The City Council has put the brakes on a plan to borrow $2.1 million to build a parking lot on private land with a developer who owes the city more than $400,000 in back property taxes.
"This is a very big issue for me with the borrowing," Council Chairman Charles Walker said after Monday's meeting of the Council. "If the city is going to borrow that kind of money, it should be a taxpayer benefit, not a developer who's behind on his taxes and things of that nature."
Council members said they want the former Occidental Chemical Building and failed AquaFalls site, known locally as "the hole," to be filled in and improved.
However, they question the legality of a plan by the Anello administration to enter a public-private partnership with developer and owner Frank Parlato Jr. to demolish the building and build a surface parking lot with city funds.
"I wanted to know if it was legal," Councilman Lewis Rotella said. "For two years, I've been trying to get that hole filled. So when I first heard about the plan, I was excited. But I can't jump into these situations anymore."
Parlato has said that the parking fees would pay the city back and that a mortgage would secure payment for the city. He said the city also would receive 15 percent of parking revenues.
Rotella said he would not feel good about lending such a large amount of money to a private developer unless there are certain guarantees or the city ends up owning the land.
That was why he removed his resolution from Monday's agenda, he said, to encourage the city to negotiate such a deal. Council members said the Anello administration does not need a resolution to negotiate with developers, just approval for contracts.
A second item on Monday's agenda would have authorized the city to borrow $2.1 million for the project. That was removed from the agenda, as well, and created some confusion. It was printed as being sponsored by Walker, but he said that he never saw the document and that the city Law Department told him that it was a mistake.
"[Mayor Vince Anello] came to present [the idea] to the Council. This was something he was doing," Walker said. "The next thing I saw was my name was on it . . . I had never seen the document."
Anello said he did not know the source of the resolution.
"They were both Council resolutions," he said. "I had discussed the parameters of what we're looking for and will continue to work toward Parlato's attorneys' meeting with our attorneys."
Councilman Sam Fruscione said that regardless of who put the resolution on the agenda, it did not belong there. "Why are we financing this if we haven't approved the deal yet?" he said.
Eight months ago, the city was pursuing alleged ordinance violations by Parlato related to food and souvenir stands along his property, as well as an illegal parking lot. Council members complained about street vendors on his property operating out of makeshift tents. Now they are worried about the more than $400,000 Parlato owes in back taxes and question whether a parking lot is the right project for such prime land.
However, Council members did not count out the deal entirely and want the Anello administration to come back with a full proposal after city attorneys ensure that it is legal. They also want more time to ask questions and digest the ramifications if there were to be a partnership.
Since taking over the building in November 2004 with partner G. Steven Pigeon, Parlato has said he wanted it to become a tourist center. The underground aquarium site in front of the building is not completely filled, and the 150,000-square-foot building has no tenants.
"Everyone wants to see the hole filled," said Councilman Chris A. Robins. "But we don't want to get involved in an agreement we'll regret."
If the building is demolished, its $4.7 million assessed value would be removed from city tax rolls.