Why Should Delaware Care?
One of the largest recipients of Delaware’s opioid settlement funds to date is at risk of being lost due to unpaid taxes to the city of Wilmington. It is just the latest episode to raise questions regarding the vetting and monitoring of the state’s opioid fund.
The city of Wilmington intends to take a former school building that recently received a nearly half-million-dollar facelift, paid for by a state fund designed to help people suffering from addiction, to sheriff’s sale.
The city said it made the decision after the building’s owner – which includes prominent local businessman Ernest “Sammy” Congo Sr. – failed to pay more than $300,000 in property taxes on the building and on a neighboring parcel, located off West 28th Street.
Congo also owes an additional $388,000 in delinquent taxes on the two properties to New Castle County and to the Red Clay Consolidated School District.
Congo’s attorney Bill Rhodunda Jr. argues that the properties were tax exempt because they had always been tax exempt under the prior ownership of the Catholic Diocese of Wilmington. An affiliated company, the Congo Legacy Center, acquired the properties and held a nonprofit status until 2022. The company lost that status two years ago after failing to file tax returns with the Internal Revenue Service, but is now trying to regain it.
Rhodunda said his client will fight the city’s decision “to the bitter end,” noting that the state has invested $475,000 into the building through the opioid settlement fund. Asked how he will do that, Rhodunda indicated that he may challenge the sheriff’s sale by petitioning the city council, which is led by Congo’s son, Trippi Congo, for forgiveness of the past-due taxes.
“The city should actually be joining hands with this project to make it really an outstanding amenity for the community,” Rhodunda told Spotlight Delaware this week.
The episode is just the latest fight between city leaders and the Congo family over unpaid taxes. In 2018, Trippi owed the city nearly $20,000 in tax and utility delinquencies on properties, but avoided foreclosure. He has since paid those debts, according to land records.
It also adds to questions that recently emerged over how the state has spent and monitored $14 million in money derived from settlements with opioid production and distribution companies.
The tax-exempt status of the Congo Legacy Center remains the biggest point of contention in the city’s fight over unpaid taxes. | SPOTLIGHT DELAWARE PHOTO BY NICK STONESIFER
‘We need to move forward’
Emails obtained by Spotlight Delaware through a Freedom of Information Act request to the city show that Wilmington officials have been in a months-long dispute over more than $320,000 in property taxes, water bills and vacant property fees on Congo Legacy Center properties.
The city is not alone in seeking back taxes though. The center also owes New Castle County more than $138,000 on the school building and more than $249,000 on the church across the street, according to property records.
In total, the Congo Legacy Center owes more than $700,000 between the two properties.
Aside from the former Christ Our King Church, the city also plans to auction the former Delaware College Preparatory Academy, which shut down in 2015.
King Group LLC, of which Ernest is a managing member, bought the property in 2018. It was later purchased by the Congo Legacy Center in 2023, after it passed through another company tied to Ernest, Sam Spade LLC.
This matter has lingered for too long with no resolution. We need to move forward.
scott wilcox, outside city attorney
According to the emails, the city was worried the properties would benefit the family’s for-profit business, Congo Funeral Home – an assertion that Rhodunda denied.
“There is no chance he can make money on this property, and that has never been his goal,” Rhodunda wrote in response. “Beyond the grant, Mr. Congo has invested many thousands of his own dollars to make this an incredible community resource.”
According to Rhodunda, the organization filed to reinstate its tax-exemption status in August, but that request has yet to be ruled upon. That process is likely to take months, and retroactive reinstatement of its nonprofit status is more difficult now that 15 months have passed since it was revoked, according to the IRS.
The city said the sheriff’s sale could only be called off if the Legacy Center paid the lien in full.
And even if the Legacy Center was successful in reinstating its tax-exempt status, the taxes would still be due for any years that the IRS did not recognize it as tax-exempt, officials said.
“This matter has lingered for too long with no resolution. We need to move forward,” wrote Scott Wilcox, an outside attorney hired to handle delinquent accounts who also noted that Congo would have several more months to rectify the issues before the properties were ultimately sold at auction.
Opioid fund facelift
The prospect of a building that received nearly half a million dollars in renovations being lost at sheriff’s sale has also raised questions regarding the vetting process of the Prescription Opioid Settlement Distribution Commission (POSDC).
The grant to the Congo Legacy Center was the third largest of any grant given out by the commission, and the second largest to a non-state agency.
According to its grant application, obtained by Spotlight Delaware in a FOIA request, the Congo-Tarir Project, as it is known, aimed to create a community-based program on the east side of Wilmington to provide activities that promote self-care, education, health, and wellness.
The public would “receive primary and secondary prevention and education regarding the use of opioids and the destruction these substances cause on the human body and their environment. They would also receive information regarding treatment so they understand that there should be no stigma associated with addiction and the possibility of entering and remaining in recovery.”
Individuals would be screened for social determinants of health needs and connected to resources that will help them access needed services. These resources include safe housing, food, childcare options, transportation options, primary care, social services including assistance with application process for Medicaid, TANF and other social service supports.
The center would offer a variety of services, including tutoring, music lessons, chess clubs, Math Odyssey clubs, an English and Writing Center, educational and recreational field trips, peer group counseling, primary care screenings and a food pantry.
Access to that hub would require participation in anti-opioid education information sessions. Following an initial session, an individual would receive access to that hub and refresher courses would be required every six months.
According to the metrics of success in the grant application, the center’s renovations would be completed by Jan. 1, 2024, and services would have begun March 1 – neither target date was met.
Funding was also supposed to be released in three tranches as the grantee completed certain milestones, including completing renovations, hiring a program coordinator, beginning operations and submitting monthly tracking reports. The program has yet to open to the public, but all three tranches of funding have been paid as of April, according to Delaware’s Open Checkbook.
Ernest Congo told Spotlight Delaware that the funding was spent on the necessary renovations of the aging facility, including new paint, vinyl flooring and windows.
The state’s $250 million opioid settlement pot has been under scrutiny since late-June, when Attorney General Kathy Jennings flagged allegations of fraud against a Kent County nonprofit and called for better guardrails for the windfall.
Lt. Gov. Bethany Hall-Long’s office, which oversees the fund, said it was unaware of the impending sheriff’s sale.
The office added that the POSDC, which recommends grant awards for consideration by the Behavioral Health Consortium, “followed the publicly posted guidance” during the awarding process.
“Reviewing taxes is not part of the state procurement process for these types of awards,” the office said in a statement. “Once doors open, the project will serve youth and their families by providing educational information and activities to prevent and decrease opioid use disorder in high-risk communities.”
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