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Monday, August 22, 2016

Smoke And Mirrors Hide City's Insider Deals With Investment Group

“There is a public interest in knowing who the state is meeting with over subsidies. If you want money from us, you should be willing to accept that the public has a right to know it.” -- Bill Lueders

The brave and honorable Bill Lueders. Yawn.

According to this article in the Janesville Gazette, the Janesville city council will be deciding tonight on whether to "loan" a private investment group $384,100. That should be - period.

JG Excerpt:
The owners of Prospect 101, a six-story office building at the corner of East Milwaukee and South Main streets, are seeking a tax-increment financing loan totaling $384,100 to help them renovate the vacant top floor of the building, according to a city memo.

For some reason, the award-winning Janesville Gazette could not find the simple journalistic curiosity to identify who the people are behind Prospect 101.

First of all, if they need a simple government loan - why bother to mention the term "TIF District?" It's like they're trying to give their awful downtown TIF District credit for something it doesn't deserve. A loan is a loan. A private entity borrows money. The private entity pays it back with interest. End of story.

But obviously, that's not what is going on here. The city has gone to great lengths in their memo (File Resolution No. 2016-1340) to muddy the public's understanding of this shady-looking deal.

Excerpt from city memo:
Tax guarantee payments will remain the same as those were associated with recovery of the $500,000 provided for development costs with the original agreement.

Help me out here. Can someone translate gobbledygook into English for me?

In a previous agreement from 2009 (File Resolution No. 2009-607) with the "building address," LOL - the city "borrowed" the building $360,000 while reimbursing the building $500,000 - how does THAT work? On top of that, the city repeatedly makes an unnecessary statement throughout the process, that the borrowers will make guaranteed property tax payments. What's the point of that?

Just try skipping your property tax payments even once. The city or county doesn't care about your ability to pay your mortgage or home renovation loans - they'll tax foreclose on your property in a heartbeat if you don't make the "guaranteed tax payment."

Again, the city gives the impression that the building's "guaranteed" property tax payments are in lieu of the loan payments - therefore, according to their logic, the loan is NOT a forgivable "freebie hand-out." Also, the city doesn't clarify whether their use of "rising property tax payments" are payments made exclusive from property assessed value. Hmmm. Got it?

Truth is; both the city and the enabling Gazette are doing a major disservice to Janesville taxpayers, the building owners and their readers for not setting the record straight. At the minimum, the Gazette needs to get their google fixed so they can at least identify the people the city is meeting with over subsidies and loans. If you want money from us, you should be willing to accept that the public has a right to know it.

The city should report on the loan deals they make with private parties openly and clearly. If it's not a freebie forgivable loan, they should lay out the collateral, the term, interest and payment plan and most importantly, an open book into what account the payments are made to.

Anything less should be unacceptable. But in Janesville, we're used to unacceptable. Or in other words, the system isn't rigged if it's designed to be that way.

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