More Hotel Mishigas

The Trentonian takes us on a tour of the recent past this morning. An article by David Foster revisits the financial transaction in 2009 in which the Lafayette Yard Community Development Corporation (LYCDC), the Board overseeing the operations of the Lafayette Yard (née the Trenton Marriott) Hotel, $500,000 from the City of Trenton that was not authorized by City Council.

There is a lot of finger pointing in the article. Former Trenton Business Administrator Dennis Gonzalez, wearing another hat as Chair of the LYCDC, got the payment processed through the City. He claims he did so under the advice of city and hotel bond Counsel Edward McManimon. McManinon disagrees with that interpretation.

For his part, former Trenton mayor and godfather to the Hotel Doug Palmer is quoted in the article as saying, “They (LYCDC) had their own board. I didn’t get involved with the LYCDC.”

Presumably he said this with a straight face, even though Mr. Foster is silent on this matter. Palmer’s comment is pretty hard to believe, since he appointed every member of the LYCDC Board, and his own Business Administrator was the Chair.

Anyway, the article today describes a lot of water under the bridge. That $500K, like so much other money spent on the hotel before and after, has gone to Money Heaven, never to be seen again. The article is an entertaining read.

My point today is that not a small portion of responsibility and blame for the sad history of the hotel lies in the closely-held, secretive and inbred management structure of the LYCDC and how it interfaced with – or rather, through most of its history, failed to interface – Trenton’s City Council as well as the State of New Jersey.

A good deal of effort is going into an attempt to restructure this relationship with the Council and the State. I am aware of some of the discussions going on, and of some of the plans to make the affairs of LYCDC more transparent and accountable to the citizens of the City and State who have underwritten and subsidized the hotel since Day 1.

I think today’s story should serve as an instructive lesson to avoid future entanglements and conflicts of interest such as we’ve seen in the past.

One immediate case in point is the current Chair of the LYCDC, Joyce Kersey. Now, I don’t mean to impugn anything about Ms. Kersey personally or professionally. I simply wish to point out that, in addition to her service as Chair of the Hotel’s Board, Ms. Kersey is a member of the Trenton Parking Authority, having been appointed to a term that expires 6-30-2016.

The Parking Authority is a creditor to the Hotel, in the amount of $7,396,259. To me, this suggests that there may be a hypothetical occasion in the future where it may be in the best interests of the Trenton Parking Authority to seek  collection of that debt from the Hotel, in order for the Parking Authority to serve the greater public good as they are charged to.

At the same time, it might not be in the best immediate interest of the Hotel to pay that debt, if they are as cash-strapped in the future as they have been throughout their entire history.

In this hypothetical, what does Ms. Kersey do? Whose interests does she represent, in this case? Does she demand payment in her role as Parking Authority member? Does she refuse, in her capacity as LYCDC member? Or does she recuse herself from any consideration of the matter on both boards?

You see the dilemma.

We read this morning about a serious $500,000 blunder (or worse), occasioned in part by the conflict of interest created by the Chair of the LYCDC in 2009 also being the City of Trenton’s Business Administrator. As maddening as it is to read, we can’t do much about that, four years on.

But we certainly can and should seek to minimize any new future blunders – or worse – by eliminating any potential conflicts of interest as they exist now.

For now, that means respectfully asking Ms. Kersey to reassess her membership of both bodies, and resigning from one of them.