New Haven Independent

Railroad’s “Refund” Hits A Bump

by Paul Bass | November 30, 2008 1:26 PM | Permalink | Comments (13)

Alderman Moti Sandman wants a second opinion before handing over $184,761 in city money to a politically connected trucking company that calls itself a “railroad.”

Sandman chairs the Board of Aldermen’s Tax Abatement Committee, which holds a hearing next Thursday on a request from the tax collector to refund back taxes to CSX Transportation.

Sandman said he plans to ask his committee to approve a formal request to hire a lawyer to advise on whether to give the refund or fight it in court.

Especially in tough economic times, “I’d like to make sure we’re doing the right thing before we give them the money,” Sandman said.

The refund is for property on Middletown Avenue. It’s part of three CSX parcels leased by the Anastasio family. The Anastasios run three businesses there: Circle of Life LLC, a transfer station that sends solid waste to the Midwest by rail; Nicesca LLC, a real estate company; and A. Anastasio & Sons Trucking Company.

The Anastasios handled an appeal of taxes on those properties. The family is well-known around the city, with a track record of supporting elected officials’ campaigns, including the mayor’s gubernatorial bid. They claimed the property fall under a state tax exception for property used “exclusively” as a railroad, as spelled out in Sec 12-255 of the Connecticut statues. They wanted the city to return a total of $480,903 in back taxes paid on the properties.

The DeStefano administration struck a settlement to do that; it lobbied hard to get the city’s Litigation Settlement Committee to approve the settlement, which it did in February.

At the time, committee member Jorge Perez questioned the settlement — since the property is hardly used exclusively as a railroad. For example, last January Anastasio was trucking debris from a no-bid city demolition job at the site of a Chapel Street fire. “They’re a trucking company,” a city official explained at the time.

But under the law, city lawyers argue, the properties in question house a “railroad” company. Corporation Counsel John Ward said that case law has repeatedly offered companies wide latitude in defining themselves as “exclusively” railroads. Click here to read about that. Alderman Perez countered that other case law supports the common-sense position that trucking companies aren’t railroads. He argued that the city should fight in court not just to avoid paying $480,000 in refunds for back taxes paid, but to collect future taxes on the properties, too.

Enter Moti Sandman and next week’s hearing. Sandman’s committee received a request from Tax Collector C. J. Cuticello for formal approval to refund $184,761.14 of the back taxes paid since 2003 on the properties.

“It really comes down to: Are they a ‘railroad company’?” Sandman said. “I don’t know.

“It seems to me there’s enough incentive and there’s enough case law that it’s worth another look.”

Board of Alderman President Carl Goldfield agreed. If Sandman’s committee votes to request another legal opinion, Goldfield has to sign off on it. He said he will.

“I don’t want anyone saying somebody got a sweetheart deal,” Goldfield said. “especially now. We’re hurting for money. We’ve got to be aggressive. We’ve been aggressive in our collection efforts. People who are claiming some kind of exemption should be scrutinized” too.

It wasn’t clear why Thursday’s vote concerns only part of the total $480,000. Cuticello, Ward, and the Anastasio’s lawyer, Jeffrey M. Sachs, all said last week they weren’t sure.

At this point approving the issuance of the checks is just a formality, Sachs said. “The case was settled. They just never issued the refund.” Cuticello said he wasn’t sure whether the matter really needs to go before Sandman’s committee, since it involves a settlement the city already entered into.

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Comments

Posted by: Chris O | November 28, 2008 2:24 PM

Who will be next in line to be a railroad company? Half the port area of New Haven could qualify. Are the lumber and scrap yard in North Haven exempt from North Haven taxes or does New Haven just have special rules? Its bad enough the citizens of New Haven bear the environmental burden of these businesses but that they don't pay taxes - that's just obscene.

Posted by: cedarhillresident | November 28, 2008 3:32 PM

I live a few feet from the tracks.... I am putting a station sign on my front porch and I was tax relief! We should fought it! They said it would cost to much to fight it that was only reason we setteled! that the jobs lost if this company leaves would hurt the city??? Not so sure of that. I say fight it! It should of been fought last year! Stop the crap what rails are used and how often?? That should be the question! Not that the person the owns the land is a rail company. The people that lease it are NOT! They should not get any credit! The land is not being used for it!

We should be revitalize mass transit on the industrial level (with these yard and the harbor) and we are wasting those pretty brown fields of Cedar Hill, as tax shelters!

Posted by: DEZ | November 28, 2008 7:40 PM

You go, Moti Sandman!

"I don't want anyone saying somebody got a sweetheart deal," Goldfield said.

Well then, get in your vehicle and visit the Anastasio businesses. The trucking and real estate businesses most certainly are NOT railroad related, and at last look, fronted on Middletown Ave at Front St, Where are the box cars in that? I don't see related tracks or an engine for that matter. Circle of life is a trash transfer company and utilizes the railroad to cart away what is brought to the shores of the Quinnipiac River. It, too, is not a railroad company per se. New Haven needs cash, that's for sure. The Anastasio companies have politically fed at the trough for long enough. Let them pay their due like every other resident and not hide under some obscure exemption.

Posted by: Politcal Influence | November 29, 2008 7:40 AM

Do you think maybe political influence had to do with the interpretation of the statute in favor of the Anastasio family? The mayors, or should I say taxpayers lobbyist and, Chris Depino also represented,as a lobbyist, the Anastasio family interests.according to state ethics reports.Something is wrong with that picture

Posted by: robn | November 29, 2008 8:36 AM

This smacks of technicality tax evasion. Kind of like whats happenning with the bailout....big insurance companies are falling over themselves to acquire failing banks to get their paws on bailout cash. Hartford paid $10M for Sanford bank and it may yeild them $3.4B in bailout cash.

Posted by: Jonathon Hart | November 29, 2008 9:04 AM

Good for you and good for us, Moti. It's high time that somebody shed some light on these sweetheart deals that seem to be so prevalent.

Posted by: XXXX | November 29, 2008 2:30 PM

I would like to see this go to court. Are there any lawyers who could sue the city to look after taxpayers. Is it possible to sue the Alders and they have to pay the cost with there own money. Can Ward be sued. Can he be made to pay for a bad decision.

Posted by: A wise taxpayer | November 29, 2008 2:40 PM

Moti,
Obtain a legal opinion or interpretation of the statute from an attorney not doing business with the City of New Haven. Otherwise the deal was already cut among the DeStefano Administration, the City lobbyist and Anastasio. Asking current lawyers in the employment of the City or attorneys getting legal work from the city will just generate the same opinion.

Posted by: Your Tax Dollars at Work | November 30, 2008 5:15 PM

Moti for Mayor!

Posted by: cedarhillresident | December 1, 2008 9:26 AM

Your Tax Dollars at Work

Not sure if Moti would be my first pick, but if he was the only one running I would surely vote for him.

Posted by: nfjanette | December 1, 2008 12:45 PM

I would like to see this go to court.
It might cost even more than the original disputed amount in attorneys fees that won't be recovered if the city loses the case.

Posted by: At least we have a bright future | December 1, 2008 2:10 PM

I can't stand DeStefano, but at least with the young alders and a few good State Reps, we have a decent bench of future candidates - will one of them step-up?

Posted by: cedarhillresident | December 1, 2008 6:22 PM

nfjanette
That is why they settled in the first place, it would cost alot and they where not so sure they could win. But that being said, they are going to keep using this loop hole and if we can somehow zip it up now it may save the city money in the long run.

Railroad’s “Refund” Hits A Bump

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