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?