PDC gave Edlen group $8M no-interest loan for Vestas building
Once again really interesting news gets buried. It's way down in this story. The writer focuses on the Portland Development Commission's practice of creating winners and losers in the local business community by making sweetheart loans to favored companies -- some of the loans being real stinkers that go sour immediately. But here's a detail of the Vestas headquarters deal, which is looking more like a stinker every day, that we don't think has previously seen the light of day:
As of October, in 2011 the PDC had loaned out over $15 million, more than half of which was at a zero percent interest rate to a single borrower.A large chunk of that was lent to an investor group led by Gerding Edlen, according to Quinton. Gerding is a "green" developer group and recipient of numerous government subsidies in the Portland area for a variety of projects.
The investor group received $8.1 million at a zero interest rate to renovate the old Meier and Frank warehouse in the Pearl for the new Vestas U.S. headquarters.
Vestas, a wind turbine manufacturer, has seen better days. Last week the company announced it is laying off 2,335 employees after missing several revenue and profit targets.
The loan to the Gerding Edlen is the single largest zero interest loan made by the PDC to date and shows that PDC has yet to shut off the faucet to cheap money, even with a reworking of its loan programs.
As we understood the deal when it was announced nearly a year and a half ago, the sweetheart loan was going to Vestas, not Edlen. Guess the deal changed, eh? Funny thing.
Somebody should dig up, and publish, all the documents on that transaction. It would make interesting reading indeed. If Vestas gets sold or goes under, which seems more likely all the time, somebody's going to get burned. Probably the taxpayers -- certainly not the developer. This is Portland, after all.
| Posted at 10:45 AM | Permalink |
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Comments (19)
Mark Edlen has just installed a LEED Platinum conveyor belt that transports money from City Hall to his wine cellar.
Posted by Garage Wine | January 25, 2012 11:02 AM
We knew this was the deal all along. It was just like the money we gave AIG that went straight to Goldman-Sachs.
PDC gave it to Vestas for "acquisition" costs for that building. However, G-E owned the building and was doing the improvements that Vestas wanted.
Only problem is Vestas is on the hook and not G-E that actually has stuff we can put a lien on.
Posted by Steve | January 25, 2012 11:12 AM
Read the book, "Throw them all Out". One of the chapters talks about all the money loaned out to "green" companies that just happened to be run by major players on Obama's campaign finance committee.
Many of them (including Al Gore) took the money and used it to take the company public- then cashed out and moved on. Many of these companies have no way to make a profit and thus create jobs.
In Portland it is the same game and the same result- take the money and run.
Posted by Ralph Woods | January 25, 2012 11:21 AM
Jack,
Just so you know, it wasn't purposely buried. It was just a matter of word count and I stayed with my original intent to look at the loan trends as a whole. Trust me there are many interesting stories on that list of loans.
Plus, I had to save you some muckraking.
Next up, is the Portland Housing Bureau loan portfolio.
Regards,
Jacob Szeto
Oregon Capitol News
Posted by Jacob Szeto | January 25, 2012 11:37 AM
No interest loans = not in the public interest.
Posted by dg | January 25, 2012 12:18 PM
The magic of Portland's legalized "public-private" partnerships. Get it? Public? Private? Guess who's the taker and who's the loser?
Ha, ha, ha...
Posted by Mr. Grumpy | January 25, 2012 12:50 PM
Garage WIne, that was hilarious.
Posted by Mojo | January 25, 2012 12:55 PM
Here's how public/private partnerships work in Portland:
1. The public taxpayers put up all the money and take all the risk.
2. The politicians hand it out to their supporters and pet projects (under the guise of the PDC, or some other agency, to create an arms-length relationship).
They pretend to consult the taxpayers.
3. Any profits are retained by the well connected. Any losses are charged to the taxpayers.
4. The well connected help re-elect the politicians who feed them the profits.
2% for Art is a perfect example, though it has nothing to do with the PDC.
Posted by Mister Tee | January 25, 2012 12:58 PM
"When asked why the PDC does not charge market interest rates, Executive Director Patrick Quinton said that they risk making the project too expensive.
“If you make it so expensive that the project can’t go forward, we are really not serving our mission,” he said."
Are they not already too expensive when you attach Davis-Bacon to the jobs?
Posted by pdxjim | January 25, 2012 1:19 PM
Green is dread. The city of Portland's chief Sustainability bureaucrat is on the Portland Public Schools' longrange construction planning committe, as PPS is looking to bring back the bond defeated last May 2011. The city talks up how it wants to help the public schools but then layers on expensive high end building [sustainability] codes onto any rebuilding of schools, jacking up the price of each school rebuild. Then too the city's urban renewal and other property taxes are squeezing out the rebuilding of schools as property tax payers only have so much proclivity to fund new public ventures, and taxpayers are apparently close to being tapped out.
Sadly, not much is going to change any time soon as the mayorial and commissioner candidates for this year's elections are made pretty much of the same clothe as the current slate at city hall.
Exit Portlandia when you've a chance is all I can advise.
Posted by Bob Clark | January 25, 2012 4:30 PM
When I read the above from Bob Clark his opening remark "Green is dread", my brain transposed that into "gread" and upon spell checking it should be "greed". No matter, what all of this is about plain and simple is GREED. The sharpies like Gerding, as we all know have figured it out and now manipulate the agencies like PDC to line their pockets and we the tax payers foot the bill! I know this has been hashed out dozens of times in Jack's blog, it's just so obvious. Q, So how do change or eliminate this practice? As to public review and input, it's a joke and a big fat lie. Been there, done that, what hoo-haw!
Posted by Old Curmudgeon | January 25, 2012 5:01 PM
"Exit Portlandia when you've a chance is all I can advise."
---
Most of Portlandia is not exiting. Portland gets what Portland wants. By large majorities. And when the Liar confesses his lies, he survives two recall attempts.... because that is what Portland wants.
My only answer is that most of Portlandia believes differently than the people who post and comment on this blog.
Posted by Harry | January 25, 2012 8:14 PM
There was a recent news story about how Portland doesn't have innovative thinkers because it draws people who want to all think alike, i.e, conformers, "pod people".
Baa, baa, baa...
Posted by Mr. Grumpy | January 25, 2012 9:58 PM
Would love to learn mayor creepies and the rainbow city council's kickback totals? If only they didn't own the "news crews. "
Posted by fancypants | January 25, 2012 11:13 PM
My only answer is that most of Portlandia believes differently than the people who post and comment on this blog.
My thoughts are that those who profit from the scene are those who are engaged and sure to vote to continue their interests.
I could be wrong, but I think there are many more in numbers that are so disgusted, that they have retreated, have given up and do not think of being engaged to make any difference, or some are only thinking of the day they will leave. I hear people saying as soon as my kid is out of high school, as soon as we retire,...we are out of here, so they don't care anymore. Why don't they care anymore? Downtown Denizen said it last week, his life is not about fighting the city. Now, there are some who will not put up with this without putting up a fight. Years ago, at a council meeting, there was still quite a show of citizens, I remarked to one I got to know simply because I saw this person testifying there more than once that I was surprised people come to the hearings anymore, she said, "only the stubborn ones still keep coming..."
http://www.alternet.org/story/144529/are_americans_a_broken_people_why_we%27ve_stopped_fighting_back_against_the_forces_of_oppression/?page=entire
Are Americans a Broken People? Why We've Stopped Fighting Back Against the Forces of Oppression
Posted by clinamen | January 26, 2012 8:10 AM
Count me at "retreated and given up".
After living in Oswego, Portland, and Tigard for the past 22 years, we moved to Vantucky (Salmon Creek) since December 28th. The water & sewer rates are much lower and the garbage service costs less than HALF what I was paying before (for weekly pick-ups).
BTW, our SW Portland short sale is in escrow for $18,000 more than we paid for it (brand new) in 1995: AFTER SPENDING $25,000 on improvements. The current property taxes are $6,700 for a home that is in escrow for $261,000 vs. the assessed value of $301,000. Why would the new owner pay property taxes on $40,000 of vapor value?
MultCo can expect a wave of new challenges to their assessed property values, but I don't expect justice to carry the day. Not in Portlandia.
Posted by Mister Tee | January 26, 2012 2:02 PM
Hey, I'm green and sustainable. Now give me some cash!
Posted by Andy | January 26, 2012 3:39 PM
clinamen wrote:
I think there are many more in numbers that are so disgusted, that they have retreated, have given up and do not think of being engaged to make any difference, or some are only thinking of the day they will leave.
Yes, I believe there is a silent plurality of city taxpayers who are regularly outvoted. They are mildly repelled, or else actively dislike what is going on -- but haven't quite left yet.
It takes effort to move, and you lose the remaining creature comforts. For us, the disadvantages outweigh that. We will definitely miss our favorite restaurants, but you can still drive there.
Perhaps the folks who stay have kids in a decent school, or they still earn enough to stay on the tax and fee treadmill -- for the time being. That simply can't last forever.
Businesses (and the people who run them) are still leaving. You can't run an entire city as a temporary, pop-up retail incubator. Investment follows confidence.
I'm glad people still move here, and choose to stay here. I hope that they have a positive effect on how the city is run; however I fear that the motivated ones are still heading out.
All of the strange (albeit predictable) Portland news over the last week has only reinforced my feelings that far-flung boringtude is worth it ...
Posted by Downtown Denizen | January 26, 2012 9:43 PM
Gerding Edlen is a principal partner in the debacle called the "Oregon Sustainability Center". So is notorious polluter, weapons manufacturer, and tax dodger General Electric.
Posted by Anne T | February 8, 2012 10:11 AM