Bar operator's tax warrant puts spotlight on WEDI's Downtown Bazaar decision

How did WEDI board members decide a NY tax debtor was their best bet to run incubator's alcohol franchise?

When Downtown Bazaar’s bar opened last April, the man Westminster Economic Development Initiative selected to run it had never held a license to sell alcohol in New York.

When Joseph C. Joy was announced as the operator of Lulu’s Pub, WEDI officials said Joy would get his alcohol license soon. But Joy closed his bar this April, without ever getting a license.

Was Joy even eligible for an alcohol license? A public records search raised the question, but does not provide the answer.

On May 8, a tax warrant against Joseph C. Joy was docketed in Erie County Clerk’s Office public records. It shows he owed the New York State Department of Taxation and Finance a debt of $6,056.10.

The New York State Liquor Authority insists alcohol license applicants follow all state laws, including statutes requiring tax payments. Joy getting approved for an alcohol license or certificate to collect sales tax was a longshot.

After “a final review of the application and correspondence with the applicant,” Joy withdrew his Lulu’s Pub license application, State Liquor Authority spokesman Patrick Garrett said.

Since WEDI rejected at least two veteran, licensed bar operators to name Joy the only qualified applicant, the tax warrant focuses more attention on WEDI’s decision.

On Friday, board member and immediate past president Steve Zenger, board president Krista Schwartzoff, and executive director Carolynn Welch were asked to explain how Joy got the bar. Joy was asked how his debt affected his license application.

Since Friday, the WEDI board declined to answer questions about how Joy got the bar. In an email, board member Steve Zenger said the agency would not answer questions about how it picked Joy, citing privacy concerns. Joy did not comment on questions about the tax warrant and how he won the bid over more experienced operators.

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Tax warrants are the stick in Taxation and Finance’s carrot-and-stick approach to extracting money from delinquent taxpayers. Debtors are notified of mounting interest and penalties, and encouraged to consider the state’s Installment Payment Agreement program, which lets them pay over time while avoiding a warrant filing.

Taxation and Finance’s tax warrants page explains why taxpayers avoid them.

A tax warrant is equivalent to a civil judgment against you, and protects New York State's interests and priority in the collection of outstanding tax debt. We file a tax warrant with the appropriate New York State county clerk’s office and the New York State Department of State, and it becomes a public record. A filed tax warrant creates a lien against your real and personal property, and may:

• allow us to seize and sell your real and personal property,

• allow us to garnish your wages or other income,

• affect your ability to buy or sell property, or

• affect your ability to obtain credit.

State law says warrants can be issued as soon as 20 days after the debt is confirmed, but that’s an old statute. These days, Taxation and Finance does not usually issue warrants on debts less than a year old. Even once paid, tax warrants can remain on your credit report for a decade. 

Applicants for state licenses who are facing tax warrants can still get a license. First, they have to pay their tax bill, or enter into a repayment agreement that satisfies Taxation and Finance.

Joy’s installment in the Downtown Bazaar, and the role he played among its tenants, affected the project’s ecosystem in numerous ways. 

Beer and wine helped attract customers into the space, while the bar was open. Joy ran events at Lulu‘s Pub to draw more attention to the space and the tenants there. He organized drink specials to go with different vendor cuisines for each day of the week. Joy did more social media work than WEDI itself did to market the Downtown Bazaar.

Tenants also saw Joy’s beer cooler repaired so he could sell cold beverages. Meanwhile, WEDI deflected tenants’ pleas to fix the walk-in freezer they’d been promised before moving into the downtown space. They were left to wonder if Joy’s history as WEDI Executive Director Carolynn Welch’s ex-boyfriend was a factor.

Concerns Joy was acting as WEDI management were heightened when Joy approached several tenants, veteran restaurateurs, with unsolicited coaching and proposed corrections to their standard cooking and business practices. 

In March, without any WEDI staffer introducing the subject, tenants said, Joy presented them with a concessionaire agreement to sign. The document would have made them Joy’s employees, they believed, so they refused.

Depending on when Joy incurred the state tax bill, he could have been practically ineligible for licensure during the entire tenure of Lulu’s Pub at 617 Main St. 

That may not be the case. As with other questions about WEDI’s management decisions, priorities, and actions, without more information, the answers remain unknown at this time.

If you would like to share your experience with WEDI, email me at andrew@fourbites.net.

EDITOR’S NOTE

This story started when one of the researchers helping me examine public records related to WEDI-related people found Joy’s tax warrant in the Erie County Clerk’s Office online search.

So the next day, I drove down to 92 Franklin St., and got a copy of the document. Then I read the state’s tax warrant law, Taxation and Finance guidance documents, and articles by lawyers specializing in New York State tax disputes.

Which left me wondering: How could WEDI present a man with an unpaid tax bill as the only qualified candidate, when New York State does not grant alcohol licenses to people who owe it money? 

Despite my efforts, this story does not answer that question. My questions were presented to WEDI on June 21, five days ago. The WEDI board members who made these decisions might have the answers, but that remains unclear as long as they choose silence.

If WEDI was a privately owned business, I would not have pursued answers about its decisions. If the board of Acme Corp. hired its CEO’s babysitter and bestowed a bar on her ex-boyfriend even though he’d never held an alcohol license, that’s Acme Corp.’s business.

Like other non-profits, WEDI is a public asset, owned by the community, but entrusted to a board whose members agree to take fiduciary duty for its operations. 

If Acme Corp. makes a strategic error, it hurts the bottom line. When non-profits malfunction, they tend to hurt people in our community who have already known enough pain. As a community member with the ability to research, verify, and deliver information, I will continue working to surface relevant facts as the community decides what to do, if anything.

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