These figures are evidently not available for public release at this time. This is a partially substantiated fact that of all the cash and pledges, only approximately $10million is in cash. In the meantime, many who pledged have withdrawn their pledges including the Bielfeldt and Ellen Foster Foundations according to museum committee members.
For the sake of transparency, perhaps the museum will release more figures and that might explain where the approximately $6 million of grants committed to the new museum(taxpayer dollar)received since the days of Mayor Ransburg were expended or how much is held in reserve for the new museum. Also where the $8-13 Endowment (5 1/2 % estimated return)is going to come from? Taxpayer dollars, if I correctly interpret.
$.25 does sound like much but it adds up to $3 million plus for maybe 20 years, money that can't be spent with the private sector, who after all, keeps this country limping along until our form of government goes totally socialistic.
Also for the person who thinks that In_Play would not have gone bankrupt if the museum had been built. Sorry, poor thinking, sir. The museum would have been in direct competition with this private entity using taxpayer dollars. Same as the museum would have been direct competition to the defunct souvenir shop.
Thursday, January 29, 2009
Dubuque Museum
Everybody who works at this museum is thrilled. They have a nice job with benefits. But financially, the nice museum which I have visited is a financial bust even though originally financed by a grant from the the State of Iowa for $50 million. The Chamber of Commerce supports the museum as do all chambers everywhere, support projects using taxpayer dollars. Since it received the large lump sum grant, it has received other taxpayer funded grants and at least $1 million dollars from the gambling boat next door. Despite drawing 301,000 visitors the first year it still failed to meet it's operating budget by $500,000. The second year, the museum drew 250,000 and the third year, 220,000. Since then, the museum will not release numbers to outsiders.
The Peoria Museum Committee gave the county a list called "Museum Benchmark Matrix" listing the attendance figures of 9 museums. Dubuque was listed but missing were attendance figures. Hmmmm. Only one museum listed figures more than Peoria and that was the Louisville Science Center at 315,000. Louisville has three times the MSA population of the Peoria area of which 83% of the visitors are expected to yearly visit the Peoria Museum.
I revisit the Dubuque Museum, I've blogged on it several times, because someone commented on the JS website that they had talked with museum officials who were pleased with their workplace.
Remember, they work for the museum. So, why do you suppose the are mum on attendance and their inability to meet operating costs without more private and taxpayer dollars?
It's a nice museum and well worth the visit. I paid $9.50 or $9.75. Peoria plans to charge less and still meet a yearly operating budget of $4.3 million.
Hmmm, again.
The Peoria Museum Committee gave the county a list called "Museum Benchmark Matrix" listing the attendance figures of 9 museums. Dubuque was listed but missing were attendance figures. Hmmmm. Only one museum listed figures more than Peoria and that was the Louisville Science Center at 315,000. Louisville has three times the MSA population of the Peoria area of which 83% of the visitors are expected to yearly visit the Peoria Museum.
I revisit the Dubuque Museum, I've blogged on it several times, because someone commented on the JS website that they had talked with museum officials who were pleased with their workplace.
Remember, they work for the museum. So, why do you suppose the are mum on attendance and their inability to meet operating costs without more private and taxpayer dollars?
It's a nice museum and well worth the visit. I paid $9.50 or $9.75. Peoria plans to charge less and still meet a yearly operating budget of $4.3 million.
Hmmm, again.
Monday, January 26, 2009
Town Hall Meeting Arranged by Shelley Epstein
The County Board votes Tuesday at 6 PM on whether of not to put the question on the ballot. Already a meeting has been called by two County Board supporters. The county board will approve the referendum with intense County involvement in ownership, ect.
A Town Hall Meeting: Peoria Riverfront Museum Collaboration and the Proposed County wide Sales Tax Referendum
Where: Bradley University, Baker Hall Auditorium B51
When Monday March 9, 2009
Time: 6:30 PM
Hosted by: Andrew A. Rand, 4th District Peoria County Board Member
Jim Dillon, 3rd District Peoria County Board Member
This important meeting will be hosted by Andrew Rand and Jim Dillon, and will feature Mr. Jim Richerson, CEO Lakeview Museum, Mr. Erik Bush, CFO Peoria County and Mr. Scott Sorrell, Assistant to the Administrator who will provide presentations on the Museum's plans and the proposed financing efforts, both public and private. This informative meeting is intended to provide information about the project.
Bradley University has graciously agreed to provide a venue for this important community discussion.
Andrew A. Rand
Peoria County Board
District 4
--------------------------------------------------------------------------------
Which stars will make the biggest headlines in 2009
A Town Hall Meeting: Peoria Riverfront Museum Collaboration and the Proposed County wide Sales Tax Referendum
Where: Bradley University, Baker Hall Auditorium B51
When Monday March 9, 2009
Time: 6:30 PM
Hosted by: Andrew A. Rand, 4th District Peoria County Board Member
Jim Dillon, 3rd District Peoria County Board Member
This important meeting will be hosted by Andrew Rand and Jim Dillon, and will feature Mr. Jim Richerson, CEO Lakeview Museum, Mr. Erik Bush, CFO Peoria County and Mr. Scott Sorrell, Assistant to the Administrator who will provide presentations on the Museum's plans and the proposed financing efforts, both public and private. This informative meeting is intended to provide information about the project.
Bradley University has graciously agreed to provide a venue for this important community discussion.
Andrew A. Rand
Peoria County Board
District 4
--------------------------------------------------------------------------------
Which stars will make the biggest headlines in 2009
Museum Projections - FACTS Don't Add Up.
Three years ago the Peoria County Board voted to contribute $100,000 a year to the new museum, payable over a 6 year period. On the recommendation of Board Member Allan Mayer, the money was to be held in a separate fund until the museum raised the rest of the money. That money, now $300,000 should be available.
On 11/21/07, the museum committee approached the county with an offer that the Museum would "construct, own and operate a $65 million museum on the museum site and Caterpillar would construct a $42 million Visitors Center on land purchased from the City of Peoria. $24.5 million had been already raised by the museum leaving a shortfall of $22-24 million". The museum pointed out statutory authority for the county to become involved in the project. I add that the county has statutory authority to become involved in schools, libraries and parks and recreation facilities. The County is already in the nursing home business and cemetery business. (Springdale).
On 11/27/07, the County Board passed a resolution that supports the "concept" of the Peoria Riverfront museum but did not specify any other support. Board Member Mayer "stated that the committee agreed that this project should be regional" and the resolution passed with 16 yeas and no nays.
On 12/10/07, the board again passed a resolution "that the County Board supports the "Concept of the Peoria Riverfront Museum and it would be culturally valuable to all of Central Illinois". "Regional" had been dropped from the wording.
On 1/07.08, the County Finance Committee pass a resolution listing (13) 2008 Legislative Initiatives to be presented in a Link-Workshop with area Springfield elected officials. Among the topics was "Support legislation that would provide a voter approved regional funding vehicle for the Peoria Riverfront Museum". On Jan 10, 2008, the full board approved the links Legislative Initiatives.
At this point, County Administration met with our area legislators in Springfield to testify support to provide a vehicle (referendum) for permission from the taxpayers to support a $.025 sales tax on public facilities generating approximately $3.2 million in revenues a year to build not necessarily a museum; in fact, the referendum will not even mention the museum, nor a nursing home, libraries and parks and recreation facilities. Yet all could be included under this umbrella referendum. The new legislation allows the County to increase the taxes, but only with a referendum, from a $.025 up to a $1.0 sales tax on later. Our Finance Committee Chairman is quoted in the JS suggesting a $0.50 sales tax. This yearly $3.2 tax collection, based on $.025, would remove buying power from this community and it;' visitors of approximately $61-68 million over a 20 year period, from this community. Laws could be changed to extend this tax by future county boards.
The gates have now been opened for Peoria County to become involved in construction. design and ownership of the Riverfront Museum. Remember, the referendum does not restrict the tax money to be used only for the Riverfront Museum.
County Administration then continued working with the Museum Committee to financially digest the projected figures to make this appear to be a more than sustainable project with a possible surplus that could be used for various other public facilities. Voters previously supported a $.025 sales tax for public safety and an $.025 property tax for Bellwood nursing home. Financial people can work only with figures presented them, in this case, projections unverifiable.
On 1/14/09, Museum Officials said that Lakeview Museum's current collection totaling 5000 sq. ft. will not be moved into the new downtown museum because certain collections need temperature/climated and security controlled storage. Since the PPD owns Lakeview Museum Building and plans to relocate park headquarters there, that is interesting because the Park Administrator said they needed at least all 32,000 sq. ft. at Lakeview. Also, I do not see funds allocated by the musuem for this climate controlled securized 5,000 ft. remaining at Lakeview?
On 1/4/09, Mark Johnson, a leading spokesperson for the riverfront facilities, said on my blog site "In your analysis of revenue potentially generated for the Museum by admissions, it appears that you fail to recognize that the majority of visitors to the Museum are assumed to be member of the Museum. These members of the Museum will support the facility through their annual membership dues. In exchange for which they will receive free admission to the museum."
In the report just prepared for the county, 2011 projections are 4500 members at an average membership cost of $75.00 for a total yearly collection of only $338,000.00 toward a $4.2-3 million operating budget. Mr. Johnson's statement doesn't add up.
On the same blog, Kathleen Woith, VP of Communications for the museum wrote "The Museums Strategic Master plan calls for 78 to 83% of visitors coming from our "resident area". Yet in the study compiled by the museum claiming $14 million in new business created by the two facilities; this study claims visitors will stay 3-4 nights in local hotels. I fail to conceive of visitors coming from, say, Bloomington-Normal spending any nights in any Peoria area hotel. In fact, the study paid by Heartland Partnership compiled by Gruen Gruen and Associates in 2003reads "interviews with representatives of museums that Lakeview uses as models, shows regional museums by themselves, generate limited hotel room-night demand. This study also indicates a a "spill-over" of sales and sales tax revenues of between $490,000-$1,350,000 million a year".
The $7 million to 14 million is a guess put in it's best light.
The report by Caterpillar "consultants" submitted in 2002, shows a spill-over of $14 million a year. Museum officials believe the spill-over will be between $7-14 million per year. The Gruen Gruen report commissioned by Heartland Partnership in 2003 shows a less than $2 million spillover. Hmmmmm.
Ken Hinton called me this afternoon to tell me that he has set a budget of $4500 for his entire school district for any type of museum visits. He said he has advised all of his teachers.
Of the nine museums listed by the Museum Committee, none except possibly Louisville, Ky. increased their attendance after the opening year. In fact, Dubuque, Iowa saw their attendance fall from 301,000 to 250,000 to 220,000 and for the past two years the Director of Development has not returned my phone calls. I note the Peoria Museum report has not filled in any attendance figures for Dubuque either.
The figures given to our County Financial Officer is what he is working with. His job is not to project attendance but to put on paper what to expect IF attendance, etc. figures are met. He uses the museums figure of $400,000 a year additional funding from fund drives etc., while the museum brochure says $500,000 needed per year. At no place do I see where the $8 to 13 million endowment is guaranteed to come from.
Now there is an economy so bad people are comparing it to the worst economic time in their lifetime. And there are no glimpses of improvement in the future. With all the other taxes coming down the stream, this is the worst time to impose another tax on the populace, especially a tax that could go from $0.25 to $1.00 without another referendum. (I stand corrected. Each increment from 1/4 to 3/4 would need to be by referendum).
I will not be supporting this referendum as the 215 page document outlining the counties involvement is a long way from the $600,000 already committed and an up or down vote for a museum tax. Nor have I seen any commitments from other communities to this originally planned "Regional Museum".
This referendum if passed, looks like a county capital expenditure "slush" fund with the count in and out of owning the museum especially after 20 years when costs of maintenance, pensions and falling attendance would be the most likely scenario.
On 11/21/07, the museum committee approached the county with an offer that the Museum would "construct, own and operate a $65 million museum on the museum site and Caterpillar would construct a $42 million Visitors Center on land purchased from the City of Peoria. $24.5 million had been already raised by the museum leaving a shortfall of $22-24 million". The museum pointed out statutory authority for the county to become involved in the project. I add that the county has statutory authority to become involved in schools, libraries and parks and recreation facilities. The County is already in the nursing home business and cemetery business. (Springdale).
On 11/27/07, the County Board passed a resolution that supports the "concept" of the Peoria Riverfront museum but did not specify any other support. Board Member Mayer "stated that the committee agreed that this project should be regional" and the resolution passed with 16 yeas and no nays.
On 12/10/07, the board again passed a resolution "that the County Board supports the "Concept of the Peoria Riverfront Museum and it would be culturally valuable to all of Central Illinois". "Regional" had been dropped from the wording.
On 1/07.08, the County Finance Committee pass a resolution listing (13) 2008 Legislative Initiatives to be presented in a Link-Workshop with area Springfield elected officials. Among the topics was "Support legislation that would provide a voter approved regional funding vehicle for the Peoria Riverfront Museum". On Jan 10, 2008, the full board approved the links Legislative Initiatives.
At this point, County Administration met with our area legislators in Springfield to testify support to provide a vehicle (referendum) for permission from the taxpayers to support a $.025 sales tax on public facilities generating approximately $3.2 million in revenues a year to build not necessarily a museum; in fact, the referendum will not even mention the museum, nor a nursing home, libraries and parks and recreation facilities. Yet all could be included under this umbrella referendum. The new legislation allows the County to increase the taxes, but only with a referendum, from a $.025 up to a $1.0 sales tax on later. Our Finance Committee Chairman is quoted in the JS suggesting a $0.50 sales tax. This yearly $3.2 tax collection, based on $.025, would remove buying power from this community and it;' visitors of approximately $61-68 million over a 20 year period, from this community. Laws could be changed to extend this tax by future county boards.
The gates have now been opened for Peoria County to become involved in construction. design and ownership of the Riverfront Museum. Remember, the referendum does not restrict the tax money to be used only for the Riverfront Museum.
County Administration then continued working with the Museum Committee to financially digest the projected figures to make this appear to be a more than sustainable project with a possible surplus that could be used for various other public facilities. Voters previously supported a $.025 sales tax for public safety and an $.025 property tax for Bellwood nursing home. Financial people can work only with figures presented them, in this case, projections unverifiable.
On 1/14/09, Museum Officials said that Lakeview Museum's current collection totaling 5000 sq. ft. will not be moved into the new downtown museum because certain collections need temperature/climated and security controlled storage. Since the PPD owns Lakeview Museum Building and plans to relocate park headquarters there, that is interesting because the Park Administrator said they needed at least all 32,000 sq. ft. at Lakeview. Also, I do not see funds allocated by the musuem for this climate controlled securized 5,000 ft. remaining at Lakeview?
On 1/4/09, Mark Johnson, a leading spokesperson for the riverfront facilities, said on my blog site "In your analysis of revenue potentially generated for the Museum by admissions, it appears that you fail to recognize that the majority of visitors to the Museum are assumed to be member of the Museum. These members of the Museum will support the facility through their annual membership dues. In exchange for which they will receive free admission to the museum."
In the report just prepared for the county, 2011 projections are 4500 members at an average membership cost of $75.00 for a total yearly collection of only $338,000.00 toward a $4.2-3 million operating budget. Mr. Johnson's statement doesn't add up.
On the same blog, Kathleen Woith, VP of Communications for the museum wrote "The Museums Strategic Master plan calls for 78 to 83% of visitors coming from our "resident area". Yet in the study compiled by the museum claiming $14 million in new business created by the two facilities; this study claims visitors will stay 3-4 nights in local hotels. I fail to conceive of visitors coming from, say, Bloomington-Normal spending any nights in any Peoria area hotel. In fact, the study paid by Heartland Partnership compiled by Gruen Gruen and Associates in 2003reads "interviews with representatives of museums that Lakeview uses as models, shows regional museums by themselves, generate limited hotel room-night demand. This study also indicates a a "spill-over" of sales and sales tax revenues of between $490,000-$1,350,000 million a year".
The $7 million to 14 million is a guess put in it's best light.
The report by Caterpillar "consultants" submitted in 2002, shows a spill-over of $14 million a year. Museum officials believe the spill-over will be between $7-14 million per year. The Gruen Gruen report commissioned by Heartland Partnership in 2003 shows a less than $2 million spillover. Hmmmmm.
Ken Hinton called me this afternoon to tell me that he has set a budget of $4500 for his entire school district for any type of museum visits. He said he has advised all of his teachers.
Of the nine museums listed by the Museum Committee, none except possibly Louisville, Ky. increased their attendance after the opening year. In fact, Dubuque, Iowa saw their attendance fall from 301,000 to 250,000 to 220,000 and for the past two years the Director of Development has not returned my phone calls. I note the Peoria Museum report has not filled in any attendance figures for Dubuque either.
The figures given to our County Financial Officer is what he is working with. His job is not to project attendance but to put on paper what to expect IF attendance, etc. figures are met. He uses the museums figure of $400,000 a year additional funding from fund drives etc., while the museum brochure says $500,000 needed per year. At no place do I see where the $8 to 13 million endowment is guaranteed to come from.
Now there is an economy so bad people are comparing it to the worst economic time in their lifetime. And there are no glimpses of improvement in the future. With all the other taxes coming down the stream, this is the worst time to impose another tax on the populace, especially a tax that could go from $0.25 to $1.00 without another referendum. (I stand corrected. Each increment from 1/4 to 3/4 would need to be by referendum).
I will not be supporting this referendum as the 215 page document outlining the counties involvement is a long way from the $600,000 already committed and an up or down vote for a museum tax. Nor have I seen any commitments from other communities to this originally planned "Regional Museum".
This referendum if passed, looks like a county capital expenditure "slush" fund with the count in and out of owning the museum especially after 20 years when costs of maintenance, pensions and falling attendance would be the most likely scenario.
A Message to the County Board and the Voting Public
As you cast your vote tomorrow evening please consider these facts: Quoting from the Peoria Area Needs Assessment published by the Heart of Illinois United Way, "Over the past 7 years Illinois has experienced a population growth rate of 3.2% while the Peoria region has experienced a growth rate of only 1.2%. Median income in Illinois rose by 3.5% from 2005 t0 2006, while the Peoria area Median income fell by 1.0%."
Caterpillar announced today a reduction by 25,000 of their workforce and a reduction in anticipated gross sales from $51 billion to $40 billion for 2009. Caterpillar stock is down by approximately 60% in the past 18 months, closing at around $32 today.
The City of Peoria is backing a local developer with the guarantee of roughly $40 million in General Obligation Bonds on a hotel expansion downtown to support the Civic Center. Should the hotel not "pan" out as planned, the city (taxpayers) in the City of Peoria would be on the "hook" to pay off the General Obligation Bonds. On 1/23/09,(JS),the Civic Center announced a $350,000 reduction in their 2009 budget while laying off 5 full time employees and a temporary 401(k) suspension for 54 full-time employees, cuts in travel and entertainment and a freeze on capital expenditures. Utilities costs have risen to 23% of the Center's operating budget.
Cub's Food on Knoxville recently announced their closing leaving the city (taxpayers) liable for approximately $5 1/2 million should a new occupant not be found.
Also the new Bellwood Nursing Home or renovation of from $24 million to $33 million (actually $49 million to $67 million adding interest on the bonds), will start showing up somewhere down the line after the county board approves the expenditure which all indications are, they will.
The Peoria Public Library $27 million (actually closer to $54 million adding interest), bond payments will start showing up on your tax bills shortly. As will the $31 million in new expenditures for Illinois Central College facility construction start showing up on your property tax bills in the future. ICC needs to keep up with the Joneses, (Heartland College) both colleges using taxpayer taken without referendums.
The Peoria Park District failed to raise enough private investment for the zoo expansion, cutting the $32 million expansion to $27 million and sending out a plea for $5 million more to complete the project now delayed by more than nine months.
The Peoria Playhouse, slated to remodel existing the PPD Headquarters for $5.5 million (once the PPD moves to the newly remodeled old IDOT Building on Knoxville, and then on to Lakeview Museum once the new museum is built?, has announced that they are only approximately 50% funded. The Playhouse announced on 10/08/04 in the JS that they plan to open in 2007??
On 9/04, the JS wrote that Bradley University announced a land swap, "PPD gets 80 acres in exchange for Meinen Field" now Shea Soccer Stadium, for land on the corner of Rt. 9 and Fox Road on which the PPD was to build a large sports Complex. Five years later this land is still farmland and still owned by Bradley University. Why was this swap never completed and sports complex built? The PPD says there are not not enough funds in their budgets and grant money didn't come through.
The Greater Sanitary District will require $100-300 million in capital expenditures starting no later than 2010. Higher rates and/or higher taxes.
The infrastructure of our water lines are close to disaster and costs to replace may run as high as $100 million. Higher water rates can be anticipated.
Peoria Public School District #150 has started a massive construction, possibly over $100 million. Construction is now underway building the new Glen Oak School costing $27 million. The first substantial yearly bond payment will come due in 2012 for $4 million a year for at least 20 years. Expect about the same for the new $23 million Harrison School now or soon underway.
On 9/16,08, the JS reported that this school district had a surplus in their budget yet four months later, the budget showed a $9.2 deficit, (JS, 1/16/09).Now, the district is talking about building one new high school and closing Peoria High (maybe a vocational school in this building) and closing Woodruff High School.
On 10/24/07, the JS reported that the once highly touted city owned Gateway Building was up for sale. "The city loses money on the Gateway, paying nearly $400,000 annually on the debt that was issued to build it. Plus approximately $175,000 in annual operating costs".
On 3/21/99, (JS)then Mayor Bud Grieves wrote that the city had not contributed "one cent to the the building of a downtown ballpark". After being taken to the "cleaners" by Eagle Cleaners, $1.6 million of the $3 million Eagle purchase coming from the city; the city wound up investing a minimum of $5 million in the new ballpark. (always take statements like the one Grieves usually makes, with a "grain of salt' as my dad used to say. To date, the ballpark has never returned "one thin dime on my $50,000 investment in this ball club. My stock has been for sale since 2003. No offers. But I'm expecting one from possibly Andy Rand and Jim Dillon as soon as the new museum gets built. (just kidding, Andy and Jim)
O'Brien Automotive did not renew their naming rights to the building this year. At the present time, the ballpark is unnamed.
One Technolgy Plaza Building was built and wired to attract new tech businesses in Peoria. That failed, and a try is being made again at the Peoria Next Innovation Center on Main. Third floor is empty except when Cat uses it occassionally.
And, of course, the RiverPlex, hanging like a yoke around the neck of the PPD. Despite projecting that revenues would cover principal and interest on the bonds, the PPD has only being able twice to make small payments on it's yearly $850,000 bond borrowed to build the facility. Only to take that away by charging equal amounts to the PPD regular funds for RiverPlex "operating cost".
Since approximately 2001, over $400 million in public funds have been spent on the riverfront. It is still not a desire able riverfront to most Peorians and a new Cat Visitors Center and Museum, costing taxpayers over between $73-80 million; this figure derived from the 20 year bonds adding up to $61-68 million paid by people buying and still a tax that must be paid by buyers, from the adding the land the City (taxpayers)gave the project; $6-8 million according to mayor Ardis, approximately $6 million already collected in state and federal grants including $500,000 from NASA and the $800,000-1,000,000 collected by Ray LaHood through the highway and transportation bill for the parking garage (JS 5/27/05), not counting the cities action as reported int the JS on 4/08/06,of lifting the cap on TIF funding for the museum.
Failures on the sowntown riverfront, include In-Play and RiverStation, both bankrupt, a souvenir shop closed and Damon's left town to name the most prominent. Residential construction has been relatively quiet yet to build a vibrant downtown, all studies show you need residents who live there.
If you take the amount promised by Caterpillar and public monies already collected, still leaving a shortage of $34 million or more (a $6 to 8 million endowment doesn't appear to be in this figure?), the $35 million in private funds seems to be fairly short of this private generosity anticipated.
The original proposal submitted to the County Board anticipated $12 million from the Federal Government (taxpayers money), $12 million from the State of Illinois, $6 million from Peoria County, (actually our administrator made and error and the amount is $600,000 of which $300,000 has already been set aside in a special fund, $35 million in private funding, making a total for the museum only of $65 million. The size of the museum was later reduced from 110,000 sq. ft. to 81,000 sq. ft. leaving some Historical Society members perplexed as to how they were going to get the 35,000 sq. ft. originally anticipated.
Part one of two.
Caterpillar announced today a reduction by 25,000 of their workforce and a reduction in anticipated gross sales from $51 billion to $40 billion for 2009. Caterpillar stock is down by approximately 60% in the past 18 months, closing at around $32 today.
The City of Peoria is backing a local developer with the guarantee of roughly $40 million in General Obligation Bonds on a hotel expansion downtown to support the Civic Center. Should the hotel not "pan" out as planned, the city (taxpayers) in the City of Peoria would be on the "hook" to pay off the General Obligation Bonds. On 1/23/09,(JS),the Civic Center announced a $350,000 reduction in their 2009 budget while laying off 5 full time employees and a temporary 401(k) suspension for 54 full-time employees, cuts in travel and entertainment and a freeze on capital expenditures. Utilities costs have risen to 23% of the Center's operating budget.
Cub's Food on Knoxville recently announced their closing leaving the city (taxpayers) liable for approximately $5 1/2 million should a new occupant not be found.
Also the new Bellwood Nursing Home or renovation of from $24 million to $33 million (actually $49 million to $67 million adding interest on the bonds), will start showing up somewhere down the line after the county board approves the expenditure which all indications are, they will.
The Peoria Public Library $27 million (actually closer to $54 million adding interest), bond payments will start showing up on your tax bills shortly. As will the $31 million in new expenditures for Illinois Central College facility construction start showing up on your property tax bills in the future. ICC needs to keep up with the Joneses, (Heartland College) both colleges using taxpayer taken without referendums.
The Peoria Park District failed to raise enough private investment for the zoo expansion, cutting the $32 million expansion to $27 million and sending out a plea for $5 million more to complete the project now delayed by more than nine months.
The Peoria Playhouse, slated to remodel existing the PPD Headquarters for $5.5 million (once the PPD moves to the newly remodeled old IDOT Building on Knoxville, and then on to Lakeview Museum once the new museum is built?, has announced that they are only approximately 50% funded. The Playhouse announced on 10/08/04 in the JS that they plan to open in 2007??
On 9/04, the JS wrote that Bradley University announced a land swap, "PPD gets 80 acres in exchange for Meinen Field" now Shea Soccer Stadium, for land on the corner of Rt. 9 and Fox Road on which the PPD was to build a large sports Complex. Five years later this land is still farmland and still owned by Bradley University. Why was this swap never completed and sports complex built? The PPD says there are not not enough funds in their budgets and grant money didn't come through.
The Greater Sanitary District will require $100-300 million in capital expenditures starting no later than 2010. Higher rates and/or higher taxes.
The infrastructure of our water lines are close to disaster and costs to replace may run as high as $100 million. Higher water rates can be anticipated.
Peoria Public School District #150 has started a massive construction, possibly over $100 million. Construction is now underway building the new Glen Oak School costing $27 million. The first substantial yearly bond payment will come due in 2012 for $4 million a year for at least 20 years. Expect about the same for the new $23 million Harrison School now or soon underway.
On 9/16,08, the JS reported that this school district had a surplus in their budget yet four months later, the budget showed a $9.2 deficit, (JS, 1/16/09).Now, the district is talking about building one new high school and closing Peoria High (maybe a vocational school in this building) and closing Woodruff High School.
On 10/24/07, the JS reported that the once highly touted city owned Gateway Building was up for sale. "The city loses money on the Gateway, paying nearly $400,000 annually on the debt that was issued to build it. Plus approximately $175,000 in annual operating costs".
On 3/21/99, (JS)then Mayor Bud Grieves wrote that the city had not contributed "one cent to the the building of a downtown ballpark". After being taken to the "cleaners" by Eagle Cleaners, $1.6 million of the $3 million Eagle purchase coming from the city; the city wound up investing a minimum of $5 million in the new ballpark. (always take statements like the one Grieves usually makes, with a "grain of salt' as my dad used to say. To date, the ballpark has never returned "one thin dime on my $50,000 investment in this ball club. My stock has been for sale since 2003. No offers. But I'm expecting one from possibly Andy Rand and Jim Dillon as soon as the new museum gets built. (just kidding, Andy and Jim)
O'Brien Automotive did not renew their naming rights to the building this year. At the present time, the ballpark is unnamed.
One Technolgy Plaza Building was built and wired to attract new tech businesses in Peoria. That failed, and a try is being made again at the Peoria Next Innovation Center on Main. Third floor is empty except when Cat uses it occassionally.
And, of course, the RiverPlex, hanging like a yoke around the neck of the PPD. Despite projecting that revenues would cover principal and interest on the bonds, the PPD has only being able twice to make small payments on it's yearly $850,000 bond borrowed to build the facility. Only to take that away by charging equal amounts to the PPD regular funds for RiverPlex "operating cost".
Since approximately 2001, over $400 million in public funds have been spent on the riverfront. It is still not a desire able riverfront to most Peorians and a new Cat Visitors Center and Museum, costing taxpayers over between $73-80 million; this figure derived from the 20 year bonds adding up to $61-68 million paid by people buying and still a tax that must be paid by buyers, from the adding the land the City (taxpayers)gave the project; $6-8 million according to mayor Ardis, approximately $6 million already collected in state and federal grants including $500,000 from NASA and the $800,000-1,000,000 collected by Ray LaHood through the highway and transportation bill for the parking garage (JS 5/27/05), not counting the cities action as reported int the JS on 4/08/06,of lifting the cap on TIF funding for the museum.
Failures on the sowntown riverfront, include In-Play and RiverStation, both bankrupt, a souvenir shop closed and Damon's left town to name the most prominent. Residential construction has been relatively quiet yet to build a vibrant downtown, all studies show you need residents who live there.
If you take the amount promised by Caterpillar and public monies already collected, still leaving a shortage of $34 million or more (a $6 to 8 million endowment doesn't appear to be in this figure?), the $35 million in private funds seems to be fairly short of this private generosity anticipated.
The original proposal submitted to the County Board anticipated $12 million from the Federal Government (taxpayers money), $12 million from the State of Illinois, $6 million from Peoria County, (actually our administrator made and error and the amount is $600,000 of which $300,000 has already been set aside in a special fund, $35 million in private funding, making a total for the museum only of $65 million. The size of the museum was later reduced from 110,000 sq. ft. to 81,000 sq. ft. leaving some Historical Society members perplexed as to how they were going to get the 35,000 sq. ft. originally anticipated.
Part one of two.
Hotel Vacancies at 20 Year High
The WSJ reports today, "The downturn in the U.S. hotel industry is becoming so acute that it has thrust the sector into crisis, leaving vacancies at a 20 year high and putting many properties in danger of missing payments to lenders".
With the Civic Center preparing for a 25% decrease in business this year and two local hotels up for sale (they were a while back and I haven't heard they have been taken off the market) and the city putting the taxpayer on the potential hook for $40million dollars in General Obligation Bonds to support a renovation and addition of a hundred beds downtown in the Pere Marquette location, this report does not paint a pretty picture for Peoria.
"Among commercial real-estate categories, the hotel industry rises and falls the most dramatically in reaction to economic cycles. That's because, unlike office buildings and shopping malls with long term leases, hotel occupancy and rates change on a nightly basis as customers come and go at will."
With the Civic Center preparing for a 25% decrease in business this year and two local hotels up for sale (they were a while back and I haven't heard they have been taken off the market) and the city putting the taxpayer on the potential hook for $40million dollars in General Obligation Bonds to support a renovation and addition of a hundred beds downtown in the Pere Marquette location, this report does not paint a pretty picture for Peoria.
"Among commercial real-estate categories, the hotel industry rises and falls the most dramatically in reaction to economic cycles. That's because, unlike office buildings and shopping malls with long term leases, hotel occupancy and rates change on a nightly basis as customers come and go at will."
Caterpillar Unveils Massive Job Cuts
Caterpillar today announced massive layoffs and warned of a tough year ahead as a downturn that began in the United States metastasized into a full-blown global recession, gutting orders for earth moving equipment. Caterpillar also reported lower than expected fourth quarter earnings, was laying off 20,000 workers and buying out 2500 others and predicted what would be the weakest year for business since the end of WWII.
The layoffs and buyouts, which will hit one out of every ten of the company's regular workers, and will idle an additional 8000 contract workers. many of them in the Peoria area.
"It's just a pessimistic outlook in terms of the world economy", said the chief investment officer of Solaris Asset Management in Bedford Hills, NY. Clearly the building of global infrastructure has come to a grinding halt".
Caterpillar stock plunged on the news and is now trading at approximately 60% from it's eighteen months highs.
The layoffs and buyouts, which will hit one out of every ten of the company's regular workers, and will idle an additional 8000 contract workers. many of them in the Peoria area.
"It's just a pessimistic outlook in terms of the world economy", said the chief investment officer of Solaris Asset Management in Bedford Hills, NY. Clearly the building of global infrastructure has come to a grinding halt".
Caterpillar stock plunged on the news and is now trading at approximately 60% from it's eighteen months highs.
Tuesday, January 20, 2009
Missed Projections in Peoria
I left out a few more: Caterpillar, some insiders projected a split when the stock hit $80 dollars, the stock closing at under $40 today, Cub's Food on Knoxville, the closed supermarket on the South End, Damon's, In-Play, RiverStation, One Tech Plaza; no not gloom and doom, just the facts before we launch into committing more taxpayer dollars into suspect projections.
i know some who own Caterpillar stock who would prefer the money committed to the riverfront be used to bolster the value of Caterpillar stock. Also, word is out that more veteran Cat employees took the early retirement recently offered them than was expected by Cat management.
i know some who own Caterpillar stock who would prefer the money committed to the riverfront be used to bolster the value of Caterpillar stock. Also, word is out that more veteran Cat employees took the early retirement recently offered them than was expected by Cat management.
Questioning Museum Attendance Projections
On January 8, 2008 C.J. Summers, "The Peoria Chronicle", blogged some interesting figures concerning projected attendance of the planned new museum. In the nine museums the Museum Committee used as "Benchmarks Comparisons", only one, Louisville Science Center, Louisville, Kentucky, came close to the attendance projected by the Museum Committee consultants.
One, Exploration Place, Wichita, Kansas, population area 596,000, compared to Peoria, 371,000, showed a drop-off in attendance from 400,000 in opening year 2000 to 180,000 as last reported.
The consultants say that will not happen in Peoria because of the greater variety of of events and partners. It must be noted that with more partners means less space per partner. Also, bringing in more variety adds considerable to operating costs.
Unfortunately, projections in Peoria, starting with The Gateway Building, losing $500,000 a year to the expanded zoo now almost a year beyond the planned grand opening; a mailing went out recently appealing for $5 million more on top of the $10 million "borrowed" from the Zoological Society, and ending with the Peoria Playhouse originally slated to be open by now but still with less than 50% of the funds required.
No, consultants projections have not done well in the past 14 years or so in Peoria.
Consultants differ on the amount of "new" money the museum will bring in from approximately 2 million (a 2003 projection)to 14 million, (a 2002 projection).
One, Exploration Place, Wichita, Kansas, population area 596,000, compared to Peoria, 371,000, showed a drop-off in attendance from 400,000 in opening year 2000 to 180,000 as last reported.
The consultants say that will not happen in Peoria because of the greater variety of of events and partners. It must be noted that with more partners means less space per partner. Also, bringing in more variety adds considerable to operating costs.
Unfortunately, projections in Peoria, starting with The Gateway Building, losing $500,000 a year to the expanded zoo now almost a year beyond the planned grand opening; a mailing went out recently appealing for $5 million more on top of the $10 million "borrowed" from the Zoological Society, and ending with the Peoria Playhouse originally slated to be open by now but still with less than 50% of the funds required.
No, consultants projections have not done well in the past 14 years or so in Peoria.
Consultants differ on the amount of "new" money the museum will bring in from approximately 2 million (a 2003 projection)to 14 million, (a 2002 projection).
Doom and Gloom
I print this blog with the permission of Karrie Alms; who I add, does her research better than I, who attended the Finance Committee Meeting Thursday and reports on what was NOT discussed by board members at this meeting.
Also, my information submited at that meeting is correct as was the information given me by Ken Hinton correct if you read my email to Superintendent Hinton carefully.
Here is Karries letter.
Good morning John and Karen:
I am seeking to understand why either or both of you pointed your doom and gloom towards Merle Widmer when he was only reporting what Peoria County Staff has provided in their analysis. Where was your criticism for Patrick Urich, Erik Bush and./or Steve Sorrel?
Merle was simply vocalizing the information staff has so professionally prepared. I am wondering how many of the eighteen PCBM have actually read their notebook of information?
Have either or both of you read the Peoria County Staff analysis of the museum posted at the Peoria County website?
The document is clear about what will be the outcome. There is no crystal ball about what the future will be --- the Peoria County Staff has laid out the consequences, just read page 241 of the analysis. Staff outlines what Merle stated at the Finance Committee meeting with the conditions that the museum would nned to have a $6.75M endowment and operate at 100% Pro forma, still sustaining an operating loss in year one.
The 100% scenario is for a $6.75M initial endowmet. The museum group has only budgeted for a $3M initial endowment, that is why Patrick Urich was talking about bonding for above the $34.7M net bonding proceeds to allow for the possibility of private donations to be used to increase the endowment while the taxpayers would may for more of the bricks and mortar costs.
Page 13 of report and attachments link
County staff wanted to review the operating budget to see the impact if there was a "best case"
where revenues were 10% higher than the break-even budget prepared, a "worst case" where
revenues only hit 90% of projections, and run the scenario over the 20 year bond repayment
period with certain assumptions about expense and revenue growth. Staff assumed 3% revenue
growth, a 4.5% rate of return on interest in the endowment, and most importantly, staff
developed some basic expense growth assumption that increased expenses from 3.26% up to
3.79% each year. This would provide the County Board with an indication of how much would
be needed to put into the endowment to ensure the sustainability of the project (Attachment 12).
Expenses would grow from $4,167,000 in the current year to $8,052,000 in 20 years. The
endowment would need to contribute $1,138,512 in the best case scenario if revenues came in at
110% of projections. Endowment proceeds would have to be $11,693,195 in the Lakeview
"stable" operating budget, and $22,247,878 in the reduced revenue scenario. County staff
concludes that the operating budget will need to be scrutinized for expense efficiencies and
considerable pressure needs to be placed on the Museum Group's Board of Directors to fund
raise in order balance the operating budget. In the stable budget scenario, County staff believes
that the endowment needs to be at a minimum $6,750,000, and to hedge against not meeting
revenue collections, it should be over $12,000,000.
What business operation does not face an increase in costs over the years for conducting business? None that come readily to my mind. If either of you can provide an example or examples of such non increasing busness operations without cutting staff and services, I would be most grateful.
Elaine and I met with Jim Richerson and Kathleen Woith last week (01/14/09). Elaine asked about the endowment and if the museum had taken a loss in the stock market downturn. Jim Richerson answered that the museum has a $2M endowment and that they had lost money. Elaine committed about the Sanitary District having a lot of money which was invested in CDs. Elaine nor I got the impression that the museum's endowment was invested in CD's because the endowment had just been reported having lost money.
So, the museum's endowment had taken a loss. Elaine asked what was the current value of the endowment. Jim replied that he did not know. Elaine and I thought that that was puzzling as he is the director and at least we thought that he would know that figure at a moment's notice.
I have included Elaine on this communication so that you are welcome to verify that I am accurately representing our conversation with Jim and Kathleen.
Furthermore, the museum is budgeting $3M for the endowment. We did not think to ask at that time if that was $2M plus $1M or $2M plus an additional $3M which would make for the $5M the museum group has outlined on page 232 of this report, it appears that the $3M would be in addition to the museum's current $2M endowment which is now less. If the market goes up and down as it historically will coupled with a 20 year time period --- then what? The museum's current endowment is most likely less than the $2M.
The information in this next section was calculated by county staff, not Merle.
The operating losses were calculated with a $6.75M initial endowment with 100% pro forma. The second scenario is $13.5M initial endowment with 90% pro forma endowment. Karen, I believe you were sitting to my left at the 15 Jan 2009 Finance Committee meeting, when I asked my question regarding the amount needed for the initial endowment relative to each additional 10% increment decrease in pro forma realization of projections. --- Not sure how to word that statement. I asked for each 10% decrease there would be a need for the initial endowment to be raised by an approximate $6 - $6.5M. Patrick Urich replied yes unless the shortfall would be made up from some other funding source / revenue stream. What other revenue stream? More donations, earmarks, ????
That is a sobering thought, at least to me. In view of the fact that I cannot recall one project in the last fifteen years which has been promoted as a silver bullet with rosey projections has ever met those projections. It would be interesting to see what the other projections were and the reality of what came to pass. Just recently we have the Midtown Plaza project falling apart. The list is long for the past fifteen years.
http://www.peoriacounty.org/county/news/show/832
MuseumPolicyConsideration-REPORT.pdf
MuseumPolicyConsideration-REPORTandATTACHMENTS.pdf
--------------------------------------------------------------------------------
Since 2003, the RDA has gone through significant changes. Removing the WOW features, decreasing the size while the cost continues to rise. Wondering if everyone in the group is still on board and happy with this project?
From attending the meetings, it appears that there are many policy questions which the Peoria County Board has not addressed regarding this referendum so that the public would be able to have a clear picture of what is down the road.
I have been told and I have not been able to confirm that the museum group is reported to be sending upwards of $300,000 - $355,000 with Simantel for a PR compaign to persuade voters to approve the referendum. Now, any persons against the museum proejct as currently planned, do you think that they will have that type of money?
I am hopeful that either or both of you will use your journalistic skills to cover the potential full impact of this referendum so that the public will be able to be informed in an unbiased manner. I hope that you will allow and report both voices for this referendum to be treated with respect and stick to the issues and the information which is being presented rather than making personal attacks on the messengers of such information would be appreciated, as has been done with Merle Widmer in yesterday's column.
Cordially, Karrie
Also, my information submited at that meeting is correct as was the information given me by Ken Hinton correct if you read my email to Superintendent Hinton carefully.
Here is Karries letter.
Good morning John and Karen:
I am seeking to understand why either or both of you pointed your doom and gloom towards Merle Widmer when he was only reporting what Peoria County Staff has provided in their analysis. Where was your criticism for Patrick Urich, Erik Bush and./or Steve Sorrel?
Merle was simply vocalizing the information staff has so professionally prepared. I am wondering how many of the eighteen PCBM have actually read their notebook of information?
Have either or both of you read the Peoria County Staff analysis of the museum posted at the Peoria County website?
The document is clear about what will be the outcome. There is no crystal ball about what the future will be --- the Peoria County Staff has laid out the consequences, just read page 241 of the analysis. Staff outlines what Merle stated at the Finance Committee meeting with the conditions that the museum would nned to have a $6.75M endowment and operate at 100% Pro forma, still sustaining an operating loss in year one.
The 100% scenario is for a $6.75M initial endowmet. The museum group has only budgeted for a $3M initial endowment, that is why Patrick Urich was talking about bonding for above the $34.7M net bonding proceeds to allow for the possibility of private donations to be used to increase the endowment while the taxpayers would may for more of the bricks and mortar costs.
Page 13 of report and attachments link
County staff wanted to review the operating budget to see the impact if there was a "best case"
where revenues were 10% higher than the break-even budget prepared, a "worst case" where
revenues only hit 90% of projections, and run the scenario over the 20 year bond repayment
period with certain assumptions about expense and revenue growth. Staff assumed 3% revenue
growth, a 4.5% rate of return on interest in the endowment, and most importantly, staff
developed some basic expense growth assumption that increased expenses from 3.26% up to
3.79% each year. This would provide the County Board with an indication of how much would
be needed to put into the endowment to ensure the sustainability of the project (Attachment 12).
Expenses would grow from $4,167,000 in the current year to $8,052,000 in 20 years. The
endowment would need to contribute $1,138,512 in the best case scenario if revenues came in at
110% of projections. Endowment proceeds would have to be $11,693,195 in the Lakeview
"stable" operating budget, and $22,247,878 in the reduced revenue scenario. County staff
concludes that the operating budget will need to be scrutinized for expense efficiencies and
considerable pressure needs to be placed on the Museum Group's Board of Directors to fund
raise in order balance the operating budget. In the stable budget scenario, County staff believes
that the endowment needs to be at a minimum $6,750,000, and to hedge against not meeting
revenue collections, it should be over $12,000,000.
What business operation does not face an increase in costs over the years for conducting business? None that come readily to my mind. If either of you can provide an example or examples of such non increasing busness operations without cutting staff and services, I would be most grateful.
Elaine and I met with Jim Richerson and Kathleen Woith last week (01/14/09). Elaine asked about the endowment and if the museum had taken a loss in the stock market downturn. Jim Richerson answered that the museum has a $2M endowment and that they had lost money. Elaine committed about the Sanitary District having a lot of money which was invested in CDs. Elaine nor I got the impression that the museum's endowment was invested in CD's because the endowment had just been reported having lost money.
So, the museum's endowment had taken a loss. Elaine asked what was the current value of the endowment. Jim replied that he did not know. Elaine and I thought that that was puzzling as he is the director and at least we thought that he would know that figure at a moment's notice.
I have included Elaine on this communication so that you are welcome to verify that I am accurately representing our conversation with Jim and Kathleen.
Furthermore, the museum is budgeting $3M for the endowment. We did not think to ask at that time if that was $2M plus $1M or $2M plus an additional $3M which would make for the $5M the museum group has outlined on page 232 of this report, it appears that the $3M would be in addition to the museum's current $2M endowment which is now less. If the market goes up and down as it historically will coupled with a 20 year time period --- then what? The museum's current endowment is most likely less than the $2M.
The information in this next section was calculated by county staff, not Merle.
The operating losses were calculated with a $6.75M initial endowment with 100% pro forma. The second scenario is $13.5M initial endowment with 90% pro forma endowment. Karen, I believe you were sitting to my left at the 15 Jan 2009 Finance Committee meeting, when I asked my question regarding the amount needed for the initial endowment relative to each additional 10% increment decrease in pro forma realization of projections. --- Not sure how to word that statement. I asked for each 10% decrease there would be a need for the initial endowment to be raised by an approximate $6 - $6.5M. Patrick Urich replied yes unless the shortfall would be made up from some other funding source / revenue stream. What other revenue stream? More donations, earmarks, ????
That is a sobering thought, at least to me. In view of the fact that I cannot recall one project in the last fifteen years which has been promoted as a silver bullet with rosey projections has ever met those projections. It would be interesting to see what the other projections were and the reality of what came to pass. Just recently we have the Midtown Plaza project falling apart. The list is long for the past fifteen years.
http://www.peoriacounty.org/county/news/show/832
MuseumPolicyConsideration-REPORT.pdf
MuseumPolicyConsideration-REPORTandATTACHMENTS.pdf
--------------------------------------------------------------------------------
Since 2003, the RDA has gone through significant changes. Removing the WOW features, decreasing the size while the cost continues to rise. Wondering if everyone in the group is still on board and happy with this project?
From attending the meetings, it appears that there are many policy questions which the Peoria County Board has not addressed regarding this referendum so that the public would be able to have a clear picture of what is down the road.
I have been told and I have not been able to confirm that the museum group is reported to be sending upwards of $300,000 - $355,000 with Simantel for a PR compaign to persuade voters to approve the referendum. Now, any persons against the museum proejct as currently planned, do you think that they will have that type of money?
I am hopeful that either or both of you will use your journalistic skills to cover the potential full impact of this referendum so that the public will be able to be informed in an unbiased manner. I hope that you will allow and report both voices for this referendum to be treated with respect and stick to the issues and the information which is being presented rather than making personal attacks on the messengers of such information would be appreciated, as has been done with Merle Widmer in yesterday's column.
Cordially, Karrie
Monday, January 19, 2009
Cedar Rapids Imax to Close January 20th
I'm finally getting on top of my respiratory illness to feel like blogging again. Since I made the JS news today I will gather the facts left out by Ms. McDonald and send them off as a "Letter to the Editor" and expect in fairness my letter will be printed.
In the meantime news from Cedar Rapids, Iowa announces the closing of the Science Station IMAX theatre as it was no longer financially feasible and attendance was eroding. "In December IMAX announced beginning in 2008 they will be installing their new digital technology in 100 commercial theatres. At the same time local theatres are already offering digital and 3D technology."
Shades of the RiverPlex. The museum IMAX would be in direct competition with the private sector who would be paying a sales tax to help fund their competition....
In the meantime news from Cedar Rapids, Iowa announces the closing of the Science Station IMAX theatre as it was no longer financially feasible and attendance was eroding. "In December IMAX announced beginning in 2008 they will be installing their new digital technology in 100 commercial theatres. At the same time local theatres are already offering digital and 3D technology."
Shades of the RiverPlex. The museum IMAX would be in direct competition with the private sector who would be paying a sales tax to help fund their competition....
Thursday, January 15, 2009
I'll be Back Shortly
Between a vacation, being ill,(temporary) and catching up, I apologize for my absence.
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