CAT stock is going down due to a downgrade by UBS AG, reports the Chicago Tribune:
Caterpillar stock retreated $2.46, or 3.1 percent, to $77.99, on the New York Stock Exchange, its largest drop since Feb. 27…. [New York-based analyst David A.] Bleustein reduced his rating on the stock to “reduce” from “neutral” and the price he expects the shares to reach to $70 from $78.
In today’s installment of “Cat Logic,” we turn to Steve Tarter’s column in today’s business section of the Journal Star titled, “Destination Downtown.” I was unable to find it on the web for linking purposes, but here’s the gist of it:
Caterpillar Inc. hired Walker Parking Consultants (wow, a whole company dedicated to parking consulting — what a fascinating job that must be) to look at “a 13-block Downtown area that includes the former Sears block site for Caterpillar’s visitors center.”
Their findings? There’s a surplus of parking, and it’s anticipated that there will be a surplus of parking in the future:
In an area along the river bounded by Adams, Fayette and Harrison streets, consultants determined there were 5,011 parking spaces available with the highest use coming on a weekday morning when 64 percent of the spots were occupied. The lowest use came on a Saturday morning when only 15 percent of available parking was used.
Now, how would you, Average Joe, interpret those findings? If it were me (and I’m no high-paid executive or parking consultant), I would say we don’t need any additional parking created downtown. If, at the very busiest time of day less than 2/3 of the parking is being used, I’d say — we’ve got this problem licked. We’ve reached a saturation point; no more parking needed. Done.
What does Cat say?
Despite the finding, Caterpillar is looking for more parking at the location. “There’s a great deal of unused parking in that (Downtown) site. But Museum Square will depend on convenient parking of those visitors,” said Mark Johnson, Caterpillar’s project manager; referring to an underground parking garage that will add $3 million to the project cost while providing space for 189 cars.
Huh? Now, think about this a second. At the busiest time of any given week, not more than 64% of 5,011 spaces are being used. That means there are at least 1,804 spaces available within a 10-block area downtown at any given time. But Cat believes that the this site’s success will “depend on” having 189 more spaces (at about $15,873 per parking space) immediately on site. I’m gonna go out on a limb here and say a Six Sigma black belt hasn’t been working on this project.
Incidentally, note the central location of Museum Square in the study area:
All the parking in the 10-block area — between 1,804 and 4,259 empty spaces at any given time — is within two blocks of Museum Square. In fact, the majority of it is within one block. But according to Cat, that’s not good enough.
This is a colossal waste of money on top of an already flawed design for the Sears block. The Heart of Peoria Commission, which has been saying all along that we don’t need more parking downtown, has been vindicated by Cat’s own independent consultant’s study. But it doesn’t matter. Cat will continue on their present course, undeterred by the facts.
PEORIA, Ill. – Caterpillar Inc. (NYSE: CAT) has reached an agreement to acquire Progress Rail Services, Inc. (Progress Rail) for $1.0 billion in cash, stock and assumption of debt. Progress Rail is majority owned by One Equity Partners, a private equity affiliate of JP Morgan Chase & Company, Inc.
Based in Albertville, Alabama, Progress Rail is a leading provider of remanufactured locomotive and railcar products and services to the North American railroad industry. With 2005 sales of $1.2 billion, the company has one of the most extensive rail service and supply networks in North America. It operates more than 90 facilities in 29 states in the United States, Canada and Mexico, with about 3,700 employees.
Wouldn’t it be great if a new facility were to open in Peoria, say maybe in Growth Cell 2? As long as Peoria keeps trying to kill the Kellar Branch and rely solely on Union Pacific service from the west, it ain’t gonna happen.
Last night, the Peoria County Board voted 12-6 to deny Peoria Disposal Company’s (PDC) hazardous waste landfill expansion application. Opponents cheered, proponents were disappointed (if not a little bitter), PDC is planning to appeal to the Illinois Pollution Control Board.
But I think regardless of how the appeals come out, it’s time we all got on the same team and started seriously researching alternatives to burying hazardous waste. It can be done. I found this interesting piece of information (PDF) on Caterpillar’s website. On page 11 of this document, it says:
We can set the example for others to follow. In 1997, an employee team at our Sumter, South Carolina, facility set out to develop a process that would, for the first time ever, recycle 100 percent of hazardous waste and totally eliminate landfill. They succeeded. It cost half-a-million dollars to do it, but the new process also saves Caterpillar more than $400,000 every year. It was the right thing for the environment. It saved Caterpillar money as well.
The first thing that struck me was the fact that this happened in 1997 — that’s almost ten years ago. Has this process been refined/improved? Marketed? Is this something that PDC and other hazardous waste landfills could employ? Or that Keystone could employ?
The second thing that struck me is that it cost “half-a-million dollars to do it.” Converting that to 2006 dollars, that’s still only $631,000 (approx.). It doesn’t sound like it takes a tremendous amount of money to find these solutions, does it? Compare that to the million dollars PDC spent just on their expansion application — let alone how much it’s going to cost to appeal the board’s decision.
I don’t think one has to be a rabid environmentalist to see the value of recycling this waste versus encasing it in concrete and burying it in the ground. Even if you’re a proponent of the landfill expansion, wouldn’t you still rather live in a world where there’s no need for such landfills?
I found this report encouraging, especially after hearing Mr. Ady’s presentation at the council meeting Tuesday night. One of the things he mentioned was the lack of buildings that can be used to lure manufacturing companies to Peoria county/city. Now it looks as though the port district, or TransPORT, has quite a bit of building space to market — the old Mapleton Cat foundry. It’s rail-served, near the river, and reasonably close to an interstate (though not ideal on that count). This could be a great opportunity for Peoria to pull in some good-paying industry jobs.
Washington Post business columnist Steven Pearlstein has some scathing remarks about Caterpillar in his Wednesday article:
It’s time for the Jim Owenses of the world to show the same backbone and ingenuity in dealing with the excessive and unreasonable demands of Wall Street that they previously showed in dealing with workers and labor unions.
Ouch!
The Heart of Peoria Commission (HOPC) is on the agenda for Tuesday night. They are recommending approval of the proposed elevations of Museum Square. But included in their request is a copy of the HOPC’s meeting minutes, and they reveal something of Caterpillar’s mindset.
Putting Museum Square parking underground is expensive. As was reported back in February, it may add as much as $3 million to the cost. At that time, the Journal Star editorialized that, essentially, this extra expense was the HOPC’s fault because they didn’t want to see another surface parking lot downtown.
Now it’s Caterpillar’s turn to play the blame game.
Despite the fact that Cat got almost everything it wanted in the museum site plan (except the surface parking lot) even though it severely compromised the Heart of Peoria Plan, and despite the fact that this project is continuing to get support from the HOPC, commission minutes reveal that Caterpillar representative Mark Johnson (Project Manager for the Caterpillar Visitor Center) wanted this line included in the commission’s recommendation to the council on Tuesday:
“The Commission recognizes that the inclusion of the underground parking structure in the site plan has resulted in a substantial increase in infrastructure development cost and urges the Council to work with the developers to adopt a mutually acceptable financing plan.”
In other words, he wanted the Commission to take responsibility for the additional parking expense on Museum Square. Why? The minutes state:
Mr. Johnson said, “I urge the Commission to step up to their responsibility, as we developed this underground parking as a part of this plan in response to this Commission’s strong recommendation; and we have to find a way to pay for it.”
Au contraire, replied commissioner Beth Akeson:
Commissioner Akeson said she was sorry the Commission has been put in the position to make it appear they are the ones that forced the issue of underground parking, when in actuality the Commission was never brought into the conversation about what its recommendation would be.
(Emphasis mine.) That’s right. It wasn’t the HOPC that came up with the underground parking idea. They weren’t even consulted.
In fact, the need for any parking on that site is questionable. Even if it could be shown that parking is needed, the bulk of the cost is not simply to put it underground per se, but to put it below the site as it’s currently designed — i.e., with the boomerang-shaped buildings. Those building designs were not the HOPC’s either.
Mr. Johnson’s amendment was defeated, but expect this argument to surface again — on the very next agenda item.
Caterpillar and Lakeview want to amend the City of Peoria/Museum Block Redevelopment Agreement. Among other things, they want to remove the $500,000 cap on TIF reimbursement. I imagine this will be the source of some discussion, as it’s the only part of the amendment that “could result in additional money being paid over by the City to the Museum.”
I have an idea. Instead of reducing the size of the museum by 15,000 square feet and trying to finagle more money from the city, why not make money and increase density by adding residential, restaurant, and retail components, like the Heart of Peoria Plan recommends? You remember the Heart of Peoria Plan, right? You know, the one the council adopted “in principle”?