Saturday, March 10, 2012

Strange Bedfellows

Is this weird, or is weird?

You can’t get much more left-wing than the Occupy movement. You can’t get much more right-wing than the Tea Party. And yet here they are making common cause in press releases two weeks apart, both condemning a sweetheart deal between the New Jersey state government and Prudential Insurance. I haven’t changed a word; both of these broadsides come exactly as they popped into my e-mail box at work.

Occupy Newark release, Feb. 15


Only one day after Occupy Newark protestors were removed from Military Park, Occupy Newark spokesperson Adam Karl today blasted a state deal to give $250 million in tax credits to a company, Prudential Insurance that made $3 billion in profit last year. The Occupy Essex and Occupy Newark groups have vowed civil disobedience to stop the Prudential deal. 

At Military Park, the site of Occupy Newark, about two dozen police officers and fire fighters disassembled what was left of the movement’s encampment yesterday. Karl said Prudential would be the target of the next occupation by his group.

“If Prudential insurance wants a posh new corporate tower in downtown Newark let them pay for it themselves” said Karl who was elected spokeperson for Occupy Essex, an affiliate of Occupy Newark that is connected to Occupy organizations in D.C., Oakland, and New York. “New Jersey taxpayer’s shouldn’t be asked to subsidize successful billion dollar corporations.”

“This corporate welfare for billionaires” said Karl. “Adding insult to injury Prudential is getting tax credits reserved for companies moving from out-of-state and bring new jobs to New Jersey. Claims by Prudential that the consolidation of all their New Jersey employees in a shiny new corporate tower in downtown Newark will create 400 new are Bullshit” said Karl. ‘In fact the Pru will lose employees who don’t want to leave Morristown for downtown Newark”

“Now we know why Prudential—a hugely profitable corporation wants $250 million in tax credits they are not eligible for” said Karl “They have to make up for the giant losses they are taking on a bad real estate investment, 11 Times Square in Manhattan. More than a year after it opened, the 1.1 million square-foot building is about 60% empty and unleased. 

“Prudential is the 1% “ said Karl “This is crony capitalism at it’s worst. Karl said his group would occupy a Prudential facility but has refused to say when.” The 99% percent will make our voices heard soon,” said Karl.

“By taking tax credits they are not entitled to they are screwing the people in Newark, Camden, Jersey City, East Orange, Elizabeth, Hoboken, New Brunswick, Paterson, and Trenton who could be using these specific tax credits to bring new jobs to those cities” said Karl “The executives at Prudential are pigs at the trough.”

The tower, built by a Prudential Financial Inc.-run fund cost $950 million to build. “Prudential must pour more cash into 11 Times Square. Its $720 million construction loan, held by a group led by PNC Financial Services Group, must be repaid in May” said Karl. “ Why should New Jersey’s taxpayers bail them out?”

“Prudential says they will pay off the current loan using the fund's own capital. " said Karl ‘’Why should we provide offsets for their balance sheet?” he said. Given the building's declining value, Prudential would be able to refinance the construction loan for no more than about $600 million—leaving them a $120 million hole” Said the veteran organizer “Why should New Jersey pick up the tab? Prudential’s greed is stunning.”

Tea Party release, March 1


By Donald Hurley - Chairman

It’s not just government that needs to be drastically down-sized. Giant corporations that suck up taxpayer dollars all the while they are getting perks from their government partner–in- crime also need to be reined in and hog-tied like a calf cut loose in a rodeo.

 And there’s no bigger cash cow than the Prudential Insurance Co., which pulled in $3.5 billion in profits in 2011and has more than $870 billion in assets and now has the temerity to take $250 million in tax credits created to attract companies that bring new jobs so it can build a huge monument to itself in Newark, the city of its birth.

The suits in the corner offices may have forgotten that Prudential began as the Prudential Friendly Society in a basement office in Newark in 1875, the first company in the country to make life insurance available to working-class people, and at very low premiums. Now it is crushing the already meager city and state coffers with a greedy grab to erect a new edifice and pay as little as possible for it.

The excuse? They claim new facility will create 400 new jobs at the Rock.  Since they are doing a consolidation and closing smaller offices in New Jersey, this number is suspect. The head of Occupy Newark has called it “bullshit.”

The state solons in Trenton designed the tax credits to encourage outside companies to relocate to New Jersey and thereby provide jobs to an area that desperately needs to boost employment rates. But the state Economic Development Authority, in league with state politicos, has been crushed by “the Rock.” Why else would the EDA approve the tax credits first applied for under the Corzine administration?

Making the situation worse, Prudential is sucking up tax credits meant to bring new jobs to Newark, Camden, Jersey City, East Orange, Elizabeth, Hoboken, New Brunswick, Paterson, and Trenton. The tax credits the Pru is grabbing are reserved for companies bringing new jobs and industries to these troubled cities.

Now the New York Times tells us Prudential is underwater in a real estate investment they made in Manhattan, 11 Times Square. The skyscraper built by a Prudential Financial Inc.-run fund cost $950 million to build. Its $720 million construction loan, held by PNC Financial Services Group, must be repaid this May. The Pru can only refinance the construction loan for $600 million given the declining value of the property, That means the Pru is $120 million short-and they want us to pay for it by adding $250 to their bottom line in taxes they won’t have to pay. Bad idea.

Why Governor Chris Christie would approve these tax credits born in the Corzine administration is a mystery. Christie has battled mightily to get New Jersey’s fiscal house in order. He has fought the Democrat spenders in both the Senate and the Assembly. Only Governor Chris Christie can stop this drain of state funds by a wealthy, profitable corporation. New Jersey has no obligation to bail out the Pru. Governor Christie should tell his EDA Director to kill this sweetheart deal.

No comments:

Post a Comment