I received this press release from the City of Peoria this afternoon:
Peoria, Illinois, (July 23, 2010) – We have placed on the City Council Agenda for July 27, 2010, a request for approval to satisfy the City/County obligation to PNC Bank by jointly paying $500,000 to the Firefly Bankruptcy Estate and jointly paying $2 Million to PNC Bank. We believe that this course of action will result in considerable savings to the taxpayers of the City and County of Peoria.
We would like to point out that the $500,000 settlement with the Bankruptcy Estate remains subject to approval from the Bankruptcy Court. The proposed agreement with PNC Bank and a third-party buyer also remains contingent to sensitive negotiations which are on-going. We are optimistic that those negotiations will be successful and that the Firefly matter may be resolved quickly, and that the City and County will have to pay substantially less than the $6.6 Million that had been at risk.
So, we’ll be losing $2.5 million instead of $6.6 million. I have mixed feelings. On the one hand, yes, I’m glad our losses appear to have been greatly mitigated. But on the other hand, we’re losing $2.5 million! I wonder what the City will do to make up their $1.25 million share of the loss….
Still no word from David Leitch.
Double down?
I was at the council meeting when this was approved. It was bad then, and it’s bad now. Who voted for this? Do you have the list from the City Council minutes?
Pastor Burnett — The City’s vote was May 22, 2007:
Sandberg was absent at that meeting. Nichting made the motion and Turner seconded it. Van Auken, Turner, and Spain all spoke in favor of the loan guarantee. “Van Auken said she supported Firefly and she said she felt it would be a successful investment.” “Turner said he felt Firefly would benefit the Peoria area and central region and would create job opportunities and investment for the community.” “Spain said … he felt Firefly would offer Peoria an opportunity to retain some research that had been established within the community, and would assist in creating a more diverse economy and provide a more desired location for technology based businesses.”
“State Representative David Leitch said he had been actively involved in the Firefly project and was excited about the project…. Leitch stated one of the important elements of the transaction would result in a very unique revolving loan between the City and the County, and that warrants pledged to both entities would be placed in a fund that was estimated to generate approximately $5 million when Firefly went public.”
The council members all had dollar signs dancing above their heads. This was going to be a big cash cow for the city! Alas, it was not to be.
Wait a minute wait a minute… we are paying off Firefly’s obligations or the City’s? I thought the guarantee was to NCB?
PNB is too big too fail? They aren’t responsible for their purchase of bad debt? This is a Caterpillar project, is it not?
We are such idiots… let’s reelect these geniuses!
Nice to see Nichting that spearheaded this “investment” is now in charge of all of the City’s money as City Treasurer. Let’s hope he has little discretion in making actual investment choices in his new role……
IF a bank won’t lend a company like this all the money, be suspicious, be afraid.
I heard Firefly’s pitch at a civic club meeting, and it was compelling. But it was just that, a sales pitch. How much did the founders of this company make or lose?
Did they loot it before it went down? Or not?
If a bank would lend it, they would not have gone to the city. It is all about risk and reward, and cities are taking the risk for the chance of a big reward.
SPAIN AND TURNER are up in the Spring! Write their names down, put them in your wallet or purse, take them into the voting booth, and send them packing!