The City Council is voting on a revised redevelopment plan tonight for the undead Wonderful Development. This new plan not only gives the developer $29 million, but also loans him an additional $7 million because he couldn’t get all the private financing he needed.
So the question is, where is this $7 million coming from? I mean, did you know that the City had $7 million sitting around in a pot somewhere? Well, they do … in a retiree benefits fund. According to the council communication: “the City will provide the developer with a 25-year $7 million loan (the ‘Project Loan’) at 7% interest from the City’s Post Employment Benefits Reserve.”
The City is required to keep this Post Employment Benefits Reserve by an accounting regulation known as GASB 45. The idea is that the City should be socking away money now for the health benefits they are obligated to pay in the future to retirees. Of course, the City doesn’t fully fund the reserve. They can’t afford it. So they’re listing an increasingly large unfunded liability on their balance sheet each year.
Now, to make matters worse, they’re going to take what money they do have in reserve and loan it to Gary Matthews to build a hotel downtown — at no interest for the first two years or so, then at 7% interest after that. But here’s the kicker: this loan would be in the third position for repayment. In other words, if the project were to go bankrupt, the banks would get paid back first, then the owners of Big Al’s (who are loaning Matthews money as well), then the City. The City’s loan is subordinate to two other creditors, so the odds of the City getting paid back in the event of default are nil.
Of course, this is just the latest injustice regarding this deal. There still is going to be a $29 million gift to the developer, courtesy of your future tax money. This publicly-subsidized hotel will be competing with other private hotels downtown, giving it quite a competitive advantage. Meanwhile, our taxes (or “fees,” if it makes you feel better) are going up and the City is going deeper in debt, even as our city faces serious public safety issues and its infrastructure deteriorates.
Peoria, your tax dollars are being misused. Does anyone care? Anyone? If the Occupy Wall Street supporters really don’t like money being taken from the 99% and given to the 1%, they should be against this deal. If the Tea Party supporters really don’t like bigger government and support the free market, they should be against this deal. Where are they? Where are you? Rome is burning while you’re fiddling.ikoni
@aaron. I don’t blame voters. Like many, I’ve been duped by local leaders in the past and have suppported some where I should have supported others. However, I do beleive people should be contacting their local leaders on issues of concern and letting them know where they stand. Would it have made a difference if several hundred angry Peorians had shown up at City Hall to protest this bad hotel project? If several thousand angry Peorians had written or called the Council in the days leading up to the meeting? I’d like to think it would. I applaud your efforts to change things. Too few are willing to speak up,thinking it does no good. I know the senior home on the corner of War and Sheridan was voted down- even by developer tool Spain- because of concentrated citizen outrage. It does work. I won’t stop letting the Council know what is on my mind and I hope you don’t either.
Good lord, the senior home was voted down because and only because the journal star just nailed Spain for his never saying “no” to a developer. Had that vote occured two weeks later, that building would be built. BVA desperatly needs votes from the shifting district, hence getting a 1/4 of million public $ to replace sidewalks that were in pretty good condition to begin with. W. Bluff must be furious because they have been the cash hog for the district for years, hence the meetings to keep staggering around the district. Riggenbach, does what he is told to do, no more, no less. No independent thinking for the best interest of his constituents. Clyde will openly vote on a project for which his company has bids. The push for 8 or 10 district reps will be a huge mistake. The district reps won’t question anothers district project and there have been huge lies pushed during council discussions. At larges are kept deliberately weak be the districts and the mayor. That is the flaw in the system.
It would not make a difference if people rallied against the hotel project. There were calls and emails. They don’t care. They have campaigns to fund. There was every intention to pass it as is the intention to drop more of our money into the warehouse district. People fall for pretty boys on campaign literature, or promises of fixing one way streets when the over whelming evidence is to the contrary that those promises will be honored. My understanding is that many on the council are not accepting calls from neighborhood leaders.
Aaron,
you are correct about the well dressed vampires. The economic development department is being dismantled. Guess who will be taking the city’s funding. Heartland Partnership and guess which councilman is spearheading that initiative behind the scenes. HP ran the ads for the museum scam and if you watched the news on that election night, Spain was at his computer. He is about using tax dollars for pet projects.
I agree that the election and PJS criticism of Spain were factors in voting the senior home down, but so was the highly organized mass protest of the affected residents and community. The votes of the various council members shows their mostly self-serving agendas. No doubt hotel supporters will hep fund district campaigns next year. BVA, Gulley, Riggenbach, Irving, Spears and Ardis are up for re-election next year. Hopefully, the voters will ignore the pretty boys on campaign literature and empty promises and take actual voting records into account when making their decisions. I know I have no intention of being fooled again.
Aaron, I don’t know what you’ve been smoking, but I think you are way off the rails. Stinnett, Fred Smith, C.J. Summers, Karrie Alms, Merle Widmer and others who have posted here have all had the guts to stand before the City Council and speak their minds on this heinous hotel project, as well as other bad Council schemes. They are on record with looking the Council members in the eye and telling them that they are going in the wrong direction, while you are anonymously whining on a blog. I think you should be the one to F**k off! You might want to take into account that those who are for you are not against you. Checking for Details, you might want to check your attitude at the door, as it could use improvement. I agree that the Council counts on citizen apathy and ignorance, so they can pull their crap. Citizens should be encouraged to step up and call the Council on their misdeeds. Here’s a detail for you to check- This kind of crap only goes on as long as the majority of citizens stay quiet and allow it to happen. They can and should be voted out.
dearest sooth, I am not checking anything at the door. It’s about time the truth be discussed behind these deals and behind the votes. The reality is that the majority of the citizens have no idea what is going on. They are simply trying to make ends meet and live normal lives. Still others live to have fun on someone else’s dime and they could care less as long as the checks keep coming. Many rely on the media, which at times can be accurate, but the money spent on reinventing the truth with campaign mailers is a significant amount and reaches a number of people. The only way to fight that is the same amount of funds and correcting the distortions. I am not talking about a smear campaign, but one with the honest story. example, one candidate bragged in a mailer that he revamped the youth commission. The implication was that this commission was revived and active in influencing the council etc. The reality was, it never got off the ground. That went unchallanged. If you bring items up at forums it’s only the same 2 dozen people that go to each one, so no challenges there.
A mug shot
A perk walk
A new life behind bars
The supporters of the hotel project on the council have not been transparent in events surrounding it or rationalized their support of it to the public. In the last election I voted against each of htem who voted in support of it, and in my mind nothing has changed. I support hotels and skywalks down downtown, but this whole thing smells rank from a mile away.
http://www.pjstar.com/news/x1931302875/Ardis-blasts-Quinn-on-jobs
I can’t even begin to address the hypocrasy of this article. COP, flat broke, cutting jobs, robbing the pension fund to pay a developer for a pet project, dumping $3.8 million at least, into the warehouse district when crime is hitting people hard, gifting money to a developer that can’t get his act together for short term union jobs, but failing to produce family wage jobs when these projects are done. No one from this council should be blasting anyone as the same hinky financial practices which are done by the state are playing well in Peoria. All we need now is Spain to jump in to say how crucial these projects are (while ignoring public safety) Please come to voters lad telling them that your 10 second thought on not paring down code enforcement matches the months you have spent spinning tax dollars into gold for your buddies. Who buys this bullshit?
Makes you wonder if Ardis is positioning himself to run for some other office. He’s having a fund raising event when Mayor election isn’t until 2013 and he ran last time essentially unopposed.
Now that we have State Senator LaHood, look for our Mayor to position himself as Leitch’s heir apparent, or worse.
@prediction.
its perp walk and who are you predicting jail for?
@prediction.
its perp walk and who are you predicting jail for?
how does that sound?
Well, the Pere closing has a deadline of 1/31/12 but Matthews said he would close by year end. Anybody hear anything?
I just moved from Peoria to Minneapolis. They don’t misuse tax funds here at all. Unlike Peoria, they have an adequate number of police, fire, and garbage workers, outstanding public transit (which has incredible economic benefits), good roads in spite of bad winters, and very few signs a recession ever happened, let alone is still going on in many parts of the country including Peoria. Unlike Peoria, there are tons of thriving locally-owned businesses, small businesses which are obviously the engine that creates living wage jobs as opposed to the Walmart-or-nothing employment situation that exists for anyone without health care industry credentials and experience. It has reached the point where Peoria is another Detroit, a burned out old industrial city run by corrupt, self-interested public officials with shady connections to even shadier developers. Right wing religious extremists, gangbangers, very old people without the money to retire to a better place, and very poorly educated Caucasians from the surrounding rural areas are the only ones who will live in a dump like Peoria in its current state. Anyone with education or ability who does not fit into one of these categories gets OUT and the brain drain is obvious not only from the harebrained schemed cooked up by the city council but also by the lack of forceful population from a borderline illiterate, Faux News “educated” populace. My advice to all of you still trapped is get out ASAP, before the race wars start there.
Buh-Bye Greg. Peoria never liked you either.