Saturday, August 09, 2008

Corporate Welfare in Rhode Island

This Projo article caught my eye a few days ago. Capital Properties is now a publicly owned business. This means that it must observe certain public filings regarding its ownership, directorship, and monies. It is now becoming a privately owned company which means- none of the former.

Why should this be of concern? It's important to know what the business does. When the downtown r.r. station was rebuilt, Capital fronted half the monies needed for a new 330 car parking garage with the FRA (Federal Railroad Admin.) putting up the other half. It now owns this property. Sounds like a good deal to me.

The Chair of this company is Robert Eder who is also chair & CEO of the Prov. & Worcester Railroad Co. (a Del. corp.) His wife, Linda, own 53.2% of Capital Properties. Eder bought out the r.r. (1966) that owned much of the land involved in the redevelopment of Prov. It was both public & private funding which financed the "Renaissance City" & is still doing so.

Eder has done quite well with his initial investment (he is a Harvard grad with both R.I. & N.Y. law licenses). He makes over half a mil with the r.r. & a quarter of a mil with Capital Properties. Capital Properties is a spin-off of the r.r., now leasing the valuable real estate upon which many buildings sit. For instance, it leases land to the new Blue Cross building & owns the land under oil refineries- all quite profitable. No wonder my Blue Cross rates continue in their ever upward spiral.

Eder is a frequent campaign/PAC contributer. He contributed both to the Kerry campaign and the Swift boaters (he is a veteran after all). He frequently contributes big bucks to the 2nd largest pro-Israeli Pac in the U.S.

Now Capital Properties is becoming a privately owned REIT (real estate trust investment). This designation "minimizes or eliminates its federal corporate tax liability." (Projo) It may also do so with state taxes., So I'm wondering how many of you individuals or small business owners have had your federal taxes reduced/eliminated recently? I hesitate in even referring to this as corporate "welfare" as its an insult to those individuals receiving barely subsistence level assistance. Rep. Amy Rice intro'd legislation to end this tax loophole in R.I. which shelters income, but I believe that it died.

So thanks to the citizens of Providence and Rhode Island and the federal government, we've made a few investor/owners very, very rich with very, very little cost to themselves.
And now no cost. Ain't life grand? No wonder the local, state, & federal coffers are so low. Feeling the big bucks trickling down yet? BTW, Eder calls a Palm Beach condo his home now after selling a previous Florida property for a cool 2.25. mil. Why not? Plenty of tax shelters there, too.

Thanks to Projo's reporter Timoth8y Barmann for the article.
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