Independent Financial Review of the Downtown Convention Hotel Project
“First and foremost, the city laid out an extensive process in the development agreement with HCW that will protect the city’s investment. The approved bonds would not be sold until the bank conducted its own due diligence and provided a commitment letter.
The Administration and HCW agreed to a third party financial evaluation so that an outside entity could review and provide a report as to the credit worthiness of HCW and its ability to fund its portion of the project per the Development Agreement. In fact, HCW has already provided two banking references indicating its ability to fund its portion of the project. HCW also agreed to a background check of the partners involved with the investment.
The City Council recommended Crowe Horwath, a CPA firm without prior experience in reviewing third party financial evaluations between municipalities and private third party participants.
The Crowe Horwath engagement terms called for HCW to also be part of the agreement and disclose specific personal financial information. HCW, maintained from the beginning of Councils request for financial information, that it was willing to provide personal information, but only to a third party company that has experience in financial analysis independent of either party, and any potential conflict of interest; one that performs on behalf of municipalities and protects the rights of the third party supplying such information.
HCW has experience with other public-private ventures and recommended a company known as Springsted, which is one of the largest and most established independent public sector advisory firms in the United States. As an independent advisor, Springsted has no relationship or affiliation with any underwriting firm or private developer. This ensures they work solely on behalf of the clients they serve, providing objective advice and candid evaluations whether they are issuing bonds, selecting investment vehicles or negotiating a development agreement.
Additionally, Crowe communicated directly to HCW this past week that is was not equipped to make the appropriate recommendations, as they are a CPA firm and handle clients in a manner (disclosure and liability) that does not necessarily lend itself to addressing the requirements of a third party financial analysis process.
As of today, we have been notified that Crowe Horwath has removed itself from this process as they were not able to craft a non-disclosure agreement that would protect the private proprietary financial information of the private party to the review process.
HCW has provided the City attorney and City Council’s attorney, a two page non-disclosure agreement that provides the financial information the city needs to determine the financial ability of HCW to comply to the Development Agreement and the protection HCW needs to feel comfortable in disclosing its personal information.
At this point, we are still willing to accommodate Council and answer any final questions that they may have, whether it is engaging another firm or adhering to the defined process already established in the development agreement.
It is our hope that this work can be done in the future to allow a vote on this very important project.â€
Lloyd Winnecke, Mayor
City of Evansville
Let’s give Mayor Winnecke the vote he tried to force on Sept 9. Let’s have an up or down vote on Sept 23.
After all: We know more now than we did then. …
Agreed. Why on earth should we allow HCW to pick the vetting firm? This seems ludicrous in the extreme, yet, if my eye do not deceive me, this is exactly what he’s asking to be done here!
Your eye doth not deceive.
How about the positioning of the City Attorney as a middle-man between City Council and the vetting firm?
It seems that the Administration knows that the only chance they have to take this pot, is with a stacked deck. …
HCW made a recommendation of someone who has experience with this type of financial arrangement unlike the one wanted by John Friend who had no experience. City Council should pick a professional experienced firm and move on.
John Friend sure screwed this up. What do you expect?
I believe the mayor screwed the pouch not Friend!!!!!!!!!!!!!!!!
pooch not pouch
Surely there is someone other than HCW’s corporate vetting firm that is available. Come on Wayne, this makes as much sense as Bashar Assad being assigned to hire someone to count his chemical weapons stash.
I did not say the only firm is HCW’s recommendation. I said pick one who has experience in this type arrangement. Please re-read my comment.
Just think, we have had two mayors in a row who do not understand the concept of FTE employees (FTE equals Full Time Equivalent).
A full time equivalent employee is a combination of one or more employees who works 40 hours per week.
Weinzapfel told the Indiana General Assembly that the new arena would have about 500 plus employees.
Winnecke repeats that the hotel will have 250 employees, but HIS consultant’s report cites the figure of 41 FTEs.
An old English proverb says that “There is none so blind as he who will not see.”
At least this is a new hotel and will create some new jobs. Weinzapfel was so stupid he convinced himself that moving jobs from Weinbach to Main Street was creating jobs. Weinzapfel’s musings make Winnecke’s 250 jobs lies look like Einstein.
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