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Who’s actually paying for the Caterpillar Sky Walk?

Remember in my last post, how I said Caterpillar had purchased the naming rights for $1 million? Well…

Under the “Purchase” section of the Naming Rights Agreement, one of the conditions that must be met for the deal to go through is this: “Pere Marquette Hotel Associates, L.P., a Kansas limited partnership shall have paid to Caterpillar the amount of One Million and 00/100 Dollars ($1,000,000.00).” Pere Marquette Hotel Associates, L.P., is the company that sold the Hotel Pere Marquette to developer Gary Matthews.

So here’s how this works: Peoria gives $29 million to Matthews. Matthews gives $7,384,000 to the Pere owners to purchase the property. Pere owners give $1 million to Cat. Cat gives $1 million back to Matthews for naming rights. That $1 million then must be used (as specified in the naming rights agreement) “to pay for non-qualified rehabilitation expenditures … related to the construction of the project.”

This raises a couple questions. First, was the selling price of the Pere artificially inflated in order to kick back a million dollars to the developer? Did that million really come not from Cat’s pocket, but from the taxpayers? And second, where is that money going? Do “non-qualified rehabilitation expenditures … related to the construction of the project” include the developer’s fee, for instance? Or if it’s reinvested in the project, does it count toward Matthews’ personal equity in the project?

9 comments to Who’s actually paying for the Caterpillar Sky Walk?

  • District 150 Observer

    The “old pere” owed Cat the money.

  • checking for details.

    Glad to know that Cat got its money back. unfortunately the tax payers won’t.

  • checking for details.

    This is just one of the many shell games from this deal, the museum, the warehouse district, the road construction out north, and the OSF deal in the EB Tif. There is no money available for police to address the crime problem, for public works to fix the infastructure, or code enforcement/inspections to handle the decay issues and neglect of aging neighborhooods and irresponsible people.

  • D150: How do you know that? I haven’t been able to find any public information about the Pere owing money to Caterpillar. Do you have some inside information?

  • District 150 Observer

    Cat made a loan to the Pere several years ago for remodeling. The sale of the Pere allowed them to repay the loan.

  • @checking…now that the EVGC TIF is enacted, there may well be money for law enforcement, services, etc., but it will not be spent here. The obvious reason is the systematic gentrification of the East Bluff to ultimately benefit the developers waiting in line to purchase the land at the “blighted” value so OSF and the Diocese can build the area into the campus they desire so they can attract the physicians and students for their expansion of their Medical School. Why else pour money into building the Glen Oak Community facility when the area does not have the student population to support it? Why else close a perfectly good High School facility serving that area (a facility which is not scheduled for demolition and has been reopened as an alternative education site) to make it more desirable to relocate the teens and the families? The city and the diocese have their plans for the future, but unfortunately they do not include the disenfranchised or the taxpayers. Peoria is a miniature version of the United States economic model, and the ever widening gap between the haves and have nots is becoming all too clear. As to the money paid to Caterpillar, it will most certainly come directly or covertly out of the taxpayer’s pockets, since we are the ones funding this poorly planned and ultimately doomed project. If it were bound for success, why else would you close the only major hotel facility adjacent to the Civic Center before you have an alternative built? Or why not begin renovating the Marquette floor by floor while still allowing other floors to be occupied with paying customers? By the time the facilities are ready for occupancy, the tourists and visitors who may attend events in the interim will be used to the facilities across the river, and they are no fools. When our facilities are ready, our competition will be as well, with discounts for preferred customers and repeat business.

  • D150: That’s a reasonable speculation. I still wonder what the real answer is, though.

  • District 150 observer

    Real answer to what CJ?

  • D150: The real answer to the questions in my post. Unless you are officially speaking for Cat, or unless you can show me evidence for your assertion, I have to assume you’re just speculating, and your guess is as good as mine.