Is this Deja Vu? Another Peoria developer is requesting a “special” tax to cover the expenses associated with running a business. On Tuesday, developer Gary Matthews will come, hat in hand, seeking a 4% tax at the Pere Marquette and Marriott Hotel to help him repay his multi-million dollar outstanding loan to the city.
The Peoria City Council loaned $7 million to Matthews for the redevelopment and revitalization of the historic Pere Marquette. Unfortunately, in just a few years upon the project’s completion, trouble has already surfaced. Peoria Public Radio’s website recently reported that Matthews still owed a balance of $6.7 million to the city and that the developer has stopped making payments. To make matters worse, the developer is now fighting off other creditors and appears to be facing foreclosure. Adding insult to injury, Marriott, the world’s largest hotel chain, has now threatened to pull its affiliation with the property if the finances are not rectified. Bottom line, if the loans default… Peoria could lose its nearly $8 Million dollar investment with nothing to show for it but a big write off.
In the book “Economics in One Lesson”, revered financial thinker, Henry Hazlitt, said that government business loans actually tax successful private business’ to assist an unsuccessful private business. In this case, the clients of the hotel have to bail out Matthews with the 4% tax.
City Councilman Riggenbach has stated that protecting the taxpayers is what matters. This tax would not protect the taxpayer, it would be an attempt to bail out Matthews. The taxpayers which have already paid millions, will now
pay more to pay back its own loan. This is exactly why Government should not pick winners and losers.
Like the recent Portillo’s debacle, where Willy Torchia was selected as the beneficiary of a lowered risk development, Matthews could be gifted city assistance on his loan. It begs the question; are there any other business’ that owe the City money? Peoria is setting precedent that shows the City is willing to throw Peoria taxpayer money on bad investments with little regard for consequences.
George Santayan said “Those who do not learn history are doomed to repeat it”. Libertarians believe the best course of action is to avoid this sort of entanglement in the future. The City Council should not allow this 4% tax for Matthews.
Libertarian Party of Greater Peoria