The FAPS Flap

Debt collectors on the docks are reputed to be aggressive, and there’s a hint of that in the Port Authority of New York and New Jersey’s dunning of a longtime tenant that’s behind on its rent.

No, the port authority didn’t send goons to break kneecaps at Foreign Auto Processors Service, which owes $2.8 million in back rent and fees. Instead, the agency issued a press release accusing FAPS of “persistent ongoing failure to pay their rent and fees, despite ongoing discussions with the port authority starting in 2011.”

The press release featured chest-thumping quotes from no fewer than four port authority executives -- the chairman, vice chairman, executive director and deputy executive director. They declared that the port authority will enforce a hard-line policy on past-due rent and will no longer tolerate slow payers.

The agency added it “is closely monitoring its other port tenants and is prepared to take action against at least one other tenant who is behind on rent payments.”

The tone of the press release suggested that the port authority’s public demand for payment followed behind-the-scene talks that failed to produce a satisfactory repayment schedule. And it’s no secret the port authority is scrounging for every nickel it can find to help finance a list of capital programs headed by the over-budget World Trade Center reconstruction.

Nevertheless, the public criticism of FAPS seems an odd way to collect an overdue bill from a tenant that handles one-third of the port’s vehicle business. FAPS has been a Port Newark fixture since 1956, when tail fins were coming into vogue.

FAPS says it hit a rough patch when auto imports were disrupted by the recession and last year’s Japan earthquake and tsunami. The company also lost a major account in 2010 when Hyundai and Kia consolidated their North Atlantic business in Philadelphia. New York-New Jersey’s vehicle imports slipped 21.9 percent to 366,768 units last year, well below their peak of 654,770 in 2008, port authority statistics show.

Former Sen. Robert Torricelli, D-N.J., an adviser to FAPS, says the company’s fortunes have improved with the rebound in the auto market. “FAPS has returned to profitability and has been paying its rent fully in recent months and has been making payments in arrears,” he said.

Torricelli said that after the Japan disaster, FAPS could have sought a force majeure declaration that would have allowed them to skip rent payments but declined to do so. He called the port authority’s demand for immediate payment of back rent was “disappointing and unnecessary… This is the kind of situation where reasonable people could have worked together.”

Contact Joseph Bonney at jbonney@joc.com. Follow him on Twitter @josephbonney.

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