anastasios filling the appeal???...and
why are they not paying the taxes ...DUH...

According to the SEC. of State Office:


BUSINESS DETAILS:
Business Name: Business ID: Business Address:
CIRCLE OF LIFE, LLC 0517149 80 MIDDLETOWN AVENUE, NEW HAVEN, CT, 06513
Mailing Address: Citizenship/State Inc: Last Report Year:
80 MIDDLETOWN AVENUE, NEW HAVEN, CT, 06513 Domestic/CT 2007
Business Type: Business Status: Date Inc./Register:
Domestic Limited Liability Company Active Jun 16, 1995

PRINCIPALS:
Name/Title: Business Address: Residence Address:
ANDY ANASTASIO
MEMBER NONE 80 MIDDLETOWN AVE, NEW HAVEN, CT, 06513

BUSINESS SUMMARY:
Agent Name: Agent Business Address: Agent Residence Address:
ANDREW F. ANASTASIO, JR. AKA FELICE ANDREW ANASTASIO, JR. 80 MIDDLETOWN AVENUE, NEW HAVEN, CT, 06513 12 PLEASANT DRIVE, NORTH HAVEN, CT, 06473

BUSINESS DETAILS:
Business Name: Business ID: Business Address:
NICESCA, LLC 0517148 80 MIDDLETOWN AVENUE, NEW HAVEN, CT, 06513
Mailing Address: Citizenship/State Inc: Last Report Year:
80 MIDDLETOWN AVENUE, NEW HAVEN, CT, 06513 Domestic/CT 2007
Business Type: Business Status: Date Inc./Register:
Domestic Limited Liability Company Active Jun 16, 1995

PRINCIPALS:
Name/Title: Business Address: Residence Address:
ANDREW ARASTASIO
MANAGER NONE 80 MIDDLETOWN AVE, NEW HAVEN, CT, 06513

BUSINESS SUMMARY:
Agent Name: Agent Business Address: Agent Residence Address:
ANDREW F. ANASTASIO, JR. AKA FELICE ANDREW ANASTASIO, JR. 80 MIDDLETOWN AVENUE, NEW HAVEN, CT, 06513 12 PLEASANT DRIVE, NORTH HAVEN, CT, 06473


BUSINESS DETAILS:
Business Name: Business ID: Business Address:
A. ANASTASIO & SONS TRUCKING COMPANY, INC. 0106604 80 MIDDLE TOWN AVE., NEW HAVEN, CT, 06513
Mailing Address: Citizenship/State Inc: Last Report Year:
80 MIDDLE TOWN AVE., NEW HAVEN, CT, 06513 Domestic/CT 2007
Business Type: Business Status: Date Inc./Register:
Stock Active Jun 17, 1980

PRINCIPALS:
Name/Title: Business Address: Residence Address:
FELIX ANDREW ANASTASIO
PRESIDENT 80 MIDDLETOWN AVENUE, NEW HAVEN, CT, 06513 160 SOUTH END ROAD, EAST HAVEN, CT, 06312
BARBARA A. ANASTASIO
SECRETARY 80 MIDDLETOWN AVENUE, NEW HAVEN, CT, 06513 160 SOUTH END ROAD, EAST HAVEN, CT, 06312
FELIX ANDREW ANASTASIO JR.
VICE PRESIDENT 80 MIDDLETOWN AVENUE, NEW HAVEN, CT, 06513 12 PLEASANT DR., NORTH HAVEN, CT, 06473

BUSINESS SUMMARY:
Agent Name: Agent Business Address: Agent Residence Address:
JOHN E FAY 663 MAPLE AVE, HARTFORD, CT, 06114 LITCHFIELD LANE, NEW HARTFORD, CT, 06057

Accordng to the Sec. of St. office, Anastasios trucking Company is a registered as a STOCK Business type.

http://www.concord-sots.ct.gov/CONCORD/

Posted by: Harvey [TypeKey Profile Page] | January 4, 2008 3:46 PM

Gary Doyens remarks are well taken & make total sence.

Posted by: Tim Kane | January 4, 2008 5:20 PM

So. Now there are railroad tracks leading from the banks of the Quinnipiac River up Chapel Street?

Posted by: over and over | January 4, 2008 5:36 PM

Your tax dollars at work
there is no tax payer money involved in this demo that all im saying.

Posted by: john j | January 6, 2008 10:04 PM

This whole thing stinks. How can we the average citizen fight back?

And who are these Anastasios in bed with re politics? (Some of us are newer to the scene.)

At the very least it seems we should not be using them to clean up Chapel street until they stop ripping off the city with nasty loopholes that shouldn't hold up in court!


Posted by: Not neccessarily True | January 7, 2008 11:40 AM

Over and Over,
Right now this IS your tax dollars as the city only has a lien on the property to reimburse your tax dollars that are being spent.
If the city has made mistakes here, as it may seem by reading some of the other articles about the property on NHI, we may all have to eat this mayor's mistakes.
Who do you think is going to pay for the Concord 9 demolition? There was a mistake made by the City's no bid contractor right?
Who do you think will pay for the Kresge demolition if it is deemed excessive or premature?
Who will be sued if the firefighters decide they should have been equipped with respirators that would prevent asbestiosis?
I completely agree with Gary, but think he's being
conservative with his estimate of how much of our money was pissed away this month.

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