The Evansville City Council took an unprecedented step in voting to provide a $4.8 Million loan to a start up company from Houston, TX to manufacture a gas pressure step down device that they have a license for in the old Whirlpool Building. The City will also be covering two years rent for Earthcare.
The hotly contested vote was taken after a vote to forcefully extract the bill from the Finance Committee whose chairman Councilman John Friend was opposed to going forward due to the fact that many of the questions asked regarding the financial plan had not been answered and because no real world technical testing was presented.
Ken Haney of Earthcare testified before the council that he had orders from all over the world coming in and that they are on the cusp of getting a multi-billion deal in New York. No details of any orders were submitted. Mr. Haney also testified that Earthcare had been turned down for loans at 6 or 7 banks but provided no documentation with respect to why.
Councilman Conor O’Daniel voted to support the loan after giving every indication that he was against doing so and asking many articulate questions for which no answers were offered.
Other Council members voting for the loan package were President Connie Robinson, Councilwoman Missy Mosby, Councilman Johnathan Weaver, and Councilman H. Dan Adams who has an MBA from Washington University.
Council members Dan McGinn, Stephanie Brinkerhoff-Riley, John Friend, and Al Lindsey all voted against the loan. And so begins the saga of the City of Evansville’s foray into the world of investment banking. The $4.8 Million loan has no collateral associated with it.
“Other Council members voting for the loan package were President Connie Robinson, Councilwoman Missy Mosby, Councilman Johnathan Weaver, and Councilman H. Dan Adams who has an MBA from Washington University.”
Why is the mention of an MBA, for any member, relevant??? Partially removed to accomodate reader request!! Sooo much puff in this article!!
The affirmative action comment is a racist and sexist dog whistle in this instance. So nice of the CCO editors and publishers to allow such tripe to remain.
Turned down by 6-7 banks? What? did they lose count?
Fools rush in where angel investors fear to tread.
Were they turned down, or were they just not able to get the package the way they wanted it?
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Removed to accomodate reader request
Oh heavens no! They worked on their next a big as Google idea. http://blogs.chicagotribune.com/.a/6a00d83451b4ba69e2014e870afaff970d-250wi
The Hennessy comment is a racist dog whistle. So nice of the CCO editors and publishers to allow it to remain.
Conor O’Daniel is a liar, a fool, and an idiot. He was against this and changed his mind after getting worked over in the hall by those two hucksters from Earthcare.
One axx mistake was made tonight at the City Council meeting for approving a $5 million to Earthcare. In a few months, the Mayor,5 city councilmen and Dewey are going to look real bad for wasting good public money. Sad!
Winnecke, Dewey, Connie Robinson, Missy Mosby, Weaver, O’Daniel and even old Doc Adams will be known as the crew that started the Detroitization of Evansville. These stooges make Weinzapfel and his backroom deals look honest and smart.
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This comment is an obviously racist dog whistle. I’m so proud of the editors and publishers for allowing it to remain!
I am very disappointed in Doc Adams, I expected this from the rest but not from you Sir.
This is the most irresponsible thing I’ve seen in a long time.
I want a refund on my property taxes. Isn’t this about the same amount of money that Weinzapfel and Winnecke took from us in the homestead fiasco?
Conner said in the first half of the meeting that he would like to se the council have a few more weeks to gather more information to which Connie replied “Conner we’ve already had 2 weeks!”. So Connie, 2 weeks is more than enough time for 9 people to make themselves knowledgeable enough about a decision that affects 40% of the taxpayers coffers? And Conner is so spineless and that he can question the justification of this loan but then be persuaded during a 5 min break to change his mind? And why did we hear zero public comments from the yes voters as to why they so adamantly support this over the last few weeks? Were they afraid to speak publicly because they were afraid they might be asked questions they had no answers to and no desire to find those answers? They only voted in favor so they can claim they helped bring jobs to Evansville. Selfish, careless and irresponsible. I give Doc Adams credit though for at least having the guts to say that he truly believes in this project so strongly that he would invest his own personal money into this company.
Missy said we need jobs in Evansville. Said that she personally knew first-hand how bad Evansville needs jobs. This from a failed real estate agent turned barmaid. Priceless. Maybe Haney will give her a job on the production line. Although I doubt she would be making the $38/hr Earthcare said the jobs could potentially pay that she was soooo excited about at last night’s meeting. She knows first-hand how bad this City needs jobs……you can’t make this stuff up.
maybe they offered Missy a job serving ddrinks at the company headquarters
I particularly liked here plea about “children starving in Evansville” from lack of jobs.
I wish they would make up their minds as to whether we have an obesity problem or a malnourishment problem here in Evansville.
It probably would not be politically correct for me to make any observations on the issue. Damn those censors.
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Five million dollars would easily retrofit Roberts Stadium into an Exposition Center AND purchase a much needed fire truck.
Instead, we unlock the door to the “FEEL-GOOD-ZONE.” You unlock this door with the key of illusion. Beyond it is another dimension – a dimension of fools, a dimension of ignore-ance, a dimension of deceit. You’re moving into a land of smoke and mirrors, of quick shuffle and fast deals. You’ve just crossed over into the “FEEL-GOOD-ZONE.” That place where logic, common sense and due diligence are forbidden. Where those who use these words are deemed “Naysayers.”
Buckle your seat belts Evansville. You’re being taken for a ride. …
You hit the nail on the head Bubba. It is easy to believe what makes you feel good, what you want to believe. I will never understand why, if this is such a great deal, that so many answers to questions are secrets. And, yes, I would rather see Roberts turned into an expo center or a beautiful new part of Wesselman Park and to see the fire department improved, rather than this “secret project” be pawned off on the public. Tell us the truth openly and honestly so that we have the data to make good decisions. If you can’t do that, then move on.
This city council meeting reminds me of the “Our Gang” short feature series of movies that were made in the 1930s. Connie Robinson, Councilwoman Missy Mosby, Councilman Johnathan Weaver, and Councilman H. Dan Adams deserve to be deposed in the next City Council elections, and be replaced by Republicans who have the guts and intelligence to realize when they are being scammed. These people have no business spending other peoples’ money, under any circumstances. God knows what kinds of personal enrichment these people have been promised by Earthcare.
This makes Chicago blush.
This will be one of the worst decisions ever by the City Council. Why not just take the 5 million down to the Casino and bet on Black! About the same odds of ever seeing that promised 32 million.
Better be careful…Soon2Be has gone all McCarthy the last few days. To be politically correct you should have accused them of betting on red.
Making a loan because of race is just as racist and denying a loan because of race. Anyone who thinks that race did not play a role in this Earthcare deal is a fool.
Hoorah! The good ol’ “I’m only being a racist because they were racists first” alibi.
Racism is Evil! Evil flourishes when good people do nothing! Reverse racism is just as evil as racism.
Each person is responsible for his or her own karma. Exampling “reverse racism” as an excuse for one’s own racist acts does not erase bad karma. And on a basic level, it’s just a knee jerk cop-out.
Missy and Doc Adams reached the same conclusion? Way to go Doc. Hey Conor, will you pay for the chicken now? You are a chicken you know.
Councilman Stupid votes AYE, all five stupid council members voted AYE. Resolution passed.
What would be a “respectable†amount of time to pass before Debbie Dewey joins the team at EarthCare?
It seems rather fortuitous, for some people, that someone so knowledgeable about EarthCare’s business was selected to head GAGE right before this proposal came to Evansville.
Dewey carried as much, or more, water in this approval process than Mr. Geldmacher, and actually seemed more knowledgeable about the business processes than the owner Kenneth Haney.
What EarthCare has going for it is two Presidential visits to its headquarters, a minority owner, federal mandates that require a certain percentage of energy usage be from renewable sources by a fixed date, various departments of the federal government that are being pressured by the White House to show some positive results for renewable energy in order to mitigate the damage done by the Solyndra fiasco.
None of this has anything to do with allowing markets to seek their own level. It is all about government intervention, and we just witnessed more government intervention buy using our tax dollars to support what? That’s right, more government intervention in the market place.
If this project were only half as good as advertized, the team at EarthCare could have gotten financing. I do not think they were looking to hard as long as these deals with municipalities were on the table. If they could sign a deal with Evansville they could hold on to their ownership of the company and maximize their profits.
So Christmas came early this year for Ken Haney Et al, and now we will see if they have what it takes to execute.
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You refer to “using our tax dollars” — what tax dollars are you referring to? The loan is from Casino Aztar money, it is not from the resident’s tax payments.
So your saying money paid to the city (under obligation) is not money that belongs to the tax payers of said city? With your line of thinking any fines, fees, or general revenue not derived from a direct tax on the citizens the public has no say in how that money is spent?…if the city and all it’s resources and revenues do not belong to the citizens of our fair city then who do they belong to? the democrats?
I don’t get your logic….
JMHO
As a banker, I can tell you there must have been a good reason this was passed over by “6 or 7 banks”. Banks are now actively trying to make loans again. The private equity and angel capital markets would love a deal that is offering the return the city was pitched. Bankers/investors are educated people that do this for a living, and if they saw something they didn’t like, that should be a sign to pass. The Council was too focussed on the potential payback. Not to mention the city should not be in the business of financing start ups with tax payer money! Is this even legal?
Could it be possible that the first thing a bank might have done was a background check on Kenneth Haney?
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Worse, they may have had some serious material information and witheld it. Specifically the links to arrest records you posted on one of the officers should have been grounds to defer a vote.
1. Where are the comfort letters from the supposed customers showing at least their intent to purchase how many dollars of units. If you want $5MM, you need to show me the money.
2. Where, I ask again, just like i asked for for the McCurdy, are the committment letters from the bank(s) that will surley have 1st lien on the assets of Eathscare, reagrdless of what the financial gurus who approved this thing think. Does anyone really think the bank who provides the bulk of financing for Earthscare is going to be behind the city of Evansville in lien position.
3. Who has vetted the equity investors? Have we seen its/their financials? Why is their money not in first? What happens if they decide to loan the bulk of their investment, without subordinating to the city’s loan. It looks right now as if the city of Evansville is the main investor providing the capital, just like in the McCurdy project, without even bothering to take the current shareholders’ shares of Earthscare as additional collateral.
4. Where is the analysis of the financial gurus on the city council that approved Earthscare’s loan? I would love to see what the have written down on the back of their envelopes. If Friend can even get the numbers to foot and Earthscare has yet to provide an accurate monthly cash flow or capital expenditure budget detail, how can a sensativity analysis be run? How do we know what the plug number is going to be (i.e. the LOC that will be needed to fund working capital or unforseen operating losses that will likely occur). If you think some magical investor equity dust is going to fund that lump of coal, the investor had better be one of the characters from Disney.
To sum it up, no cash flow projections that make sense, no comfort letters from potential customers, no cash equity invetsors yet, and no committment letters from banks. I would love to buy CDS protection on this loan if I could. I could make fortune, like Don Vito Corleone did running molasses out of Canada in the 20’s.
That is one very nice comment.
Kudos.
This is the type of government that they want to export to the entire county? No doubt with Connie Robinson sitting at the top.
What has happened to this city? It looks like a banana republic around here nowadays when compared to the city I grew up in.
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Them Fools and OUR MONEY shall soon be parted. Evansville was a banana republic then too Press. You were just not old enough to have the sense of awareness that you have now.
Is this any surprise? The people of Evansville elected these fools to spend their money–and they are spending it!
Someone called me a racist. I beg to differ. Seriously, does anyone think the same group of people who begged the council to make this loan would have been this supportive of a business that had a group of Chinese, Indians, or Caucasians running it?
No self respecting Chinese or Indian businessman would submit such a sloppy and inaccurate business plan and they would have had their patent situation in order. They also would not have gotten a dime from the dummy’s on council.
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