Norristown, the poor county seat of one of the richest
counties in Pennsylvania, has struggled to attract businesses to revitalize its
Main Street.
In an effort to do just that, Municipal Council Member
Marlon Millner believes the city may be picking bad investments — and leaving
money on the table.
In 2012, developer Michael Alhadad of Ambler bought a
historic PNC Bank building at 9 W. Main Street, and turned the top floors into
condos. When Alhadad needed a first floor business tenant, local soul food
restaurant Diva's Kitchen was tapped to move in.
Fixing up the space was going to be a big job, so Alhadad
asked for help. To sweeten the pot for a developer who was spending millions on
a marquee property, Norristown's borough council voted to spend $250,000 in
federal economic development funds, called Community Development Block Grant (CDBG),
on the build out.
With all of that public money going towards one space,
Millner requested business privilege tax records for the restaurant.
"It seems to me, there's something to be learned
from who's above average, who's below average" in the amount of revenue
they bring in, said Millner. The city's business privilege tax is based on the
amount of revenue a business brings in every year, $1 for every $1,000.
After four months of waiting, the councilman got a
response.
Diva's Kitchen filed taxes under the name of the owner's
spouse, and "there is no record of payment for the business privilege
license fee or business privilege taxes" by the restaurant, according to
the emails provided to Millner by Norristown administrators.
Not only that, but records for many area businesses were
missing. Of 50 non-franchise business records pulled from 2012, 2013 and 2014
by finance director Chenora Burkett, only 30 reported gross revenue under the
entity name, according to emails exchanged between Burkett and Millner. In the
spreadsheet shared with NewsWorks, many restaurants' reportings were simply
left blank.
Without that information on Diva's Kitchen, "my
contention is that we picked a very poor business to invest in," said
Millner, who was the only member of town council to vote against the CDBG
grant.
Owner of Diva's Kitchen, Temeka Murray, insists she's
been paying her taxes. "I have all of my paperwork. All of it," she
said. She said the developer reviewed her financial records before the two
decided to partner. Murray had been operating Diva's at a location on West
Johnson Highway, before closing earlier this year in anticipation of the move
to Main Street.
She's also frustrated by how much attention the project
has received.
"[The CDBG money] is not going into my pocket, so
nobody should be digging into my business," she said.
Municipal administrator Crandall Jones said
record-keeping hasn't been perfect, but that Norristown isn't alone in that.
"It's not about trying to get Diva's in
particular," he said. "The system needs fixing but that's not
necessarily a Norristown issue," referencing a possible reporting lag from
third party tax collecter Berkheimer. A spokesman from Berkheimer said they
can't disclose information about a particular payee, but that Norristown
officials receive reports on collections every month.
Now, with a list in hand of those who may not be paying
taxes, "We will pursue collecting just as every municipality pursues
delinquent taxes — if they are delinquent," said Jones.
As for whether these taxes should be a factor in giving
out economic development grants, Jones said it's secondary to attracting
investment in Norristown.
"It's about partnering with a developer who is
actively interested in investing in Norristown," he said. The PNC
building's owners are reported to be investing $3 million on revamping the
historic building.
"At the end of the day, even if it didn't work, we
still have a viable property that another place, another restaurant can come
into," said Jones.
Source: Newsworks
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