Hackerman owes city $1 million

April 13, 1995|By Joan Jacobson | Joan Jacobson,Sun Staff Writer

Millionaire philanthropist Willard Hackerman owes Baltimore at least $1 million in delinquent taxes on machinery and office equipment at his Pulaski incinerator, city officials said.

The personal property taxes for all nonreal estate holdings at the East Baltimore incinerator were due in September, according to city tax records.

Mr. Hackerman, who owns Whiting-Turner Contracting Co., bought the incinerator from the city in 1981.

City tax collector Ottavio Grande said that if the taxes aren't paid by May, the city will send Mr. Hackerman a dunning letter. If taxes are still unpaid by August, the city will sue Mr. Hackerman in District Court.

In addition to the unpaid taxes, Mr. Hackerman has failed to file a report called a personal property return with the state's Department of Assessment and Taxation, said Edward S. Muth, administrator of the personal property division for the tax department.

That return -- due each April -- requires Mr. Hackerman to itemize the costs of machinery and equipment purchased by his Pulaski Company, which runs the incinerator.

Mr. Muth said Mr. Hackerman has failed to file that report for at least the past five years.

"We don't have any record of this particular property ever filing a report. We only keep records for five years, so it would be difficult to say anything for [prior] years," he said.

Because he failed to file the reports, Mr. Muth said, Mr. Hackerman has been penalized with a 20 percent increase on his assessment, which is included in the incinerator tax bills sent by the city.

The state uses the return forms to assess the value of the property. Because the state lacked the documents, assessors used information from city auditors to put a value on the equipment, Mr. Muth said.

He also said Mr. Hackerman has sent the state a letter protesting the assessment.

But Mr. Muth said, "We're essentially not going to do anything" about the assessment protest until Mr. Hackerman sends returns showing the value of his property.

Mr. Hackerman bought the incinerator in 1981 for $41 million from the city in a unique agreement in which the city subsidized most of his operating costs -- including taxes.

The agreement with the administration of Mayor William Donald Schaefer was later called a sweetheart deal by the Schmoke administration.

From 1989 to 1994, the city agreed to pay 85 percent of the incinerator's costs and taxes. But since January 1994, Mr. Hackerman has been responsible for all costs and taxes.

The unpaid tax bills, all sent in August, date from July 1992 to June 1995. They total $2.9 million.

Charles Fax, a lawyer for the city, said it is unlikely -- because of the agreement by the city to pay some of the taxes -- that Mr. Hackerman will actually be liable for the entire bill.

But Mr. Hackerman owes at least the $993,000 bill for 1994-1995 and part of the $966,000 bill from 1993-1994, Mr. Fax said.

"We're trying to determine how much is owed" before 1994, he said.

Mr. Hackerman did not return a reporter's call.

Bryson Cook, a lawyer for the construction magnate said Monday, "Mr. Hackerman instructs us not to talk to the press."

In January 1994, city officials and Mr. Hackerman agreed in principle to end their waste disposal agreement, which had cost the city millions of dollars in operating subsidies to the millionaire.

The city hired Mr. Fax, an attorney for the law firm Shapiro and Olander, to settle a dispute between the city and Mr. Hackerman over the final financial terms of their waste disposal agreement and to settle a breach of contract suit filed by Mr. Hackerman against the city in December 1993.

But the settlement talks have yet to result in a final agreement.

City officials claim Mr. Hackerman owes them millions of dollars while Mr. Hackerman contends the city owes him millions of dollars.

On Monday, Mr. Fax said: "The issue of personal property taxes will be resolved independent of and prior to a final [contract settlement] proposal to be brought before the Board of Estimates." He said he did not know when the financial settlement will be completed.

In a recent letter to Mayor Schmoke, City Councilman John L. Cain, a 1st District Democrat, worried that the unpaid taxes may be part of settlement negotiations with Mr. Hackerman on the incinerator contract.

"No other taxpayer is able to negotiate tax payments with the city, and we believe it is inappropriate to discuss such matters with this profit-making enterprise," the councilman wrote.

The Pulaski incinerator, on Pulaski Highway west of Interstate 95, has been the source of complaints by neighbors of smoke, bad odors and gritty fallout.

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