Mission Implausible

Examining Daniel Zilka's revisionist history, part 2

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Taxing matters in preservation

Our preservation efforts have saved a number of diners from demolition and neglect during the last six years. Under some circumstances, the museum has had to underwrite the removal and storage of diners before a sale was completed.

This photo above taken in 2003, show the crown jewel of the "museum's" collection in storage outside the "temporary office" at 95 Industrial Circle, Lincoln, Rhode Island. Note the callous disregard for this extremely rare artifact that was a functioning diner when given to Zilka.

This photo shows the interior of Hickey's after the removal of its porcelain panels and tile flooring. Though not seen here, the ceiling panels had also been stripped away. When donated to the "museum," Hickey's had previously been used by the city of Taunton, Massachusetts as a municipal mascot of sorts, rolled out every July fourth for use as a concession during the festivities. Click on photo for a larger image.

In 2002, the Museum seemed to be on a roll. Suddenly, it managed to convince owners of old diners in the way of planned developments to donate these structures, which the museum then in turn sold to people looking for a good vintage diner. Zilka received considerable publicity for his efforts.

On the surface of things, the scheme looked similar to those seen advertised in newspapers every day: "Don't sell your car. Donate it!" Non-profit organizations accept used cars as donations in exchange for the tax deduction based on the car's Blue Book™ value. The organization can then sell the car for the actual cash. Everyone wins.

Except that there's no Blue Book™ for diners. Each one needs to be assessed by an independent appraiser, and there exists very few people qualified in this field. Registered real estate appraisers would have to contact one of these experts for supporting documentation. Of these, one might be Zilka, but IRS regulations prohibit him from appraising something for the benefit of his own organization.

In every article published about these deals, journalists have repeatedly failed to ask one very basic question: Why give the diner to the museum which then immediately sells it? Why not just eliminate the middleman and go straight for the cash?

The answer may lie with Zilka’s appraisal scheme. For example, in 2001 Blaise Alexander owner of a large auto dealership in Montoursville, Pennsylvania donated the former Mayfair Diner to the museum to clear it from a lot near Binghamton, New York he planned to develop. Zilka then immediately shipped it to its new owner, selling it for just under $20,000. Obviously, while he was busy making a case to Mr. Alexander for its preservation within his museum, Zilka had already lined up a buyer.

For a tax deduction to equal the eventual sale price of nearly $20,000, and based on a 30% tax rate, Alexander would have to claim a donated value of at least $60,000. Having covered the diner industry for over 15 years, I'm hard pressed to find evidence supporting such an appraisal for what amounted to only a structurally sound shell of a diner.

Such diners typically fetch prices in the $7,500 - $20,000 range -- at best. While we can certainly cite the rare occasion of an exuberant foreign buyer paying much more for a pristine diner, we could conversely cite the land owner who happily rid himself of a rusting hulk for free. The recent sale of a comparable 1950’s New-Jersey-built diner, the Valley Diner in Waterbury, Connecticut for $10,000 is a good example of true market value. This diner sat on the market for several years; is similar in size and in better condition than the Mayfair; yet could not find a buyer willing to pay more than $10,000. And there were no motivating factors such as impending redevelopment. The sale of the Valley diner was no fire sale price. That $10,000 figure was simply all these diners command.

Nevertheless, in a conversation I had with Mr. Alexander in the spring of 2003, not only did he reveal that he received a written appraisal of $65,000, but he received it from Zilka on Diner Museum letterhead. The conflict of interest worsens when you consider that in selling for less than a third of the appraised figure, he effectively cheated his own museum out of $45,000. Or was it really only worth $20,000? Even if the market warranted a higher valuation, Zilka is forbidden by law to supply such an appraisal.

At least five other similarly structured transactions involving donated diners have occurred over the last four years. Perhaps the IRS may some day address this nagging question.

There is another troubling potential conflict of interest scenario we are aware of. The ADM website features a Diners For Sale section where it offers its services as broker for the seller and collects commissions on those sales. Diner owners may be duped into listing their diner on this site in the belief that the ADM is necessarily acting in their best interest. Case in point, the Route 28 Diner in Salem, New Hampshire. This 1940 Sterling diner has been closed for over one year, and must soon be moved to make way for redevelopment. The owner of the property has no knowledge as to its worth, and is solely relying on Zilka, who has set the asking price of $38,500.

There is no evidence to support this structure is worth more than $10,000, if indeed a buyer exists at all. Of course Zilka would gladly add it to his collection of rotting diners. By setting a price that is unlikely to attract a buyer, and due to the impending redevelopment deadline, it is only a matter of time before the ADM will offer to take the diner for free, or offer a tax deductible receipt for it, as it has so many times before. All the while, the unsuspecting owner may have otherwise been able to sell it for cash.

We also maintain a "Diner for Sale" list which features many of the same diners. We also make it clear to those who order this list that we have no stake in their sale. If no buyers appear, we do not ask for the structure nor would we want it. This neutral position allows us to counsel prospective buyers as to the true value of these structures. For instance, we often remind them that if no one buys the diner, the seller will ultimately pay at least $10,000 in disposal costs. In other words, a diner sold for $20,000 actually nets its owner $30,000 if the buyer takes responsibility for removal, which they often do.

Where is the plan?

A small working budget helps to pay the costs of materials, supplies and equipment rentals. We have received nationwide publicity for many of our diner rescue operations. The list of rescued diners includes…

Rescued? That definitely depends on the eye of the beholder. Imagine if the survivors of the Titanic had been rescued by the equally ill-fated Lusitania. None of the complete diners in ADM hands rest in secured, enclosed storage.

Apple Tree Diner / Midway Diner, 1930 Worcester #659
Acquired in 1997. In storage in an open lot in Providence. Zilka has no plan for this artifact.

Sherwood's Diner, 1940 Worcester #755
Acquired in 1997. Stored at a lot near Quonset Point and exposed to the elements. Seven years after its donation, Zilka has no plan for this artifact.

The Elite Diner moved in October, 1996 with much fanfare due to the extreme rarity of this particular artifact. One of only a handful of Mulholland cars, it represents something of an unpolished gem in the collection. Since then, it has sat outdoors exposed to the elements with little prospects for its future. Not seen from this angle, the diner's back wall was removed years ago.

Elite Diner, (at right) 1924 Mulholland Dining Car
Acquired in 1996. In storage in East Liverpool, Ohio. Zilka has no plan for this artifact.

Morris Lunch / Jonesville Diner, 1939 Sterling #399
Acquired in 1998. Dismantled after three years in open storage behind the Shawmut Diner, then sold in pieces to a Chicago area individual.

Liberty Diner, 1938 Sterling #386
Acquired in 1999. Formerly of Syracuse, New York. Rotted, collapsed and dismantled remains. In storage at the ADM’s Fall River, Massachusetts warehouse. Effectively non-extant.

Louis' Diner, 1933 Worcester #708
Acquired in 1999. Stored at a lot near Quonset Point and exposed to the elements. Since its donation, this diner shows considerable decay. Through an association with the National Trust, the museum has sought donations to pay for its restoration.

Royal Diner, 1956 Mahony
Acquired in 2001. Sold to Matt Alldredge who reopened it as the Springfield Royal Diner. At some point between Kingston, New York and Springfield, Vermont, the diner has lost one of its two original tags. Though he has denied any knowledge of these tags, he somehow managed to supply replicas.

Eddie's Diner, 1952 Jerry O'Mahony #2215
Acquired in 1998. Purchased by the Sanford family of Westport, Massachusetts for a planned diner project. Quentin Sanford, Jr. and his sister Bethany Smith both serve on the ADM Board.

Wesson's Diner / Cosmos Diner, 1954 Worcester #843
Donated to the museum for an unspecified "tax write-off." and transfered to private ownership. In storage in Vermont.

Lemoyne Diner, 1940 Jerry O'Mahony #1014
Donated to the ADM, flipped and sold to Richard Shappe in Providence, who currently works on its restoration without the assistance of Zilka.

Community Diner, 1954 Silk City #5413
Donated to the Museum in 2002, flipped and sold it to an individual in Coudersport, Pennsylvania.

Mayfair Diner / 1948 Kullman Diner
See above. Currently in storage in Bow, New Hampshire.

Phillips Diner, 1946 Worcester #792
Donated to the Museum by MCI in 2000, which also paid the ADM almost $48,000 in salvage fees. In 2003, the Museum sold the diner for less than $5,000. to Don Moyer of Ohio who complains of many missing parts suspected to have been set aside and now stored away in the ADM's Fall River, Massachusetts warehouse.

Tom Sawyer Diner, 1958 DeRaffele
Zilka's attempts to broker the diner ended with the untimely death of the buyer. The Tom Sawyer was later sold to Steve Harwin without any involvement of Zilka. Any claims that he “rescued” this diner are simply untrue.

Hickey's Diner, 1947 Worcester #798
Donated to the ADM in 1997 by the City of Taunton, Massachusetts which had received it from its original owner after his retirement. Despite the lunch wagon's excellent condition, Zilka began dismantling the rare diner. He then purchased a truck chassis on Ebay similar to the original. While Zilka would otherwise earn praise for his early efforts, he soon gave up on this project due to a lack of funds. Zilka’s track record of failing to complete projects does not bode well for the future of this crown-jewel of the collection.

While still on the ADM Board, I had argued for getting this spectacular artifact out before the general public as often as possible rather than worrying about the authenticity of the type of truck that carries it. Its promotional value far exceeded the necessity for historical perfection at a time when the Museum desperately needed to raise funds, attract awareness and sign up new members.

These two photos show the interior and exterior of the Tasley Diner in Tasley, Virginia, a Brill donated to Zilka in 1996 when still in good condition. When Zilka and two volunteers finally arrived on the scene in April of 1997, this is what they found. Despite the decrepit condition, Zilka spent an entire day salvaging everything and anything he could extract from the wreck. Nothing had any significant historical or economic value.

Worcester Deluxe c1961 #101
Acquired in 1999. Another rotted and all but abandoned ADM project. For almost 40 years this rare diner sat incomplete in like new condition inside the factory where it was made. Since 1999, when the ADM took possession, the diner has sat outside open to the elements. According to the ADM’s 2003 Annual Report, it pays Sayles Mill Realty $2,400 a year to store just this one wreck alone. It has now been for sale for 5 years. The current $7,500. asking price would not even cover the moving and storage bills. See this link.

Poirier's Diner / El Faro Diner, 1948 Kullman Diner
Donated to the Museum for undisclosed terms, and flipped to private developer in Providence. Zilka gutted the diner to its shell in spring, 2004. Project now stalled.

Turnabout Diner / Conowingo Diner, 1930s Silk City #3816
Donated to ADM in 2003 for undisclosed terms and sold for $5,000.

Dandy Diner / Barney's Diner, 1933 Worcester #718
Donated for undisclosed terms. In storage in an open lot in Providence. The museum has no plan for this artifact.

Boulevard Diner / South Windham Diner, 1958 Bramson #210
Donated to Zilka in 2004 who has since sold it to a local businessman. This diner moved to North Windham in February, 2005.

Wayne Diner, 1953 Mountain View #447
Donated to the Zilka for undisclosed terms in 2001, and promptly flipped to a Buffalo, New York restaurateur. Its former owner, Warren Kuo, had offered this diner for sale at $25,000 and received interest from serious parties. But instead of taking cash, Mr. Kuo took the ADM’s 501 c3 tax write-off. 

Berlin Diner, Mountain View # 428
Another unrealized project. Sold and moved to Connecticut. Restoration work commenced, then abandoned. Never re-opened for business. Moved once again to Massachusetts. Restoration work began again in 2004 and once again has stalled indefinitely. See this link.

Veteran Square Diner, 1911 Osgood Bradley trolley
In storage in an open lot in Providence. The museum has no plan for this former streetcar. Of little or no value to an underfunded fledgling diner museum. Yet another example of the acquisition of a questionable artifact with no plan.

I'm all for saving diners, but exactly what is the plan? What are the priorities here? If the mission is to open a museum to help spread further appreciation for these artifacts, I have yet to see how the expensive warehousing of rotting buildings advances that mission. By my count, we still have another 2000 diners out there, so in our lifetimes, plenty will slip into obsolescence and become available as preservation projects.