Lease deals unfair
to private enterprise
With Fort Monmouth getting in on the act of seeking private tenants for its public property, it is time to step back and think about what such arrangements really are and what effect they have on the communities outside their borders.
Neither Fort Monmouth nor the National Park Service, which is pursuing a private lease agreement for buildings on Fort Hancock on Sandy Hook, have actually leased any buildings for profit as yet, but there are some troubling implications to their plans.
First and foremost, the government seems to be entering into competition with local property owners, and despite assurances otherwise, it seems almost certain they are not operating on a level playing field.
In both cases, there is no provision to collect local property taxes on the buildings and land leased, and that clearly provides a competitive advantage for someone. It also is impossible to overlook the fact that Sandy Hook Partners, the designated developer, will receive what amounts to a federal subsidy of $17 million through a tax credit that even it acknowledges is the only thing that makes the project feasible.
In case that last statement wasn’t clear, what the people involved in the Sandy Hook project have said is that we have to pay them $17 million to save the buildings because we (meaning our government representatives) won’t give the park service the money to do the job.
Even if you can get your mind around that twisted piece of reasoning, there is nothing but the assurance of government officials — not exactly known for their business acumen — that the fees they charge will be adequate to ensure fairness in the marketplace. The byzantine nature of the agreements, which call for in-kind contributions and improvements not directly related to the buildings to be leased definitely make fairness difficult to ascertain.
And, private commercial property owners are not alone in getting hurt by losing business, everyone else in these towns has to pay more property taxes because the owners of vacant property can and will apply for property tax relief based on the diminished value of their holdings.
Right now the people who privately own commercial property in the area can tell you that the supply of space is well in excess of demand.
The fact that representatives of the West Long Branch-based PRC Group recently acknowledged that the company was not breaking ground on a long-approved large office tower in Red Bank because there is no anchor tenant for the building tells you all you need to know about current conditions in the market.
Whether intentionally or not, the federal government is entering into competition with the private sector, and that’s not supposed to be the way a capitalist society operates.