It’s long been a thorn in the side of city taxpayers. The company that owns the Sibley building – the same company that owns profitable malls in the suburbs – has not paid taxes or government loans in years.
Rochwil, a subsidiary of Wilmorite, bought Sibley in the early 1990s. It was formed as a limited liability company, for reasons that are obvious today. Wilmorite simply wasn’t able to make the numbers work and the revitalization project was a failure.
Wilmorite stopped paying on its PILOT (payment in lieu of taxes) agreement with the city. It also hasn’t made payments on the loans guaranteed by city taxpayers. The total amount due to the city is now $22.3 million.
Why didn’t the city foreclose on the property and haul Wilmorite into court?
Because Wilmorite was paying the mortgage and keeping the lights on. The Sibley building is one million square feet, as big as Midtown Plaza was. Wilmorite was maintaining the property and being a good landlord. The city didn’t want that responsibility, which would have come at a cost to taxpayers.
What’s more, Wilmorite has been seeking development opportunities all this time for the property. At one point, Wilmorite wanted to put a casino at Midtown and turn Sibley into a hotel. Now, Wilmorite is on the verge of selling Sibley to a Boston company that would turn the tower into housing. That deal seems to hinge on MCC taking up the former department store. While Wilmorite hasn’t paid taxes, it hasn’t let the building rot and has likely lost a lot of money on the property.
What happens if that Boston developer buys Sibley? Will Wilmorite walk away with cash and escape paying the city any of the past due money? The amount of money owed to the city surpasses what the building is worth.
Mayor Richards said the city has a chance to recoup some of the money and could use it as leverage in negotiating the future of the property. But he’s not going to jeopardize development to get the money back.
None of this is fair to taxpayers who pay their bills. But Richards said it’s the hand the city was dealt the day the Sibley department store closed. Mayor Tom Ryan negotiated the favorable terms of the Sibley PILOT and loans with Rochwil, terms that may allow Wilmorite to escape further payments. Mayor Bill Johnson thought about taking Wilmorite to court, but thought better of it.
Now Mayor Richards is trying to put the whole thing to rest – and he views MCC as the ticket.
