This is my second email. I also copied every non-profit in the river wards, Rep. Taylor and Councilman Squilla's office.
Dear PTSSD Board:
This is my second email to the whole Board of the Penn Treaty SSD requesting confirmation that the Board has indeed entertained and authorized a grant and disbursement of funds, as reported to be in the amount of $74,000 towards improvements to Bodine Street first proposed by Mike Driscoll, owner of Finnigan's Wake, at 537 North 3rd Street and subsequently passed by Council for the striking of a public street into a private alley for a private for-profit enterprise.
In addition to this, the Northern Liberties Neighborhood Association felt it necessary to disperse this disturbing news to its members which has been widely read in the community. In its most recent mailing to Northern Liberties residents, to wit:
Finnigan's Wake. Neighbors expressed concern and displeasure at Council's passage, at Councilman Squilla's behest, of bills legalizing the striking of the 500 block of Bodine St. and large outdoor balconies covering Spring Garden St., for Finnigan's Wake.
This week, Councilman Squilla visited the NLNA's Board of Directors meeting, where we reiterated the neighbors' concerns. He reiterated his statement that Finnigan's will not construct the balconies unless or until there's an agreement with the community. He also committed not to put through similar legislation in the future unless a community agreement already is in place.
Finally, many neighbors have approached us asking about a grant from the Penn Treaty Special Services District to Finnigan's Wake. (The SSD disperses annual funds from SugarHouse casino, and has generously funded the NLNA's most recent phase of its Community Center renovation). Our understanding is that the SSD has granted $74,000 to Finnigan's Wake for work on Bodine Street.
I should not have to be one to remind the Penn Treaty SSD that this type of transaction is highly suspect unless the bar has formally promised a community use of what is soon to become private property. If it is to be closed, limited, restricted, cordoned-off or constricted away from the beneficiaries that PTSSD has sworn in its incorporation to serve, that makes this disbursement to Mr. Driscoll a taxable gift no matter what type of entity receives the funds, either for-profit or non-profit.
I have reviewed your most recent publicly-available income tax return on GuideStar for TY2009, which reveals you are structured as a non-profit private foundation. I have also reviewed the Sugarhouse CBA and incorporation of PTSSD which was filed in New York State: http://www.comptroller.nyc.gov/bureaus/ ... useCBA.pdf
The IRS specifically has these overarching guidelines concerning your type of entity. I suggest you take these guidelines to heart:
1. Restrictions on self-dealing between private foundations and their substantial contributors and other disqualified persons;
2. Requirements that the foundation annually distribute income for charitable purposes;
3. Limits on their holdings in private businesses;
4. Provisions that investments must not jeopardize the carrying out of exempt purposes; and
5. Provisions to assure that expenditures further exempt purposes.
http://www.irs.gov/charities/charitable ... ,00a.html/
It is my opinion that this type of disbursement does not meet the IRS guidelines for your type of entity as the striking of Bodine Street for Finnigan's expansion and conversion to a commercial use can hardly constitute a cause worthy of a charitable contribution either directly or in an ancillary fashion. It could be ameliorated if the funds are going into an over-arching commercial improvement project, but a sole distribution for a single property owner for non-public property would not meet those conditions. Or, in exchange for the funds, the property is held in an exempt entity and access to the property is not constricted to a private commercial use (namely, for Finnigan's Wake next door), provided Finnigan's has a covenant that with such an entity in control of the private alley permitting use of the alley at the pleasure of the entity which owns it. Even if such an entity were erected, it's doubtful that anyone in the river wards would consider that entity to be legitimate.
If this news is truly the case, then I will inform you today that I will prepare and file IRS Form 13909 - Tax Exempt Organization Referral requesting a review of the Special Services District to answer the question of treatment over this transaction, and similarly, IRS Form 3949-A for Finnigan's Wake as being the recipient and benefactor of this disbursement with an additional question of tax treatment and any other entity created for this purpose. I will file these documents as your fiscal year draws to a close so that you have time to account for these transactions and all entities involved consider and book their treatment.
If this news turns out not to be the case, I implore you to announce the Board's position to the community in the most expeditious fashion possible. This type of disbursement is not only alarming, but it would completely destroy the PTSSD's reputation as a charitable entity for the betterment of the community.
I await your reply.