Monthly Archives: February 2010

Open Meetings Act, Peoria Public Schools

Attorney General investigating D150 for possible Open Meetings Act violation

13 Comments

This came in the mail to me today from the Attorney General’s office:

February 26, 2010

RE: Open Meetings Act Request for Review — No. 5949

Dear Mr. Summers:

Thank you for submitting your Request for Review to the Public Access Counselor at the Office of the Illinois Attorney General pursuant to the Open Meetings Act (OMA), 5 ILCS 120 et. seq. Your Request related to an event held by the Peoria School District 150 Board of Education on February 16, 2010.

We have determined that further inquiry into the matter is warranted and have asked the Board to provide additional information to aid in our review. We will be reviewing relevant materials to determine whether the Board is in compliance with the requirements of the Act. Multiple requests for review have been filed with the PAC on this particular matter.

If you have any questions, please feel free to contact me at 217-785-7438.

Sincerely,

Cara Smith
Public Access Counselor

Related post: District 150 and the Open Meetings Act.

City of Peoria, Museum Block, Peoria County

This land is my land, say City and County

11 Comments

There’s a new conflict in the museum soap opera. Here’s the skinny: the County wants to own portion of the Sears block on which the proposed museum would be built, but they don’t want to pay the City for it, and the City isn’t too keen on that idea.

Let’s start with these lines:

“We’ve made it this far and all of a sudden now they want ownership?” Dillon asked, questioning the city’s motives.

Some affiliated with Peoria County are shaking their heads, noting the city has always indicated it wasn’t going to be “a roadblock” on any museum issue….

At-large City Councilman Ryan Spain acknowledged ongoing discussions but he said he didn’t know of any “strong push” from council members for the ownership or the co-ownership of the land.

“We still stand behind giving the land away,” Spain said. “That was our major contribution for the project.”

First of all, nowhere did anyone say that the City was going to just give the land to the County. The original redevelopment agreement between the City and the museum group agreed to lease the land to the museum for $1 per year for 99 years. So, essentially, they were donating the use of the land, but not ownership of it. Enter the County, thanks to the public facilities tax referendum. It would seem reasonable to assume that the City still planned to lease the land for the same amount, thus not being “a roadblock” in the way of museum progress. But now the the County has decided it wants/needs to own the land… well, that’s a different story. Perhaps the County was assuming facts not in evidence. Or maybe they just misunderstood. And as for Mr. Spain, I’d like him to show me the vote where the City Council said they were going to give away the land for nothing.

Moving on:

In fact, county officials argue it is necessary for them to have ownership of the property as part of a legal basis for the referendum allowing them to seek voter approval on a special sales tax through a new law.

This raises some rather disturbing questions. Is the County now saying that they have a legal requirement to own the land in order to use the sales tax revenue for the project? If so, the County has been keeping its proverbial cart in front of the horse for longer than I realized. The way the statement is worded, it’s not even clear to me that the referendum itself was legal, but I presume it must have been since the ballot wording was so broad (it was, after all, a “public facilities tax,” not a museum tax).

For those who may not remember, the “new law” includes this language (emphasis mine):

For purposes of this Section, “public facilities purposes” means the acquisition, development, construction, reconstruction, rehabilitation, improvement, financing, architectural planning, and installation of capital facilities consisting of buildings, structures, and durable equipment and for the acquisition and improvement of real property and interest in real property required, or expected to be required, in connection with the public facilities, for use by the county for the furnishing of governmental services to its citizens, including but not limited to museums and nursing homes.

If the County is indeed required to own the land in order to expend funds on the project, this raises other questions. For instance, where is the money coming from to pay for Mark Johnson, the county’s museum consultant? And where is the money to pay for the “experienced counsel at the law firm of McDermott Will & Emery“?

I’m still wondering how they were able to apply for federal money to build a parking deck on land they don’t own without first having an agreement with the owner of the land. There’s still no redevelopment agreement, yet the County is moving ahead as if there were.

Maybe the land conflict will be the thing that finally does in the museum. Nah. Like zombies in a bad horror film, this project comes back to life every time you think it might be dead.

Peoria County, Regional Office of Education, State of Illinois

County looks for new ways to lose taxpayer money

32 Comments

It looks like the County, which has been trying feverishly to squander $40 million on a poorly-planned museum, took some time away from that project to potentially throw away another million:

Peoria County could temporarily pick up slack for the state of Illinois after preliminary approval to issue a $1 million line of credit to the Peoria Regional Office of Education to meet payroll.

In an unprecedented move, the County Board’s finance committee approved issuing the credit Thursday, though it still must be approved by the full board on March 11.

Genius! Since the taxes we pay to the state aren’t being distributed to the Regional Office of Education (ROE) in a timely manner, the taxes we pay to the County are going to be used to help the ROE meet payroll. Then, the taxes we pay to the state will (they hope) be paid back to the County plus interest of around 3%. Who pays that 3% interest? The taxpayers! Yes, when one government body charges another government body interest, what that really means is our tax money being flushed down the toilet. Since both government bodies cover the same taxpayers, we’re essentially charging ourselves interest.

The article goes on to explain what the money would be used for specifically:

Delayed payments from the state of Illinois have created a cash flow emergency in the regional office’s Two Rivers Professional Development Center, an intermediate educational service provider.

Staffers for the regional office and Two Rivers are implementing a $12 million virtual school contract with state money.

The virtual school offers 130 courses, from core subjects such as math, English and science to foreign languages, health and business online. It serves about 120 schools across the state, with about 3,000 students in public, private and home-school settings from fifth grade through high school enrolled annually.

“If we don’t get the credit, the program shuts down. We can’t meet payroll,” Brookhart said.

The Illinois Virtual School was established in 2001, according to published reports. Their website states, “The Peoria Regional Office of Education (ROE), in partnership with the Area III Consortium*, was awarded the Illinois State Board of Education (ISBE) contract to manage and operate the Illinois Virtual School (IVS) on April 1, 2009…. The Area III Consortium is a partnership of 10 Regional Offices of Education located in west Central Illinois, the Area III Learning Technology Center, Two Rivers Professional Development Center and Western Illinois University.” The ten regional offices cover the following counties: Adams, Pike, Brown, Cass, Morgan, Scott, Fulton, Schuyler, Hancock, McDonough, Henderson, Mercer, Warren, Knox, Logan, Mason, Menard, Peoria, Sangamon, and Tazewell.

Given all that, several questions come to mind:

  • Why is it suddenly Peoria County’s responsibility alone to keep this program running? Where are the other 19 counties involved?
  • Considering Peoria County is itself facing revenue cuts from the state, how is it that they think it’s prudent to cover the state’s shortfall to the ROE?
  • How is it that Peoria County can afford to make a risky $1 million loan to anyone when they spent $4.2 million more than they took in last year?
  • If the state doesn’t come through with the money, how will Peoria County be repaid? Specifically, from what revenue source will they be repaid?
  • How important is this Illinois Virtual School program? Maybe this is a program that needs to be shut down if the state is unable to pay its bills.
State Legislation, State of Illinois

Red-light camera subcommittee to meet March 2

4 Comments

State Sen. Dan Duffy’s bill to ban red-light cameras in Illinois (S.B. 2466) was assigned to a special subcommittee earlier this month. Now a date has been set for the subcommittee to meet: next Tuesday, March 2, 2010, at 6 p.m. According to a recent Christian Science Monitor article, “State Sen. Dan Duffy (R) says the bill could move to the Senate floor in two weeks.”

The bill currently has fifteen co-sponsors, including gubernatorial hopeful Bill Brady.

Television

NBC restricts online Olympic coverage to cable subscribers

4 Comments

I went to NBC’s official web page for Olympic coverage, hoping to see a replay of some of the events. Well, it turns out you can only watch those replays if you’re a cable subscriber–and not just a basic cable subscriber, either. So NBC, even before being purchased by cable giant Comcast, is now making certain web content basically an extension of expanded cable service. No use trying to watch other countries’ coverage. They block you out based on your IP’s country of origin.

What a bust. If I had expanded cable service, why would I need to watch the content on the Internet? Why can’t they offer Olympic content like they do all their other shows — sprinkled with commercials here and there to get the revenue they need? Why the need to tie the coverage to payment of a monthly fee to a cable company, denying access to over-the-air viewers and those whose cable companies don’t have a “partnership” with NBC? Even if you do have a cable subscription, you still have to go through an authentication process that is irritating in itself.

If I wasn’t already soured on NBC enough after the whole Conan fiasco, I certainly have no use for the network now. I’m sure they’ll be back in fourth place again after the Olympics anyway.

City Council, City of Peoria

Liveblogging the City Council 2/23/2010

5 Comments

Good evening, and welcome to Peoria City Hall! Sorry I wasn’t able to liveblog last week’s special meeting. I had a scheduling conflict. I was disappointed that it was carried on neither WCBU nor cable channel 22, but more on that later. For now, it looks like all council members are present and accounted for, and ready to tackle this agenda (remember to refresh your browser often as I’ll be updating this throughout the evening):

Continue reading Liveblogging the City Council 2/23/2010 →

City of Peoria

Tough questions from IFA about hotel project

6 Comments

In January, hotel developer Gary Matthews appeared before the Illinois Finance Authority (IFA). According to their website, The IFA “is a self-financed, state authority principally engaged in issuing taxable and tax-exempt bonds, making loans, and investing capital for businesses, non-profit corporations, agriculture and local government units statewide.” The IFA is subject to the Open Meetings Act, so their agendas and minutes are public information.

The IFA’s proceedings give us a bit of insight into what lenders and other governmental bodies may think about the proposed downtown hotel project since hotels are really important for people travelling, and many places have hotels or even lodges for people to stay as you can find in the Borneo Eco Tours that offer the best nature surrounded lodges for people to stay. It looks like the concerns are more than just the economic downturn:

Director Meister also noted that the Hotel Pere Marquette project will not come before the Board this month, but the project’s developer, Mr. Gary Matthews, is in attendance at the Committee of the Whole Meeting to answer the Board’s questions. Mr. Durburg stated that he was aware of the Pere Marquette Hotel project and wanted to know if it would be appropriate to ask tough questions of the developer as a new Board Member. Dr. Herrin emphatically stated that it was not only appropriate but Mr. Durburg’s duty as a Board Member to ask tough questions of any project. Chairman Brandt explained to the Board that aside from lack of specificity on project costs, there is also a potential issue with the way this project could be perceived. The fee that the developer is requesting is large and is of concern.

Dr. Herrin agreed with Chairman Brandt regarding the fees. Dr. Herrin stated that he needed firm numbers from Mr. Matthews as to the exact project costs, and then the sources and uses. He wanted to emphasize that this would not be a conduit financing, but essentially a commercial loan to EM Properties.

Chairman Brandt clarified for the rest of the Board that if this project is approved as presented; it would allow the developer to take as much as $9 million in fees out of the project at the completion of construction. Mr. Durburg offered his assistance underwriting this project as he has experience in this field. He also asked if this project would result in other hotels in Peoria closing.

Chairman Brandt explained that the Hotel Pere Marquette is an important civic facility that acts as the main event venue for the area. The project is also part of a downtown redevelopment plan for Peoria. Chairman Brandt cautioned that the State of Illinois has a history with hotel developments that is not positive and the IFA must avoid any similar entanglements.

That was just introductory. Later in the meeting, they dealt at length with this project:

No. 4: EM Properties, LTD (Hotel Pere Marquette Project)
Request for the preliminary approval of the issuance of taxable bonds backed by the “additional security” of the moral obligation of the State of Illinois. The moral obligation financing will finance a portion of the energy efficient upgrades of the 270-room historic Pere Marquette Hotel that will be renovated and converted to a Marriott and a “to be” constructed 180-room Courtyard. The development is located in downtown Peoria on Main Street two blocks from the Caterpillar world headquarters. The developments adjacent and will be connected to the skywalk to the Peoria Civic Center. Proceeds will be used to acquire the land, rehabilitation of the Pere Marquette Hotel, construction of the 180-room Courtyard Hotel, construct the parking desk, pay costs of issuance and fund capitalized interest and bank fees.

Mr. Bill Claus, Funding Manager, introduced the Board to Mr. Gary Matthews, the project developer; and stated that Mr. Matthews attended the meeting to answer questions regarding his project. He clarified that the project had already been pulled from the agenda and would not be presented for approval this month.

Mr. Matthews stated that he understood the Board was concerned about the developer fees for his project. Mr. Matthews explained that the fee was only 9%, well within the industry average of 7 to 12%. He added that he would still be willing to compromise on the exact number or timing of the fees.

Mr. Durburg asked Mr. Matthews how he could reconcile the supply and demand in a small area such as Peoria, where most of the major economic agents (i.e. Caterpillar) are suffering from the economic downturn. Mr. Matthews responded that the nearby Embassy Suites hotel has had four rate increases in the recent past. He understands that that project is doing very well, despite the economy. Mr. Mathews stated his belief that older hotels are suffering in this economy while the newest hotels in any area are not. Mr. Matthews stated that Peoria is lacking new, quality hotel rooms. He believes that with Marriott’s 30 year management agreement, along with several other factors, this property will succeed.

Mr. McInerney asked what the “per key” value of the Embassy Suites was. Mr. Matthews responded it was between $170 and $180 “per key”. Mr. McInerney requested an explanation of why the Embassy Suites’ per key rate was lower than the Hotel Pere Marquette’s. Mr. Matthews explained that the Hotel Pere Marquette project also includes an elevated walkway to the Civic Center and a 500 car parking lot that the Embassy Suites does not have.

Mr. Durburg asked if the project was contemplating any sort of agreement with Caterpillar for rooms. Mr. Matthews stated that Marriott was not interested in that sort of arrangement as they want to remain flexible. Mr. Matthews is not concerned, as Caterpillar has a long history with the Pere Marquette given the fact that their international headquarters and training center are within a few blocks of the hotel.

Dr. Herrin added that St. Francis Hospital will be developing a new children’s hospital across the street from the proposed project. This is expected to be a premier children’s hospital with people traveling from far away to receive treatment. This may be positive for the Hotel Pere Marquette. Mr. Matthews pointed out that this project was structured by Marriott based on its analysis of the market. This project includes the Hotel Pere Marquette as a full service property and the yet-to-be-built Courtyard by Marriott property will be special service.

Mr. Durburg asked if the first mortgage on this property will be non-recourse. Mr. Matthews responded that it was recourse debt to him, personally. Mr. Durburg then asked if Mr. Matthews had prepared a pro forma for occupancy over the first few years. Mr. Matthews responded that he could not off the top of his head, but that he believed that Marriott had prepared and submitted that report. He believed Marriott projected 73% occupancy for the Courtyard and Pere Marquette in the first few years. The breakeven point for the project is 50% occupancy for the Pere Marquette and 53% for the Courtyard by Marriott Hotel. This data is based on three different feasibility studies that were conducted.

Dr. Herrin asked if the IFA had all of these studies. Mr. Matthews responded that he believed the IFA did. He added that Marriott disagreed with one of the studies that suggested both hotels be full service. Mr. Claus added that the IFA will need an “as built” study as well. Mr. Durburg then asked what the occupancy rate at the Embassy Suites was. Mr. Matthews stated that December was not a good month for the Embassy Suites, but that other than that occupancy has been high. Embassy Suites has projected that January through February will be rough as well but that occupancy will pick up in March with March Madness. It is currently at about 45%.

Mr. Durburg pointed out that to break even, the project must have 50% occupancy and the projections are for 73% occupancy. He asked how Mr. Matthews could account for that.

Mr. Matthews stated that the project will have other sources of revenue including shops, restaurants and the parking deck. Mr. Durburg asked if there would be a need for the additional parking. Mr. Matthews explained the site lay out and adjacent businesses on a large scale map of the proposed development, clarifying the need for additional parking.

Mr. Durburg then asked if Mr. Matthews will be competing with the Embassy Suites hotel. Mr. Matthews responded affirmatively.

Dr. Herrin stated that he would like Mr. Matthews to prepare a finalized total project cost, including acquisition and renovation, as well as a list of the pledged financials. The IFA can then determine if it is possible or appropriate for the IFA to fill any gaps in total financing.

Mr. Matthews explained that the City of Peoria will not close on the funds they have pledged until a guaranteed construction cost agreement has been reached with a contractor. This cannot be completed until the design for the project is completed, which is still in process.

Mr. Durburg asked who currently owns the Hotel Pere Marquette. Mr. Matthews responded that it was a long established partnership. Dr. Herrin asked if Mr. Matthews would be able to break down and identify the actual costs of the project. Mr. Matthews stated he would be able to in two to three weeks.

Chairman Brandt stated that the State of Illinois has not had a positive experience with hotels in the past, which could create problems for this deal. He added that while that alone is not a reason to forgo this project, it is an excellent reason to proceed with great caution. Chairman Brandt stated that the other primary concern for the Board is the lack of certainty on numbers. The IFA will need a final project cost before we can proceed any further.

Large developer fees, “lack of certainty on numbers,” extremely high occupancy rate projections — these are the kinds of questions the IFA had for the developer. Nobody called it a “wonderful development,” incidentally. My guess is that other lenders had the same kinds of questions.

The next IFA board meeting is Tuesday, March 9, 3 p.m., at (are you ready?) the Pere Marquette Hotel in Peoria. The agenda hasn’t been posted yet.

City of Peoria, Internet, Peoria County

Peoria to try to woo Google

10 Comments

From a press release:

Mayor Jim Ardis will hold a news conference on February 23, 2010, at 1:30 p.m. The news conference will be held at the PeoriaNEXT Innovation Center (801 W. Main Street, Peoria). The Mayor will be joined by community leaders to discuss our efforts to submit an application to become a test market for Google.

County Board member Merle Widmer has some additional information on his blog, including an e-mail from Mayor Ardis:

As you may have recently seen, Google announced an effort to bring 1GB Internet service to a test market somewhere in the United States. This would be a phenomenal service that would deliver speed up to 100x faster than the best current system available. The impact on economic development will be enormous.

You might also have seen me talk about the importance of this opportunity to Peoria. The City of Peoria has started an application and has now joined the County of Peoria in working collaboratively.

You can read the rest at Merle’s blog, but you get the idea. Here’s some more information on Google’s effort from their official blog.