McHenry County Blog

Yesterday, I started a three-part article about what MCC might do to regain public trust in order to get support for the baseball stadium that four of its board members (George Lowe, Barbara Walters, Mary Miller and Carol Larson) desire so ardently.

With the public relations disaster that McHenry County College has managed to create, it seems to me that the board has to start from scratch.

That's what I told Northwest Herald General Manager and Executive Editor Chris Krug before the McHenry County Economic Development Corporation's dinner last Thursday night.

Admit that the college will be irreparably harmed if it proceeds without starting the process over.

Everyone who thinks the college can pass a referendum, please raise your hand.

Anyone who thinks Mary Miller is not going to be challenged if she runs for re-election next spring, let me know.

And, if you want to run, let me know.

Needless to say, people are organizing to support some opponent of this consistent baseball stadium supporter. In laying her hands on the goodness of the baseball stadium, Miller touted her credentials as a CPA.

Now I know why we don't let CPA's run government.

Earning the designation obviously does not guarantee analytical ability on public policy issues.

Here's how Miller was quoted in the April 26, 2006, board minutes:

“Ms. Miller(‘s) refer(ring) to her CPA standing and stat(ing) that all the figures are in order for us to go ahead with this.”

So, why was a re-do of the numbers necessary after Economics Research Associates savaged Mark Houser's EquityOne presentation she avowed was ”in order?”

In a Freedom of Information request, I asked for any documentation to back up her professional judgment.

Needless to say, there was none.

I was told to look at an analysis of construction costs by PMA Consultants, the same outfit that advised Huntley School District 158 that it needed a 55-cent tax rate hike.

PMA's analysis of construction costs speaks not one sentence about whether the baseball team receipts will pay off the cost of the bonds to build the stadium.

And, that, of course, is the real issue in this fight.

Show me a written analysis of the numbers and maybe I might regain the respect I used to have for the designation “C.P.A.”

So, start the process over.

What does this mean?

Do you know there were two baseball promoters who wanted to build a stadium in Crystal Lake?

One was making real progress in Harvard until the McHenry County College Board decided to ink a sweetheart deal with Pete Heitman, a buddy of Equity One's Mark Houser.

A fresh starts demands that competing promoters be given a fair shot.

Such presentations should be at public hearings, where both the public and the board get to ask questions.

We can hear how much money each group is willing to put up.

How does each propose to pay for the stadium?

What will the amount of public subsidy be, if any?

Harvard's group, by the way, plans to pay for its own stadium; Heitman's wants us to bet on the success of his scheme.

There's absolutely no reason for secrecy.

And, speaking of secrecy, the public has a right to know who the investors are.

When I was at the Crystal Lake City Council meeting looking at the staff reports on various proposals, you know what I found?

Petitioners must reveal everyone who has a beneficial interest in their properties.

The college must demand the same information from those with whom it signs leases.

I was pleased that Krug agreed.

Part 3 tomorrow.

Labels: Baseball Stadium, Chris Krug, CPA, Equity One, EquityOne, Mark Houser, Mary Miller, MCC, McHenry County College

Doing some filing this past weekend, I found McHenry County College President Walt Packard's October 25, 2007 “Information Report” entitled,

The project would require a reported 38 acres, I have been told.

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MCC President Walt Packard is seen in the top picture and the middle one. Behind Packard in the second photo is MCC Board President George Lowe. Economics Research Associates David Stone in the bottom shot.

Labels: Baseball Stadium, David Stone, Economics Research Associates, Equity One, EquityOne, ERA, Mark Houser, MCC, McHenry County College, Walt Packard

Economics Research Associates staffers Richard Starr and David Stone sent a February 26, 2008, introductory letter to McHenry County College President Walt Packard.

It asserts they will expound on the “reasonableness and achievability” in something they allege is a 3rd party analysis of the baseball stadium and Health, Wellness and Athletic Center proposal.

However, the ERA analysts admit no market analysis exists to show that using characteristics of Camden, New Jersey, and Fargo, North Dakota, baseball stadiums are even a tiny bit reasonable.

Remember geometry?

Accept the assumption, even if they are false assumptions, and everything flows from them.

With the wrong premises, logic will lead to incorrect conclusions.

It happened in city X, in city Y, so it could happen in Crystal Lake.


And when the bonds can't be repaid, the board members will say,


In ERA's initial 3rd party review, the authors talked about projected attendance in terms of “capture rate.”

On page 9 of the first review, it says ERA recommends further verification of the projected 52.3% capture rate.

I can't even find the term in the second report.

So what is a “capture rate?”

If the population of the market area is 300,000, a 50% capture rate would mean than annual attendance is estimated to be 150,000.

The first report

“..assumes the team will achieve capture rates comparable to the highest captures in the Frontier and Northern Leagues.”

There is no reference to “capture rate” in the second report, but it is still a relevant concept.

The first report puts it in terms of the market place, but the second ignores the market.

Five teams in Chicago market have capture rates ranging from 5.9% to 52.6%, according to page 9 of the first report.

When you take the market out, use of the terms “reasonable and achievable” in nonsensical. Just because it is reasonable and achievable somewhere else doesn't mean it will happen in Crystal Lake.

In ballpark feasibility studies, all revenue streams flow from attendance.

ERA looks at other teams, but, as ERA points out, “It is not known if the other teams' reported figures represent paid or actual attendance.”

Remember, it is common practice for teams to give away tickets as promotional items.

So, ERA is reporting unaudited numbers. No one, except maybe the investors, look at gate receipts.

Take ERA's minor league attendance figures with a grain of salt, maybe piles of salt the size that should have been stockpiled for this winter.

Likewise, ERA's comments on audience attendance growth from year to year need to be closely examined.

In the last paragraph on page 6, ERA states,

“The assumed 30 percent attendance growth over the first five years...is fairly aggressive, but achievable, particularly considering the relatively low projected attendance rate for 2009.”

What team has achieved that attendance growth rate without expanding its stadium?

River City's Rascals, located in suburban St. Louis on the Missouri side of the river, had a stadium built specifically for the Frontier League team. It has been around the longest.

River City's average daily attendance in the first year (1999) was 3,611. In 2007, the comparable figure was, 2,095. (The 2007 figure is right in the table on page 5.)

That's a 42% decrease.

So, where's the growth found?

How does this fit into the “reasonableness and achievability” predicted by Economics Research Associates?

It doesn't.

It isn't even mentioned.

Let's examine three of the Frontier League teams that ERA considers comparables. Look at the attendance figures for 2005, 2006 and 2007 on page 5.

Not one team cited in the ERA report is shown growing at the rate projected by MCC baseball promoter Pete Heitman.

It's not even close. No wonder the table isn't lined up so one can easily figure that out.

Here are daily attendance figures for 2005, 2006 and 2007 for three of the teams listed.

Suburban St. Louis Gateway Grizzles went from

3,619 to
4,235, then decreased to
4,086.

In Washington, PA, Wild Things attendance for the three years were essentially flat:

3,197
3,251
3,317

Suburban St. Louis River City Rascals:

2,379
2,387
2,095

Obviously none increased 5% a year over the two-year period.

How about Rockford?

That's close by.

You should know that a new stadium for Rockford was financed completely with private money, opening in 2006.

One would assume that the incentive not to lose money (or make money) would be stronger for entrepreneurs than for elected officials. Elected officials, of course, can keep coming back to the taxpayers to get non-referendum taxes; investors can't...or maybe they can, if they are Pete Heitman.

Average daily attendance that first year in the new stadium was 2,463, higher than 2,065, an increase of 398 per game.

The stadium cost $7 million. It cost $17,588 to garner each new fan (on a daily basis).

The second year in the new stadium, attendance did not go up much—twelve fans per game.

In any event, that's not support for an increase of 5% per year by Heitman...

Let alone EquityOne's Mark Houser's forecast a 10% increase in attendance during its second year. (See page 5.)

At least Rockford's new stadium was financed completely with private money.

They weren't using other people's money, like the MCC team.

No wonder ERA didn't emphasize Rockford's problem.

There is no example of any team anywhere (unless major, major capital improvements have been put in) that has the attendance growth and, therefore, the revenue growth as sustainable as the promoters' plan suggests.

Taxpayers have a 20-year repayment obligation, so why do the ERA consultants concentrate on the first five years' performance, which history shows are a team's best years?

Why has ERA ignored the next 15 years?

ERA does conclude,

“...we would not expect for this to continue indefinitely, as attendance would stabilize and potentially decrease (after the five-year projection period). This would directly affect the growth of team and facility revenues” (see top of page 7).

Heitman has attendance increases every year for 25 years, a minimum of 5% per year.

ERA hints that a 5% attendance increase is unrealistic--even as soon as the 6th year--but refuses to point out how this will negatively affect the ability to repay the bonds...which it will.

In fact, ERA doesn't address anything beyond fifth year as far as financing goes, other than to say that attendance might decrease (see top of page 7).

Internet fantasy baseball would cheaper and probably as much fun.

More tomorrow and the days to follow.
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Senior Economics Research Associates staffer Richard Starr appears on top. Below is associate David Stone.

Below, baseball promoter Pete Heitman appears above his buddy Mark Houser in the pictures in this article.

Labels: Baseball Stadium, David Stone, Economics Research Associates, Equity One, EquityOne, ERA, Fantasy Baseball, Mark Houser, MCC, McHenry County College, Pete Heitman, Richard Starr, Walt Packard

When I had my computer replaced, the beginnings of a story on the Northwest Herald's cautioning of the McHenry County College Board restrictions on the First Amendment got forgotten.

You may remember that MCC Board President George Lowe got quite disturbed at

1- my taking flash (and apparently other) pictures of board members in their dimly lit board room

and

2-my informing him that he did not have the power to limit photography all by himself. (Specifically, I told him he would have to pass a resolution.)

Needless to say, what Lowe is really upset about is my blowing the whistle on the board's trying to sneak through a baseball stadium without any public discussion.

You may remember that McHenry County Blog broke the story on Sunday, March 12, 2007.

There had been no mention of a baseball stadium at MCC anywhere else before then.

The MCC Board had been discussing the idea since at least September 2006, but dared not share the possibility with the public.

No public involvement.

The board gave away the store to Mark Houser's Equity One when MCC President Walt Packard signed an incredible $70,000 document on September 27, 2006. It promised,

”At the completion of the feasibility study and independent review, if the College elects to proceed with the project, the College will contract with EquityOne or it’s (sic) assigns to develop the project on the College’s behalf.”

Forget about bidding out or even seeking alternative vendors for significant parts of the baseball stadium and building addition work.

The MCC board even agreed to pay Houser $400,000 more to Houser to, it seems to me, make certain the public would never find out the details of the no-bid spending.

And, no competition would be considered...even from a Harvard group with private financing.

Houser's buddy and business associate, baseball promoter Pete Heitman, would get that 20 year plum.

And the board was not even smart enough to require that the names of the minor league baseball team investors be revealed to the public.

Or maybe they deliberately didn't want the taxpayers to know.

After all, knowing those names might go a long way toward explaining the board's stubborn support of the scheme.

The baseball stadium idea is so far off the educational mission as to have cost the college a million dollar contribution from Crystal Laker and former teacher Geraldine Cowlin.

That money was to go for scholarships for students who could not afford to attend MCC.

Many of use marvel at school referendum rhetoric from tax hike supporters couched in


In MCC's case, I wish I could hear such rhetoric from the board majority.

How can a scheme that has cost “the children” $1 million in scholarship money be “for the children?”

Sorry for the digression, but every time I think about the board's scheme to pick our pockets with its baseball stadium scheme, my blood pressure goes up.

Guess this article is too long already. I'll continue it tomorrow and finally get to the Northwest Herald editorial.

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At the top is a photo of McHenry County College Board President George Lowe. Three images of the McHenry County Blog story that first revealed that MCC was planning a baseball stadium are on the upper right. Next is the picture of a smiling Mark Houser from EquityOne leaving the board room, obviously in a very good mood. Below the rendering of the privately financed minor league baseball stadium planned for Harvard is a photo of MCC's favored baseball promoter Pete Heitman.

Labels: Baseball Stadium, Equity One, EquityOne, First Amendment, George Lowe, Geraldine Cowlin, Mark Houser, MCC, McHenry County College, Northwest Herald, Pete Heitman, Walt Packard

Here is the second part of Jane Collin's advice to the McHenry County College board.

This section concentrates on accountability. Take a look at the amount of money that Mark Houser of Equity One has been paid and the lack of documentation for what he has done to earn the $400,000 in MCC taxpayer dollars.

And, notice Collins' questions about the possibility that the college is using Houser's company, EquityOne, to hide what it being paid to FCL and Cornerstone, companies that are presumably doing work for the college.


II. Demonstrate a willingness to be held accountable.

Exercise prudent fiduciary oversight over District investments of taxpayer monies. Some trustees have failed and continue to fail to acknowledge that impartial third party reviews and experts have demonstrated that the proposed Sports & Entertainment complex is not a sound investment of taxpayer dollars. Instead, this would be a public subsidy for private investors.

A specific example of failed oversight:1. Mark Houser still being paid for a project that supposedly has been put on hold. (Mark Houser received all of the “Release to Begin Development” money: August 2007, $220,000; Sept. 2007, $100,000; November 2007, $80,000.)

2. Where is the tangible evidence of what the District has received in exchange for the $400,000 paid to Mark Houser, i.e., “the items that need to be started and or completed prior to the City of Crystal Lake’s final approval of the PUD include full architectural and engineering drawings, full specifications, full bid packages and bid reviews along with solicitations for naming rights, sponsorships and indoor center user groups.” Para. one, “Release,” 5-10-07.

3. Missing from Mark Houser one-page invoices: itemized hourly rates, services/tasks performed and by whom.

4. Does Mark Houser serve as a “pass through” for monies paid to FCL, Cornerstone and others with whom the District does not have executed contracts?

5. What financial and legal liability has this Board incurred in this “pass through” arrangement to those being so paid – to the engineering firm FCL has hired, for example?

Labels: Baseball Stadium, Equity One, EquityOne, Jane Collins, Mark Houser, MCC, McHenry County College

It’s pretty clear that the Northwest Herald biggies have decided it’s pile on time in the Huntley District 158 School Board controversy.

And who are the editors piling on?

Is it the policeman who called the two minority board members, Aileen Seedorf and Larry Snow, terrorists?

Not a chance, although this editorial is big enough admit that School Board President Shawn Green’s “likening Seedorf and Snow to terrorists was way over the top.”

Later in the editorial, noting that fellow majority bloc board member Tony Quagliano has apologized for physically threatening a woman, the Herald biggies suggests Green should also apologize.

Isn’t that special?

Not a word about his refusal to do so last Thursday night.

It’s a good thing the two minority board members don’t have an attorney friend or Green could be in a position similar to the Northwest Herald’s sister paper. The Kane County Chronicle lost a libel and false light suit when Illinois Supreme Court Justice Robert Thomas successfully sued it.

I’d love to see a Green lawyer trying to defend a policeman, whom one would think would have had some training in recognizing terrorist acts, who labeled his fellow board members as “terrorists,” wouldn’t you?

It cost the parent company of the Northwest Herald (and/or its insurance company) a goodly sum of money after it lost a jury trial. I wonder how much a jury would award to Seedorf and Snow, should they sue Green. Since the terrorist charge was made to a newspaper reporter and not at a board meeting, I would think the district would not pay his attorney in such a suit, wouldn't you?

Paying for legal fees alone might put Green in big financial trouble.

What if one of the two minority members had called Green a Nazi for his desire to stifle debate on the school board he chairs?

Would Seedorf and Snow have gotten off as easily as Green did in the Northwest Herald?

But stiffing debate is just what the editorial suggests, so no problem for Green and the majority bloc there.



Group editor Chris Krug put in two more cents in his Sunday column (paragraphing added):

“Should I have written about the shenanigans in Huntley School District 158?

“According to published reports in the Northwest Herald, a handful of school board members had a little dust-up while banging the chalk out of the erasers. Although there was no hair pulled or knuckle sandwiches served, it appears as if fighting words were exchanged.

“Settle it at the bike rack at 3 p.m., gang. We’ll Webcast it.”

Krug, of course, is the one who called opponents to the McHenry County College baseball stadium “cranks, crabs and curmudgeons.”

I guess we opponents should be thankful that Krug is familiar with libel law and didn’t call us “terrorists.”

Cindi Wyss, the person just named community editor for Huntley and Lake in the Hills and nearby communities, also expressed her opinion of the situation:

“If I were a Huntley taxpayer, all I’d want for Christmas would be a functional school board. Threat allegations between board members. Complaints filed with police. Complaints filed with the state’s attorney’s office.

”Community leaders? More like Jerry Springer guests.”

I, for one, hope she assigns Huntley reporter Tom Musick to find out who has made what allegations to whom. Who pointed out what laws were broken by whom?

Of course, I hoped the Northwest Herald would report on the devastating critique by Economics Research Associates of EquityOne’s financial projections on the baseball stadium, but they are still being withheld from readers’ eyes.

From her past columns I must admit that I would have thought that Wyss would have empathized with a woman being threatened with physical violence. I wonder what Wyss would have done if someone had threatened her with physical violence.

Keeping silent would not be in Wyss’ nature, I’d be willing to bet.

Labels: Chris Krug, Cindi Wyss, Economics Research Associates, Equity One, EquityOne, Northwest Herald

Guess I was wrong as to why Richard Starr and David Stone of Economic Research Associates came to the McHenry County College Board meeting.

Starr said he had been invited by MCC President Walt Packard.

Since ERA did the devastating analysis of Mark Houser’s Equity One’s feasibility study of the baseball stadium, I figured the board majority was going to ask for a re-do.

You know, something that would make it look like a baseball stadium could pay for itself.

But, no.

The presentation by Starr was more a sales pitch on how ERA could gather partners together and make the stadium work. Partners like the real estate industry, the hospitals, the county, a city, etc.

“You have a complicated situation here because you’re on your own,” Starr said.

Then he quoted one of the senior members of the firm:

”Whoever benefits pays.
“Whoever pays benefits.”

He said ERA tries to merge interests to see “how can all (the players) benefit.

“You have a great market and there should be a lot of people interested in making it a better place to live…We do market research.”

But Starr still wanted to include not just the hard financial benefits of the project, but the unquantifiable “quality of life” benefits.

“How can (a community) be more competitive?” he asked, pointing to “sports facilities” as something that could cause a community to stand out from its neighbors and cause “someone to move there.”

So, I’d have to conclude that Starr and associate David Stone were in salesman mode, not analyst mode.

They seemed to be pitching for the job that EquityOne got. McHenry County College has committed to paying Houser’s firm $470,000 and untold amounts to the two firms he selected—Cornerstone Architects and FCL Builders.

And, the firm of Economic Research Associates is probably a good deal more qualified for putting together something that would work than Equity One.

It’s founding principals created the “world’s biggest carnival” for Walt Disney and have planned all of the other Disney theme parks.

Just to give you an idea of what ERA might bring to the table, Starr suggested out in the hall to reporters that apartments could be built along the edges of the ball field. They would make great seats for the few nights a year when games were played and, if a nightclub were nearby, they would be attractive to young singles.

Starr echoed the enthusiasm Crystal Lake Mayor Aaron Shepley had for the townhouses in the Barton Stream subdivision annexed across Route 14 from MCC. Shepley thought they would appeal to students.

Starr just put a more interesting twist on it.

Maybe Huntley can incorporate that idea into its plan for a baseball stadium.

Or maybe Barton Stream’s developer will change his plan to include a baseball stadium.

I still think any stadium should be put in a mined out gravel pit.

ERA’s Stone did mention “3rd party analysis. We are good at making interesting things boring…The bottom line for us is generally the bottom line.”

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All the photos but the one on the bottom right are of Richard Starr of Economics Research Associates. On the bottom right is ERA's David Stone.

Labels: David Stone, Economics Research Associates, Equity One, EquityOne, ERA, Mark Houser, Richard Starr

Who would have ever thought a weekly newspaper would be providing better coverage of the McHenry County College baseball stadium proposal than the Northwest and Daily Heralds?

It’s not easy for reporter Pete Gonigam to do, but when neither of the Heralds did a story about consulting firm Economic Research Associates’ (ERA) analysis of Mark Houser’s Equity One feasibility study of his baseball stadium promoter buddy Pete Heitman, the opportunity arose. Gonigam ran with it and his article appears today in the Algonquin and the Cary-Grove Countrysides

Gonigam wrote a story last Thursday about how the project would lose money for the first five years. Today, he follows up with one on the reliability of the financial projections.

Since a representative from ERA will attend the 7 PM board meeting tonight at the Crystal Lake campus seeking input on a re-write of its really critical April 4th report, I imagine that at least one of the Heralds will do a story.

It will be interesting to see if any of the negative comment of the April analysis, which was posted on the MCC web site the same day as the heavily redacted feasibility study, will make it past the editors to the printed page.

You know how mutual funds are required to say that past performance is not a guarantee of future performance?

But, we all know that’s pretty much all there is to guide our judgment as to whether make an investment.

Gonigam decided to find out how well EquityOne’s last project performed.

Here’s what he found out about the Village of Libertyville’s $29 million Sports Complex:

”… (the) project has lost $4 million in the last five years."

More:

”Contrary to projections and despite layoffs and bond rescheduling, the complex has been such a money-loser that the village for two years has been trying to sell two of its three parts.”

And more:

” Several MCC trustees visited the Libertyville Sports Complex earlier this year but when asked if they had looked into its financial situation. Chairman George Lowe, Jr., replied simply, ‘No.’”

Houser said he didn’t do the projections on the failing part of the project—the Family Entertainment Center and the Golf Learning Center.

But he admitted accepted what turned out to be faulty, that is, grossly overoptimistic village staff projections and, as the story says, “took on the development.”

The story points out that the ERA critique of Houser’s feasibility study does not reserve 10% of revenues for stadium repairs and upgrades in 10-15 years.

Concerning attendance, the study observed that attendance

• “would actually be the most aggressive of the five local Chicagoland teams”


• its “assumed growth was implausible,” as the story put it.

The April ERA study pointed out,

"The initial 3,125 (fans) per game ... is reasonable but continually increasing (attendance) ... seems aggressive and would put the MCC stadium at one of the highest in the Frontier League."

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Mark Houser is seen in his first public appearance before the McHenry County College Board. Below and to his left is baseball promoted Pete Heitman taking a picture of me taking a picture of him at the same meeting. Heitman was identified as being with Equity One in a meeting agenda I got after filing a Freedom of Information report. McHenry County College Board President George Lowe is beneath the drawing of the baseball field. The photograph of the people lifting weights on the hardwood floor was taken from the Libertyville Sports Complex web site.

Labels: Baseball Stadium, Equity One, EquityOne, George Lowe, Mark Houser, MCC, McHenry County College, Pete Heitman, Pioneer Press

Tonight at 7 at the McHenry County College campus board room, people will be able to offer advice to trustees as to what instructions should be given its “due diligence” analyzer of Equity One’s Mark Houser’s and his buddy baseball promoter Pete Heitman’s numbers.

Yesterday, I jotted down some quick things I think the Economic Research Associates folks should answer.

Today, McHenry’s Steve Stanek adds a list of questions. He’s busy tomorrow night at his day job, so to speak, with the Heartland Institute, so feel free to ask these yourself, if you attend.

1) Can a MCC board member or President Packard cite any independent economist who believe public funding of sports facilities is economically beneficial on a regional basis? Who are these economists and how do they respond to the overwhelming opposite view of other economists?

2) Are any MCC board members or staff members willing to sign a contract to fund, out of their personal resources, any shortfall between projected stadium revenues and actual revenues, at any time during the term of the debt?

3) Are Frontier League officials or team investors willing to sign a contract to fund, out of their personal resources, any shortfall between projected stadium revenues and actual revenues, at any time during the term of the debt?

4) The Chicago Tribune several months ago reported Crystal Lake City Manager Gary Mayerhofer started all this by approaching Mark Houser and his associates with the idea of building a minor league stadium at the college. Why did a stadium become essential to the expansion plans when plans were being laid without a stadium?

5) Did anyone on the college board worry about the perception of using millions of dollars of borrowing to help people who have a personal relationship with the Crystal Lake City Manager? How many residents of the McHenry County College district have that kind of pull?

6) How did college and city officials arrange their discussions of the baseball stadium proposal to avoid breaking the Open Meetings Act? How were these discussions actually conducted? Who conducted them?

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The head shot is of Crystal Lake City Manager Gary Mayerhofer.

Labels: Baseball Stadium, Equity One, EquityOne, Gary Mayerhofer, Mark Houser, MCC, Pete Heitman

How many weekends has it been that Northwest Herald editor Chris Krug has been making favorable comments about a taxpayer- supported minor league baseball stadium?

Maybe it’s time for a retrospective.

First, on October 21st, it was


Krug pointed out that the “naysayers” criticized McHenry County College for not releasing the feasibility study Mark Houser’s EquityOne did of his baseball promoter buddy Pete Heitman’s projections.

Interestingly enough, Krug did not reveal that the NW Herald asked for it…twice. That tidbit wasn’t dropped until last Sunday.


This devastating analysis of the feasibility study was written by Economic Research Associates. It pretty much says the same thing other economists have concluded, that is, taxpayers have to subsidize baseball stadiums for them to make it.

It is due to be revised.

Want to bet the NW Herald will trumpet the new, rosy analysis?

I found it a fascinating conclusion from a consultant. Consultants usually bring in the advice that the governmental officials want and pay for.

47 reader comments were under this first column.

I’m not sure it was this week (and I’m surely not going to read all the comments again to see if this is where I saw it), but one commenter pointed out that the Chicago Tribune owns the Chicago Cubs and, if the NW Herald really wants a baseball stadium as much as its editor says, the NW Herald could build it.

Maybe they would come.

On October 28th,


This was the “The cranks, crabs and curmudgeons were right” column.

I think he missed “tightwad” and “cheapskate.”

But he did add “boo-birds.”

He bemoaned that they would not, “…invest in something that everyone from McHenry County could share.”

But no tax district cares to test whether people want a baseball stadium with a referendum, right?

53 reader comments.

On November 2nd, Krug took a break to promote what the NW Herald thinks will be money making idea. But he couldn’t resist suggesting that the Gala and Lakeside Festival could be moved to the empty land at McHenry County College, if the neighbors don’t like the two-week disturbance.

And this past Sunday, on November 11th, Krug shined more wattage on his viewpoint:


For the first time, Krug reveals the NW Herald filed Freedom of Information requests for the feasibility study done on Pete Heitman’s baseball stadium projections by his buddy Mark Houser of Equity One.

Note that the paper did not consider the two turn downs were worth an article. Nor were they worth a suit against MCC to pry them loose.

And, Krug says, “there is plenty of room for interpretation.”

Yet, the NW Herald has not yet run a story on the analysis of the feasibility study by Economic Research Associates that the college paid good money for.

Here’s the only part I’ve seen. It was in the most recent Krug column:

“Our experience is that these facilities and programs usually have a difficult time generating a positive cash flow and as a result are often public projects. Your upscale suburban market is probably the most feasible location to have a profitable program.” (emphasis added)

Even the two sentences Krug quotes are not favorable ones. Read the whole summary here.

Krug ignored this sentence, for instance:

“Again, most of ERA’s baseball market analysis / feasibility assignments have been for public clients since the programs generally do not generate enough revenues to cover their development and operating costs.” (emphasis added)

Maybe he thought it was too duplicative of the one he quoted.

But, he doesn’t mention the “need for budgeting the eventual facilities improvements and upgrades.”

Talking about what a big step toward transparency the release of the feasibility study is, Krug comes up with this really cogent thought:

“Sometimes it seems as if the college’s governing board – like many other government bodies – confuses itself with private business.”

He is so right.

Read what Pioneer Press got from MCC Board President George Lowe:

“Like any business, the first three to five years are the most difficult."

Why should McHenry County taxpayers take the risk for a baseball promoter who can back out at any time?

Why should anyone think that government is capable of making good business judgments?

I learned that when I was the U.S. Bureau of the Budget’s budget examiner for the Small Business Administration. The SBA could not even tell me its loss ratio. Any bank could have produced that information in 1965.

Not many comments to Sunday’s column.

Maybe opponents to putting a baseball stadium on Crystal Lake’s watershed and opponents who don’t want McHenry County taxpayers to be the ones to have to bring bags of money to bail out a failed baseball team don’t mind if Huntley, McHenry or Woodstock taxpayers are put on the financial hook.

Just in case you missed a really comprehensive article on the MCC baseball stadium in weekly Pioneer Press’ Algonquin Countryside by Pete Gonigam that I linked to on Sunday, here’s where you can find it. It actually has information the Northwest Herald has not yet published.

But, that would not surprise you, would it?

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Pete Heitman is the head shot on the left with Mark Houser's on the right. The large photograph is of Northwest Herald Group Editor Chris Krug.

Labels: Baseball Stadium, Chris Krug, Equity One, EquityOne, Mark Houser, MCC, McHenry County College, Northwest Herald, Pete Heitman

You would think the Northwest Herald would have been hounding McHenry County College for last fall’s $70,000 feasibility study on the baseball stadium as much as McHenry County Blog has.

It would seem to be a First Amendment issue to me.

Even so, I am grateful for Regan Foster’s article.

And I am grateful for Kerry Lester’s Daily Herald article.

Look what Lester got feasibility study author Mark Houser to say:

”While this project meets collegiate needs, if it were analyzed purely from the perspective of private sector investors, it would have limited investment appeal” (emphasis added).

And,

“If the project were treated as a self-sustaining business venture, Houser said, it has ‘excellent potential of succeeding.’"

That's the best he can do.

I am disappointed that there was nothing in either newspaper about the devastating analysis of that feasibility study by Economic Research Associates, paid for by MCC and available to board members seven months ago, in April, which McHenry County Blog ran yesterday.

The ERA analysis does not jive with Houser’s optimism about his buddy baseball promoter Pete Heitman’ numbers.

In case you missed some of its salient conclusions, here are a couple:

“1. Our experience is that these facilities and programs usually have a difficult time generating positive cash flow and as a result are often public projects. Your upscale suburban market is probably the most feasible location to have a profitable program.” (emphasis added)

“3. Again, most of ERA’s baseball market analysis / feasibility assignments have been for public clients since the programs generally do not generate enough revenues to cover their development and operating costs. The public sector gets involved using their borrowing power and justifies the project costs because of its economic and community benefits (i.e., quality of life, increased property values, new visitors to the area, community image, etc.)” (emphasis added)

“4. Our assessment reveals several areas where more clarification would be helpful including the need for budgeting the eventual facilities improvements and upgrades, further clarification on non-team activity and the indicated commitment from the League.” (emphasis added)

There is more, but you can read it, plus my comments in the original article yesterday.

I do wonder if the Northwest or the Daily Herald will publish this critique in another article or just ignore it.

Labels: Baseball Stadium, Economic Research Associates, Equity One, EquityOne, Friends of McHenry County College, Mark Houser, MCC, Pete Heitman

Well, well, well.

The Top Secret, Hush, Hush feasibility study on how a minor league baseball stadium can pay for 36% of the cost of the proposed McHenry County College

The original construction cost of the stadium was to be $10 of the total $26 million cost.

When I do the division it shows the baseball stadium would be 38.5% of the total construction cost.

So, let me put on my cost-benefit comparison glasses, obtained at the United States Bureau of the Budget at my first grown-up job in 1965 and tell you what I see.

Revenue 36%.

Cost 38.5%.

Conclusion: baseball stadium does not pay for itself, let alone subsidize the classrooms, offices and gyms.

And the 38.5% figure is by no means guaranteed revenue, because Pete Heitman’s limited liability corporation can walk away from the deal and leave the taxpayers study with paying off the bonds anytime it wants to.

Can’t wait to see if the extra bond interest on the stadium (because they cannot be tax exempt bonds—private enterprise doesn’t qualify for that privilege) is included in the cost of the stadium.

I’m starting to read it now.

So, amazingly enough, can you.

MCC actually posted it on its web site here.

Email McHenry County Blog your observations.

Let’s do some collective analysis. All our minds together certainly have to be better than mine alone.

See if you can find the “trade secrets” used to deny access to four of my Freedom of Information requests.

Labels: Baseball Stadium, Equity One Development Corporation, EquityOne, Feasibillity Study, Mark Houser, MCC, McHenry County College

I read the minutes (click to enlarge) of the October 4th McHenry County College meeting last week and was struck with the misrepresentation of the public comments made.

Here’s what the minutes say about Barry Glasgow’s scathing criticism of the baseball stadium:

"Mr. Glasgow spoke about the need for a nursing program."

Yes.

He did mention that, but he also talked about not seeing anything in the MCC mission statement about entertainment.

He talked about the baseball team promoter having virtually no risk.

Here’s part of what he said, none of which made the minutes:

“If they don’t have of their own money in it, they have no risk.

“We’re at risk for $45 million.”

He talked faster than I could write, but I did get these question:

”Did they give a five-year prepaid lease?

“Are they putting anything where their mouth is?

“The reality is we need a nursing system.

“It would be nice to have a baseball stadium.

”Do we have their personal guarantee?

“Is it an LLC (limited liability corporation [which it is]) and they can just walk?”

I guarantee the nursing program portion of his comments was not the most significant part of this former investment banker's presentation.

I spoke after the Committee of the Whole meeting where Equity One’s Mark Houser was questioned on the expansion project.

Please compare my notes with what ended up in the minutes.

The minutes:

“Mr. Skinner congratulated the board for being more transparent, and then asked several questions of the board.”

My notes:

1) You’re getting more transparent. The type of discussion you have had tonight you should have been had in March.

2) To prove you are being transparent I ask for copies of the 4-page cash flow statement and the GANT chart present tonight be made available tonight. (They weren’t. I had to file a Freedom of Information request. It took 11 days to get them.)

3) I asked for the feasibility study, which I had already been refused 4 times. No dice.

4) I suggested if the college really wanted to be energy efficient, they should be building their gyms and offices using Solarcrete.

5) I asked if there would be an arcade in the baseball stadium that could suck up student’s money. I was told there would not be.

6) “Does the license factor in the extra interest cost on the $10 million stadium?” I asked. I got the feeling this was a question that had not even been considered. Because the stadium is not a governmental function, the college cannot issue tax-free bonds to finance it. Taxable bonds, of course, bear a higher interest rate.

7) “Are you and other MCC officials going to get free or discounted tickets?” was my next question. The reaction from Mary Miller was pretty much “Of course not.” But neither my question nor her and others’ negative reactions show up in the minutes. I pointed out that some park district that own golf courses let current and retired members play free.

8) The question had arisen in the discussion of the building project about how high the contingency fee should be. Ron Ally, the top finance guy, favored raising it from 5% to 10%. I pointed out that the Jefferson Wells forensic auditor of the Huntley construction projects said he raised his eyebrows when construction costs are higher than 5% of estimates and recommended the college stick with the 5% figure.

9) I asked if the board members knew about the allegations I’d read in a newspaper article that were made in a Wisconsin suit against baseball promoter Heitman. I heard one “Yes” and one “No.”

10) Finally, I asked why MCC was not offering to eliminate phosphorus on all of its property, including the farmland they want zoned for 50% impermeable coverage. I told them of a presentation made at the Crystal Lake Kiwanis Club about row crops being grown without phosphorus. I did not recommend the source of nutrients –pig farms--be allowed near MCC, but I used it as an illustration that it could be done if the college really wanted to protect Crystal Lake’s watershed.

I could go back to my notes for the others who made public comment and show how deficient the minutes’ representation of them are, but why bother?

Transparency is obviously not the goal of the person who edited these minutes.

Labels: Barry Glasgow, Baseball Stadium, Cal Skinner, Equity One, EquityOne, Mark Houser, Mary Miller, MCC, McHenry County College, Ron Ally

I found this headline in the Chicago Sun-Times.

It was under the face of Cook County Board Chairman Todd Stoeger.


it says in big bold letters.

It applies not only to Stroeger in his lust for higher taxes, but to the message so far given by McHenry County College board members concerning its proposed baseball stadium.

A large part of the board does not want anyone questioning its judgment about the baseball stadium’s subsidizing the project.

Given the dismal record of stadiums elsewhere, a lot of us are not in a trusting mood.

Quoting a Russian folk saying, President Ronald Reagan advised,


I can even go that far.

Show me the feasibility study that Equity One’s Mark Houser did of his baseball-promoting buddy Pete Heitman’s projections.

Subject them to outside scrutiny for the first time.

While I am no expert in baseball, as Heitman was so kind as to point out to me at the last MCC meeting (“You don’t know anything about baseball.”), I have been examining numbers governmental since 1965.

The college held no public meetings about the baseball stadium until Crystal Lake Planning and Zoning Commission member Vincent Esposito suggested some would be a good idea.

Well, tonight at 6, MCC is holding a board meeting at the college.

If you were not in a trusting mode during the run-up to the Crystal Lake City Council defeat of the college’s re-zoning proposal, you might want to attend.

And sign up to speak your piece at the beginning of the meeting.

Since Huntley and other county towns are now courting Heitman, you might want to encourage the trustees to let those towns go it on their own.

If the members of their ruling board are willing to listen to Heitman's, Houser's and Frontier League Commission Bill Lee's pitch in public, so be it.

Just don't ask me to help subsidize this private entertain enterprise. I have better uses for my tax dollars.

MCC does not even have to be involved in building a baseball stadium in Huntley, McHenry or Woodstock. (Algonquin is also interested, but Algonquin is not in the college tax district.)

I believe only if the board hears in its own boardroom what you think about its proposal is it likely to ask some outsider like Lake Forest College sports economist Robert A. Baade or someone with similar credentials to check out Heitman’s projections.

And, if you don’t think they ought to be in the entertainment business at all, tell them that.

After all, if you look at the vision statement etched in glass on the boardroom wall, you will find not a hint that entertainment is part of the college’s mission.

And, tell them anything else you think appropriate.

Labels: Baseball Stadium, Bill Lee, Dr. Robert A. Baade, Equity One Development Corporation, EquityOne, Mark Houser, MCC, McHenry County College, Pete Heitman, Todd Stroeger, Trust Me

On October 4th, the date of the last McHenry County College board meeting, I asked for copies of the meeting handouts from no-bid $400,000 oversight and coordination guy Mark Houser of Equity One and no-bid construction management company FCL Builders' Carrie Carney.

While any responsible local government would have made them available to the audience on the night they were made public, MCC did not.

I had to wait 11 days.

And, MCC couldn’t scan them and email them to me.

Oh, no.

But, they could hire Chicago lawyer Howard Metz to send me a letter. He wouldn’t return my phone call yesterday though.

The college made me drive out to the campus and write a check for sixty cents.

Pretty petty, but that’s what we’re dealing with here, folks.

So, what was in the documents that were withheld for eleven days?

The FCL-prepared GANT chart presented by Carney caught my immediate attention.

Enlarge it and look at the detail through October 16th.

That’s today.

“CL City Council – MCC Preliminary PUD Approval” is listed as item number 6.

Look at the date to the right.

It says, “10/16.”

Guess the college contractor knew with a large amount of certainty that council approval was in the bag at least 12 days before the official vote, the Thursday before last.

I wonder what gave her that idea.

Doesn’t that give you confidence in the openness of local government around here?

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While the decision may be in the bag, it seems to me that those really concerned about the issue should go city hall for Tuesday's night's 5:30 PM meeting. They should also call their city councilmen. The numbers are in an article above.

The photo at the top shows Equity One's Mark Houser and FCL Builder's Carrie Carney at the October 4, 2007, McHenry County College Board's Finance Committee meeting.
Below is a close-up of Carney.

Labels: Baseball Stadium, Carrie Carney, Crystal Lake City Council, Equity One, EquityOne, FCL, Freedom of Information Act, Friends of McHenry County College, Mark Houser, MCC

Hire Mark Houser of Equity One.

That’s what McHenry County College did for its new baseball stadium and health and fitness center.

It’s old news that Houser’s $70,000 consulting contract study convinced McHenry County College to build a baseball stadium. I’ve asked four times for the study through Freedom of Information requests and been turned down every time.

Apparently, when a junior college wants to spend $35 million the reasons why don’t have to be shared with the publ