Daily Archives: March 12, 2010

City of Peoria, Peoria County

Firefly closes, taxpayers left holding the bag

18 Comments

In May-June 2007, the City of Peoria and Peoria County pledged a combined total of $6.6 million as a guarantee for a loan from National City Bank to Firefly Energy, the darling Caterpillar spin-off and “poster child” of PeoriaNext. The source of the funds breaks down to $3.3 million in utility tax revenues from the City, $1 million in Keystone revenue and $2.3 million in Personal Property Replacement Tax Revenue from the County.

Today, WEEK-TV reports that Firefly is closing down its operations and filing for Chapter 7 bankruptcy. That’s not like Chapters 11 or 13 where they reorganize. Chapter 7 means they’re kaput and they will be liquidating their assets, and that means taxpayers are on the hook.

[Firefly’s CEO Ed] Williams said, “After 15 months of unsuccessful attempts to raise $20 million in equity capital, in the midst of this world-wide financial crisis, funds that would have enabled the Company’s transition to full production and commercial sales, the Firefly Energy Board has decided to cease operations and voluntarily file for Chapter 7 bankruptcy.”

So, what happens to the taxpayers? The City and County released the following joint statement:

In May 2007, following the significant investment of the private sector and the state and federal governments, the City and County of Peoria unanimously joined in a community partnership to guarantee a $6 million loan to Firefly Energy, Inc. by PNC National City Bank. Unfortunately, after 3 years of extensive efforts to make a commercially-viable alternative to the traditional lead-acid battery, Firefly has not been successful. Along with our state and federal partners, the City and County did everything we could to help Firefly succeed and bring technology-centered, specialized manufacturing jobs to Peoria. It has long been a goal of both private sector and government in the Peoria area to take ideas spun off from Caterpillar to create jobs and commerce in the Peoria area.

As guarantors, the City and County are determined to exercise their full legal rights to protect their interests. In the worst case, the City and County might lose their $6 million guarantee. In the likely case, the governments will pursue by legal means the pledged collateral, the physical and intellectual assets of Firefly Energy, Inc., to reduce any investment losses that may be realized by the City and County. We believe that the value of these assets is considerable and will reduce any amounts that may need to be paid by the City and County as guarantors. Furthermore, we expect that the lender PNC National City will fulfill its legal obligation under the loan agreement to protect the interests of the guarantors and maximize the value of the collateral. Again, the City and County intend to exercise their full legal rights to protect the interest of the tax payers of the City and County of Peoria.

Not to be nit-picky, but the guarantee was for $6.6 million — $6 million for the loan, and $600,000 to cover accrued interest. Regardless, the bottom line is that it’s going to cost taxpayers. Four million dollars of the loan was to be used for equipment, and the rest for working capital. So it looks like we will be on the hook for a sizable chunk.

I love how they are saying they intend to “protect the interest of the tax payers.” You know what would have really protected us? Not guaranteeing a $6 million loan for a risky start-up business in the first place.

Not quoted anywhere is Rep. David Leitch, the former VP at National City who is credited with orchestrating the public-private partnership. He was quoted in the Journal Star back in 2007 as saying this deal was “the most exciting thing Peoria had done since building the Civic Center.” But my favorite quote was what he said after the City approved its half of the guarantee: “This will be a moment we can all look back on and say, ‘Wow.'”

Well, he was right about that. $6.6 million potentially down the drain. Wow.

General News

Fresh Market to open in Peoria

12 Comments

The Journal Star reports that The Fresh Market is going to open a store in Westlake Shopping Center in the former Circuit City space. Fresh Market is a “specialty grocery store chain” based in North Carolina, and is similar to Whole Foods and Trader Joe’s. Their prices are high, but so is the quality of their food. Many in Peoria have stated they want to have a gourmet food store like this, so I’m happy to see one is finally opening in the area.

On the other hand, they apparently require a very large sign in front of their store, and don’t want to screen their dumpsters (see Item 4, 2/23/10 City Council meeting). That’s regrettable.

Peoria Journal Star

Psst! Hey, Journal Star staffers, past and present!

39 Comments

Have you heard about this story?

Cathy Gilbert, the managing editor of a small newspaper in South Carolina . . . not only quit, she also took her entire staff of employees with her to start a competing paper in Manning, S.C., according to a WLTX, a TV station in Columbia.

Just imagine if all the Journal Star employees — those still working as well as those who have been let go over the past several years — all banded together and started their own cooperative newspaper to compete with the Journal Star. It’s so crazy it just might work. Who wouldn’t abandon the GateHouse-Media-ravaged Journal Star for a superior new paper with all the knowledge, experience, and contacts of established beat reporters, editors, printers, sales agents and webmasters? Who wouldn’t want to pick up a paper that is locally-owned and customer-focused? Who wouldn’t want a paper with enough reporters to adequately cover the tri-county region and beyond? I think the community would flock to it.

A revolt would be good. GateHouse can’t compete against you. Start having some secret meetings, put a business plan together, and set a date for the big departure. Peoria deserves a better newspaper than GateHouse is providing. The men and women at the Journal Star deserve a better employer than GateHouse. Don’t say it can’t be done. You can do it!

City of Peoria, Peoria Police

Despite promised enforcement, jaywalking tickets tossed

29 Comments

Students were ticketed for walking in the middle of the street near Manual High School again. And once again, Police Chief Steve Settingsgaard is tossing out the tickets. But I was intrigued by this statement at the end of the article in the Journal Star:

Settingsgaard said he is looking for better long-term solutions than issuing tickets. He has asked City Manager Scott Moore to investigate possibilities, particularly along Wiswall, that would provide a safe place for students to walk.

“One possibility might be to create a pedestrian/bicycle lane on one side of the street. This could potentially alleviate the problem without the tremendous expense or installing sidewalks/curbs/gutters.”

Some thoughts:

  • How many sidewalks/curbs/gutters could we install for $39.3 million — the amount the council is desperately trying to put in Gary Matthews’ pocket? I guess a skywalk between the Pere and the Civic Center is more important than the safety of our city’s children. We keep spending money hand over fist to lure the ever-elusive tourist while our basic services disintegrate. You’d think the big push for the census would remind City Hall that residents are important, at least in terms it can understand — money. The more population we have actually living in Peoria, the more revenue we get from property taxes and federal/state appropriations. But if we keep treating our residents as second-class citizens and catering to the Almighty Tourist, it should come as no shock that people will choose to live in surrounding communities where they are more valued.
  • While the city has a responsibility to provide for the safety of children, these students nevertheless also must bear some personal responsibility. In the absence of sidewalks, they should be walking next to the shoulder, not walking down the middle of the road obstructing traffic. The last time students were ticketed, they got their tickets thrown out only if they attended mandatory school assemblies where police officers and school officials tried to give students a “better understanding of the rules.” Furthermore, Settingsgaard said at the time — and this is a quote from the 2007 press conference announcing the jaywalking tickets would be expunged — “there will be enforcement in the future.” Now we learn there will be no enforcement, no assemblies — no accountability or consequences of any kind. What message does that send?
  • I wonder how the police officers feel who gave out the citations. Having their Chief throw nearly all the citations out after he had said there would be enforcement in the future certainly sends a mixed message at best. It also might make me wonder what other laws the Chief would like not to see enforced, and for which people.