Cimino: $4.5 Million Disappeared in RiverWinds Golf and Tennis Project
There's no accounting for nearly half of a nearly $10 million loan, according to the township's counsel for redevelopment.
More than $4 million from the RiverWinds Golf and Tennis Center project went missing at some point during construction, and the bankruptcy of former redeveloper Namwest left West Deptford taxpayers on the hook for the entirety of a nearly $10 million loan, redevelopment counsel Mark Cimino revealed Thursday night.
Closing documents obtained by Cimino showed the golf course and tennis center were to be built for a total of $5.4 million, but there’s no accounting for where the balance of the loan, somewhat more than $4.5 million, went at this point, Cimino said.
“We’re going to get to the bottom of that,” Cimino said. “I would be remiss if I didn’t dig deeper…unfortunately, the township is now on the hook for the $9.945 million.”
The money could have gone almost anywhere, Cimino said—he referenced the common problem of cost overruns—and said he’s hoping to find at least some of the lost millions by checking through progress payments from the bank.
“They don’t give you all the money at once,” he said.
In the meantime, Cimino said, the loan balance has cost taxpayers about $3 million since 2008, thanks to a lack of principal payments before Namwest’s bankruptcy.
Exacerbating those issues is the deal West Deptford’s previous Democratic administration made with Ron Jaworski Golf Management, Cimino said, citing potential problems with the long-term lease that started in September 2010.
One of the biggest is the value of the property—while the contracts originally show the golf course cost $2.9 million, and appraisals pegged it as being worth as much as $2.5 million, Cimino said, the lease was for $2.1 million with a $1 buyout clause.
That falls into something of a legal gray area, Cimino said, citing a state Supreme Court ruling that spoke to protecting the value of public resources, like the RiverWinds golf course.
“You just can’t give away property to get an increased tax revenue,” Cimino said.
Some of the question of the value comes in what the township was able to make in profits while West Deptford was running the course, which Cimino said were between $79,000 and $157,000. That makes the buyout clause questionable, he said.
The buyout clause hasn’t been activated, though, and the township—as confirmed by tax records—still owns the property.
There isn’t much incentive for Jaworski to plunk down that dollar and take ownership of the course, Cimino said.
Because the township still owns the land, he’s able to get a liquor license for a roving beverage cart, Cimino said. If Jaworski took ownership, that license would disappear, and he’d have to try to buy his own license.
There’s also a serious issue with a Payments In Lieu of Taxes (PILOT) program agreed to and being paid on right now, Cimino said—it doesn’t actually exist. The township committee never formally adopted the PILOT program, he said.
“In all fairness, the lease…talks about a PILOT being entered,” Cimino said. “The details of that have never been completed.”
The schedule of payments ramps up from $42,000 to $63,531 per year over a fifteen-year, as outlined in the 90-year lease, but Cimino said the full-value taxes would be around $386,000. Technically, in the absence of a PILOT agreement, that full tax bill applies, Cimino said.
All of that adds up to a need to completely review both the appraisals and the deal with Jaworski to make sure the township’s getting as much as possible out of the golf course, Cimino said.
“We need to negotiate both the purchase price and the PILOT,” he said. “We’re going to try to get the best deal we can.”