(The following story by Paul Bass appeared on the New Haven Independent website on November 30.)
NEW HAVEN, Conn. — 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 issue 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.