The City of Peoria is taking close to $500,000 in debt owed by Exposition Gardens off its books.
In one of the more divisive actions during Tuesday’s nearly four-hour meeting, the Peoria City Council voted 6-5 to release the venue’s outstanding fees remaining after Peoria spent $1.2 million to purchase the property at a foreclosure auction in September.
“It makes no sense to me whatsoever to deny taking this debt off,” council member Zach Oyler said in support of the debt forgiveness.
“I know it doesn’t mean anything, but I just I can’t vote for this and just sweep it under the carpet,” countered council member Denis Cyr.
The Expo Gardens debt forgiveness was one of five items originally included on the consent agenda before being pulled for discussion.
Since the completion of the foreclosure sale, Morton Community Bank already received a small portion of a $202,000 deficiency judgement against the property and forgave the remainder.
Peoria still was owed in excess of $287,000 in stormwater fees, and more than $209,000 in outstanding late fees and penalties.
“As part of that foreclosure process, the Exposition Gardens Authority met with the city and the bank, and asked the bank and the city to forgive the additional debt,” said city attorney Patrick Hayes.
Hayes said typically the city would continue to pursue a debt of this size, but Exposition Gardens indicated it would appeal the foreclosure if the city and the bank chose not to forgive the outstanding balances.
“So the bank issued a satisfaction immediately for the outstanding amount of that deficiency judgment,” he said. “I indicated, because of the timing of city council meetings, that I would just ask the council to forgive that debt.
“I did share with council that I think that debt’s likely uncollectible; Exposition Gardens Authority has no operations. They don’t have a place because we’re now in possession of the property.”
Cyr initially moved to deny approval of the staff’s request to forgive the debt. That motion failed on a 5-6 vote, with Cyr joined by Alex Carmona, John Kelly, Kiran Velpula and Mike Vespa in the minority.
“From a practical and fiduciary standpoint, the debt is uncollectible,” said Oyler. “So while I understand the idea that you’re protecting the taxpayer by leaving it in place, you’re actually costing the taxpayer money, because now the legal department will have to continue to pursue this action.
“Not just in staff time, but in financial legal fees and court costs – to then at some point come back again and ask us to write it off. So financially, it makes no sense whatsoever to maintain the debt on the books.”
The subsequent 6-5 vote to approve the debt forgiveness had the same breakdown among members.
“There are a lot of hard feelings around this horseshoe, I think for good reason,” said Vespa, noting Expo Gardens built up goodwill in the community for decades but now clearly does not have the funds to pay what it owes.
“I don’t want to squeeze or impede this organization from doing good, maybe setting up a fair somewhere else, even if it wouldn’t be in the city of Peoria. Ultimately, I don’t see the impetus for us to waive the debt; I don’t see how it’s in our best interest.”
Hayes said Expo Gardens representatives expressed a desire to retain its charter for the Heart of Illinois Fair, “even though they have no practical plan to hold that fair.”
“They expressed that there was some concern that that charter would be in jeopardy if they had outstanding debts,” said Hayes.
Kelly said he didn’t understand the rush to forgive the debt now, when the city could always come back later and take the same course of action.
“It seems to me that sometimes we get into things like this, and there are ramifications of it that we’re not familiar with,” he said. “I think it is likely to make zero difference, but there’s this outside chance that something weird might happen, and I don’t want to have the city exposed to that.”
Council member Andre Allen said he felt it would be best to “close this chapter” and move on from the debt.
“Originally, when we made our initial proposal, we were already prepared to void the debt,” said Allen. “So I think now to continue holding this debt over Expo Gardens, or whoever still represents Expo Gardens, I think at this point really doesn’t make a lot of sense – the old adage, ‘you can’t squeeze blood out of a turnip.’”
Carmona said for him, keeping the debt in place would represent “a measure of accountability.”
“If any of us had debt like this, nobody would let us write it off,” said Carmona, adding that he felt the Peoria’s acquisition of Expo Gardens and the debt forgiveness has resulted in the city becoming “a mechanism for bailout.”
