Monday, March 12, 2018

"Hotel Deal Raises Eyebrows in City That Learned the Hard Way"

Printed by the Journal Star on 6/15/09 but written by the St, Loius Post-Dispatch. "Peoria jumps on the convention-hotel bandwagon. Here in St. Louis, we know the folly of  listening to consultants who promise that a big new hotel will attract more convention business. Our down-town Renaissance Hotel, built on the basis of such projections, has just defaulted on its debt payments. But 180 miles to the northeast, consultants are still making such promises, and the leaders of Peoria are in a mood to believe them.

The Peoria City Council endorsed a plan last month that would provide $39 million of public financing for a new Marriott Hotel attached to the Civic Center. In one respect, the city would be making an even greater commitment than St. Louis did: Peoria appears to be talking about issuing general obligation bonds, which the city would repay out of tax revenue. St. Louis convention hotel was financed with revenue bonds, with no obligation for the city itself to make payments.

The plan is based on the hotel drawing more conventioneers to Peoria, which will bring the city more money through taxes on hotel rooms, restaurant meals and other spending. The discussion in the Peoria Journal Star will sound familiar to St. Louisans:

In recent years  Civic Center business has remained relatively stable. even after the $55 million expansion of its facility to add more convention hall space. ...Debbie Ritschel, General Manager of the Civic Center, said a main reason for the lack of increased convention business is because there is no attached hotel. She said once it is connected, 20 to 30 clients who have turned down coming to Peoria in the past because the Civic Center does not have an attached hotel, will be reconsidered. It also opens a series of clients we haven't approached. she said.

Peoria's Marriott isn't a sure thing. The deal is contingent on a developer's ability to  raise $54 million of private financing, which may be a tall order in today's market."

The Peoria Journal Star then adds the following: "Not that Peoria ever lets precedent---here or  elsewhere---- get in the way of its decision making, but in the light of the recent bad news concerning a grocery store (Cubs) going belly up in yet another of the city's less-than-successful TIF districts, leaving local taxpayers on the hook, might city leaders pay attention now? You just never know who might be watching".

The Peoria Journal Star recently wrote "Worst Deal Ever", 2/23/2018, writing that the city did not protect the taxpayers on the hotel deal. It was reckless with their money".

What I have said many times that Peoria is a consultants money making dream. Add Heddinton Oaks to the big loser (the PJS was huge supporter of Heddsington Oaks) list and of course, the Pere, and now those who 'lead'  Peoria want to buy a $300 million dollar water company to help pay for Peoria's  infrastructure that is so bad it is indescribable.

P.S. The Civic Center is projected to lose $500,000 next time they report profits and losses.


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