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» Council to lend food company $744,000

HASSO HERING

A perspective from Oregon’s mid-Willamette Valley

Council to lend food company $744,000

Written July 8th, 2019 by Hasso Hering

The Van Vleet plant as seen from the Pacific viaduct on July 7.

The Albany city budget is so tight over the next two years that a few positions in police and other departments are going unfilled. But this does not apply to the city’s reserve fund that’s available to goose the local economy.

The city council Monday agreed to lend the Van Vleet Meat & Food Products Co. $744,000 to help finance an expansion of storage and freezer capacity at its plant on Jackson Street and Ninth Avenue. The loan, for 10 years at 4 percent interest with a balloon payment at the end, is to supplement private financing through Columbia Bank.

The details escape me, though some of them were explained at the council’s work session Monday in a way I didn’t get. A written outline ahead of time would have helped. But the council didn’t get one with its agenda, as you’d think would be customary and certainly helpful for a major financial action like this.

The council had previosly agreed to make a loan to Van Vleet, but the details remained to be negotiated. Monday’s action, which was unanimous, was to authorize the city manager to sign the loan agreement.

The company is in the wholesale business of supplying food — everything from appetizers to veal, according to its website — and other items to restaurants.

The agreement says the borrower “has proposed to use city funds for an appropriate governmental purpose.” It doesn’t say what that is, but there was talk about street improvements the company would have to pay for, and the street then would be useful to other property owners as well. (hh)


Posted in: Commentary, News

15 responses to “Council to lend food company $744,000”

  1. Gordon L. Shadle says:

    Reserve funds compete directly with the funds needed to provide essential city services (cops, fire, library, parks, etc.).

    But setting aside money for specific contingencies must be done. However, the city is not in the banking business (or, shouldn’t be), and should not put any reserve fund at risk. The city is not a lender of last resort. Risking a reserve fund is not “economic development.”

    If a private business can’t generate sufficient capital to sustain their operation, then they shouldn’t look toward an already strapped city government for help. If the business is unable to compete in the private marketplace, taxpayers shouldn’t be asked to bail them out.

    I suspect this transaction will cause a reduction in trust between taxpayers and the city council. It certainly won’t make residents feel better about where they live.

  2. Ray Kopczynski says:

    “I suspect this transaction will cause a reduction in trust between taxpayers and the city council. It certainly won’t make residents feel better about where they live.”

    Considering the very divergent viewpoints of councilors over many issues, I’m proud of council when I read their vote was *unanimous* on this issue. It was/is the right call.

  3. Chuck Kratch says:

    Get ready Albany voters. Here comes the ballot measure to raise taxes for “police and fire services”. Same old scare tactics. I’m out of empathy for contrived “emergencies”. Taxes are too high now.

  4. hj.anony1 says:

    Oh here is a softball right down the middle…

    “…everything from appetizers to veal, according to its website …..”

    VEAL?!!??! Why not fresh migrant, dark skinned children. Fresh…No?
    Seems like CORPORATE WELFARE!!!!

  5. Fred says:

    Could it be that they used funds from the Gatorade litigation?

    • Yes, it appears that in the current two-year budget period, which began July 1, the city is transferring $3 million from the PepsiCo settlement fund (its remaining balance, apparently) into its “economic development opportunity fund.” In this new fund, it has reserved $1.5 million for “infrastructure projects” and $1,420,000 for “parterships.” The remaining $80,000 is being transferred to the general fund, it doesn’t say what for. The fund is intended as a revolving loan fund to “support job creation through business retention, expansion and recruitment activities.”

      I wondered how much money is left in the economic development fund. Economic development manager Seth Sherry responded: “This is actually a somewhat complicated question as there are outstanding loans and property acquisitions that are in the process of being or will be repaid over time. In terms of committed and available funds though as of today, the balance is essentially zero.”

      Subject for a follow-up story: Let’s get a list of the loans and projects being funded from that source. According to the budget for 2019-21, the fund starts with $3 million and expects to spend it all. (hh)

      • Fred says:

        Zero, really? Maybe they could give you a full accounting as to where that 18 million went. It would be interesting to see how they have spent it.

        • I’ve reported on that over the years since 2010, when the settlement was reached. Among the more recent items was $5 million toward the police and fire stations. I’ll do an update and recap one of these days, but it’s mostly old news. (hh)

          • Gordon L. Shadle says:

            It would also be interesting to know if Pepsi sold the land. I believe the city gets another $5 million when the land sells.

            t’s too bad that the council in 2010 refused to re-invest the $18.5 million to make the land attractive to other businesses.

          • No, SVC Manufacturing is still listed as the owner. (That’s the old Stokely Van Camp company, a PepsiCo subsidiary.)

  6. Ray Kopczynski says:

    GS:
    “It’s too bad that the council in 2010 refused to re-invest the $18.5 million to make the land attractive to other businesses”

    ?? All the necessary infrastructure was built for Pepsi as part of the contract they blew off. The property is ready-to-go for industrial development when it does sell

    • Gordon L. Shadle says:

      This is what Hasso wrote on Sept. 22, 2017. Do you dispute this?

      One hurdle to buying the land for a big industrial plant is the development cost, which includes providing access from US 99E (Pacific Boulevard). The Gatorade project would have required an eastward extension of 53rd Avenue, including a bridge across the Union Pacific tracks. At Ellingson Road, the tracks are considered too close to the highway to allow for all the truck movements a big industry would likely entail.

      Albany had formed an urban renewal district to finance the new road and bridge when the Gatorade project was still alive. The city dissolved that district after the project died.

      After the settlement left the city with $18.5 million in unexpected cash ($1.5 million had been paid to the law firm that negotiated the deal), then-City Attorney Jim Delapoer proposed using most of the windfall to build the road and bridge needed to make the Gatorade land usable for industry. The council considered it but eventually set the settlement money aside as a reserve. Most of the cash has been spent on other projects in the years since.

      https://hh-today.com/gatorade-land-millions-at-stake/

  7. Ray Kopczynski says:

    “Albany had formed an urban renewal district to finance the new road and bridge when the Gatorade project was still alive. The city dissolved that district after the project died.”

    Correct. However, as noted, it became moot when they blew off their contract. It boils down to what kind of industry – and their needs. I stand by my statement that infrastructure has already been built. The option for another URD could obviously still be apropos subject to the type of industry wanting to use the property.

    Side: Note my comments to yours in the same post from Hasso:
    September 22, 2017 at 7:41 pm
    There you go again Gordon. Flogging your dead-horse falsehoods. LOL

    100% BS #1:
    “Because corporate location teams all over the world clearly put a fat red “X” on Albany, Oregon” Show us a single[!] instance. You can’t because it’s just more of your never-ending whining and quite tiresome rumor-mongering…

    100% BS #2
    “the $18.5 million was piddled away on pet projects.”
    The city has used $$ reduce water bills, added to job-creation through the Pipeline project, etc. Gordon just doesn’t like the choices council made. Of course, he’s gone and has no skin in the game…

    100% BS #3
    “the City of Albany has done nothing to make your land attractive to corporate clients.” The city does not own the property — there is nothing it can do to change the property. Gordon knows that too.

    100% BS #4
    “the City has zero credibility on business matters.”
    LOL — The city is doing quite well Gordon. The financial reports we have prove that in spades.

    100% BS #5
    “the City of Albany can’t be trusted.”
    I’ll trust the city over your whining – any day. :-)

 

 
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