Thursday, December 11, 2008

Pere Marquette Hotel's Recent History

Back in 2004, the Pere, with State Representative, Dave Leitch, backing the hotel owners who sought the city's guarantee of a $5 million loan towards the Pere's promised $12 million renovation. Leitch, was an officer at National City Bank who was trustee for the bonds on the Pere. One of the Pere's Kansas City based owners was quoted in the JS 9/18/04 said that "we would look good to them (for the private borrowed money of $7 million) because they have been a good bank to work with". Leitch was upset that he was questioned by some councilpeople as to why he didn't disclose his relationship with the bank while negotiations were going on.

Yet, as reported by Matt Buedel of the JS on 1/31/04, "Pere doesn't need saving", this hotel does not need saving, quoting Bill Carter, General Manager of the Pere, "we just completed one of the best years we've had since 1999. We are in need of updating but we need to know where the city is planning in the way of other developments and how these developments will impact our hotel. We are confused with what Mayor Ransburg is saying that business at the Pere is failing and city intervention is eminent."

Leitch said he was "bewildered" at so much venom against this proposal "when our friends in East Peoria are spending $26 million in public funding and our friends in Normal are spending $17 million". Leitch continued that the owners never made a dime on the Pere, paying $3.2 million in property taxes, repaying of a $2 million federal grant plus $o5 million in municipal taxes, not counting state rebates".

Possibly part of the council's wise decision was that the Pere had already defaulted on a $229,000 unsecured loan taken out in 1998, (10% a year interest never paid) and were in default of lease payments on the $500,000 parking deck the city had built for them.

On 5/13/05, The JS reported that the $229,000 was paid back to the city but did not say that the $140,000 in accrued interest was paid back. Also the Pere would buy the city owned parking lot for $500,000 in 5 equal installments and the first one of $100,000 had already been paid. (At this time there still should be $100,000 due the city next year??)

On May 12, 2005 Paul Gordon wrote "Hotel's upgrade a private venture". No public money would be used. The owners said the "money was in the bank".

Paul Gordon, JS, columnist wrote in May of 2005 that "Five banks, state, lend money
for Pere work (renovation). Work will start in June". A promotion piece sent out by the Pere on June 2, 2005, on $6 million Renovation and Modernization "is phase one of a $12 million project". Don Welch joined the Pere as V-P of Operations while Bill Carter will run the daily operations of the hotel.

Now that the taxpayers were out of the equation, I stopped following Pere activities. If the $12 million was spent on renovations would mean these renovations are only 3 years old.

The JSEB solidly supported the view that NO taxpayer money go into this project but was in solid support of a new downtown hotel as long as the risks and the costs were borne by the private sector.

Amen.

My nex blog will examine the new $102 million dollar downtown Marriott hotel, who apparently bought the Pere and try to confirm my figures that ONLY $700,000 will be invested by the private investors.

Hmmmmmmmm.

Please correct any errors. I can only assume the renovations took place as I do not visit the facility.

2 comments:

Karrie E. Alms said...

$700,000 would work out to be about .68% of an $102 million project. Hum, where can the little guy get that type of help?

Merle Widmer said...

I believe private investment is more than $700,000 but with no personal guarantees.

The county may get some money back on a loan we made to a going bankrupt company due to my insistence we get a "personal" guarantee of the loan. MAY put us in fron of the banks I'm told.

We are ususally in 3rd position.