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Hingham hires attorney to collect $1.7 million in taxes from Linden Ponds

Posted by Jessica Bartlett  July 13, 2011 01:29 PM

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Hingham officials have hired a Texas attorney to represent the town in court proceedings with Linden Ponds retirement community, which filed for bankruptcy protection in a Dallas court last month.

According to Hingham officials, the organization owes the town $1.7 million in back taxes for the third and fourth quarters of fiscal 2011, money that should become available once the debt restructuring of the retirement community is complete. Fiscal 2011 ended June 30

“We’ve been told by Linden Ponds that the reason they are filing bankruptcy is to reorganize their debt obligation and receive a lower payment plan that will free up debt-service money for operating money and the operating expenses…which include our taxes as their first priority,” said Town Administrator Ted Alexiades.

Alexiades asked the Board of Selectmen for permission to hire outside counsel at their meeting last night.

“Their hope is when they come out of this bankruptcy filing, they will be able to address our bills come the fall,” Alexiades said.

Although the town is confident that it will received the overdue taxes sooner or later, the counsel is in place to ensure that the municipality receives the full amount of interest on the delinquent bills.

According to Alexiades, Linden Ponds, owned by Dallas-based Erickson Living, currently owes 14 percent interest. Although the community has asked to reduce that rate to five percent, the town hopes the Dallas courts do not grant the request.

“We don’t have many delinquent taxpayers, and we expect people to pay their bills in a timely fashion. If they’re not, everyone should be charged the same penalty,” he said.

The attorney, who will cost between $1,000 and $1,500, will represent the town in court this Friday during a bankruptcy hearing.

The cost may be borne by Linden Ponds, Alexiades said, as is usually the case with tax titles.

If not, the cost of counsel will be shared with Hingham Municipal Light Plant. Linden Ponds has also been delinquent in their lighting bills, Alexiades said, although he wasn’t sure of that total cost.

“If its determined that we need to retain broader counsel, then we would reevaluate the decision and look at the cost,” Alexiades said.

What is potentially problematic for the town is the expectation of new growth for the community. Linden Ponds has been struggling since 2009, when the real estate market and economy took a hit during the campus’s second phase of construction.

The blow halted all future construction for the time, which will ultimately affect the town in expected revenues for upcoming years.

“The lack of future expansion that was planned, if it doesn’t happen, then we have to pull back our expectations of revenues going forward,” Alexiades said. “The expectation was within the next couple of years that they would be back on track. It may be a longer window, we’ll push those numbers further out, but it does impact our ability to fund our services. We’ll have to evaluate that as we get close to our budget cycles.”

Despite current financial woes, Linden Ponds officials have said that the debt restructuring will help put the community back on track, both with future growth and with bill payments.

"The reorganization plan filed by Linden Ponds includes the payment of taxes owed to the town of Hingham," Linden Ponds said in a statement. "Hingham Municipal Lighting will [also] be paid according to the plan."

Although there is no timeline for future growth, officials at the retirement community hope that once the economy stabilizes, the campus can continue on with expected expansion.

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