Friday, November 28, 2008

PPD - RiverPlex Saga, Part 2

In August of 1999, the PPD pledged $10 million toward the estimated $19.5 million construction cost. This pledge along with $5 million pledged from the Bielfeldt foundation, brought the figure to $15 million or a shortage of $4.5 million. A major hospital had committed $4 million to be used for lease space paid out over 10-20 years for a Fitness Center with profits or losses to be split between the park and the hospital. When contributions didn't arrive as planned, the PPD asked that this $4million pre-paid rent, be committed to the construction costs; it was, 12/15/99, JS by reporter Anthony Smith to which the hospital agreed bringing the funding pledged for construction to $19 million and with other funds raised or pledged, allowed construction to begin.

The contract between the hospital and the PPD called for a clause allowing and out for OSF by issuing notice of 180 days. Profits and losses were to be split evenly. I heard but cannot confirm that there was a misunderstanding of what constituted "costs", however, the Fitness Center thru 2007 had not shown any profits to be split. Only substantial losses as shown on yearly PPD Financial Statements.

On 12/31/2002, a PPD document shows that the OSF/PPD Fitness Center contract was for twenty years and could only be terminated by mutual agreement. The contract also called for payments by OSF to the PPD of $25,500 per year for 20 years. The contract also called for the City of Peoria to operate and maintain the parking lot for $48,600 per year. Records indicate that this cost along with the principal and interest on the $10 million bond is not being charged against the RP balance sheet.

The PPD $10 million pledge towards the RP was in the form of a 20 year bond with principal and interest costs of approximately $850-875,000.00 a year. PPD officials said repeatedly that the principal and interest was to be paid by RiverPlex revenues and the tax base, TAXPAYER dollars. However, in year 2000 in an article in the JS, Park Board Treasurer Roger Allen, when pressed by Gary Sandberg, would not say "unequivocally" that the RexPlex will generate enough through user fees to pay for both operating costs and debt payments. This contradicted what President Cassidy said in 1998 and 1999 and reported in the JS and on this site.

Once the RiverPlex was built, President Cassidy said that it was "always the intention and "policy" for the PPD funds, not the RiverPlex, to pay the principal and interest from other funds". Interesting.

JS reporter Jennifer Davis, (now Stevens) wrote on 6/16/99, that "Projections put the RecPlex in the red", but with profits of $515,494, in the 5th year (with 5000 memberships) (2005), of $515,494.00.

According to a park official, 2005 and 2006 operational profits allowed the PPD to contribute $240,000 and $318,000, toward the RiverPlex debt of principal and interest payments of $875,000 - $875,000. These were the first years any part of the principal and interest payments were generated by RP operations. No comment was made about 2007 results. The total of the payments are $558,000 leaving a shortage in just these two years of $1.2 million and not a $515,494 profit or more as projected. Quite some misses and these figures are just principal and interest missed projections and do not cover joint OSF/PPD Fitness Center losses or expenses accrued by the RP and picked up headquarters.

Also, in 2002, the PPD subsidizing the now RiverPlex by at least $301,899, (the name being changed by the PPD because of "bad publicity"). In year 2004, the PPD subsidized the RiverPlex $200,000 for Operational Support and equipment.
Smaller amounts are subsidized such as roof repair, equipment replacement almost each year and just recently, as reported in the Times-Observer and the JS, new XR Games not yet available for use. At the last PPD Board Meeting, $56,000 was "loaned" to the RiverPlex for this potentially worth while project. If the RP is making a profit why the "loan"?

Wasn't the downtown privately owned now bankrupt IN-PLAY in many ways, similar?

Now, back to "Some taxpayer money?" Quite a bit. Plus the PPD receives considerable grant money such as the commitment of the IDNR in 2006 to pay for half of the additions to Peoria Stadium IF and when the project (bids were due September 4,2008) is ever developed....

Some people seem to forget that almost all grant money is funded by people paying taxes. Why, like a credit card charge, these to be "must be repaid someday" expenses are "sort of" buried deep in one's mind as maybe not real or a "pass go" bonus will arrive in the mail?

Move now to Part 3.

1 comment:

Karrie E. Alms said...

Ah yes, the famous opt out clause ....
"The contract between the hospital and the PPD called for a clause allowing and out for OSF by issuing notice of 180 days. Profits and losses were to be split evenly."

Which was agreed to at the IHFPB hearing by Bonnie Noble and Sue Wozniak prior to any public discussion or vote by the PPD Board. Just gotta love no public input, no elected official input and signing a blank check from the taxpayer checking account by directors of public bodies and private individuals.

Oh, and I have the official transcript of this meeting and the finally approved opt out document to substantiate my statements.

Have the rosey proforma with the projections which did not pan out too.