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Mount Vernon IDA reviews December finances and explores legal options to recover unpaid PILOTs
Summary
The Mount Vernon Industrial Development Agency reviewed its December financial statements, discussed receivables and escrow balances, and debated next steps after missed PILOT payments by an entity referred to as Dominican Magic; attorneys were asked to do further due diligence and report back rather than proceeding immediately with litigation.
The Mount Vernon Industrial Development Agency reviewed its December financial statements on Jan. 9 and discussed several overdue payment situations tied to PILOT (payment in lieu of taxes) schedules, including a nonresponsive company identified in the meeting as Dominican Magic and a recommendation from counsel to explore litigation to recover benefits and owed PILOTs.
The Agency’s finance presenter said the December report showed $450,169 in PILOT revenue and described cash and account balances across a pilot account, an operational account and a money market and escrow holdings. The presenter said some participants remain behind on administrative fees and that “we did write the initial letters to them to get the payment. No response.”
Agency counsel requested authority from the board to prepare litigation against Dominican Magic, saying, “I would request today, actually, is authorization to bring a lawsuit against Dominican Magic to call back the benefits and do anything we can to get the pilot payments and the benefits that were given.” Board members asked follow-up questions about contractual remedies and insolvency risks; counsel and other staff agreed to do additional due diligence first, including reviewing the company’s audited financial statements and pursuing a site visit to verify whether the business is operating. The board did not authorize immediate litigation at the meeting; counsel was asked to report back with findings and a recommendation at a future meeting.
Board members and staff also discussed accounting and timing challenges tied to when payments are received versus when they are paid out to beneficiary governments. The finance presenter described some reconciliation complications related to prior practice and the city’s quarterly reporting requirements, and noted escrow accounts are used to hold funds that may be needed to make future disbursements.
A summary of board directions: staff will continue collection efforts, agency counsel will conduct additional due diligence regarding Dominican Magic (including reviewing audits and potential insolvency risks) and will return to the board with a recommendation about litigation; staff will also follow up on outstanding administrative fees and recalculate any receivable schedules as needed.
The board approved routine minutes and two resolutions later in the meeting; none of those votes granted immediate authority to commence litigation against Dominican Magic.
