Since: Jul 17

Location hidden

#1 Sep 27, 2017
The hotel deal is complete with 25% of the initial hotel expenditure for acquisition and renovation coming from taxpayer money.

The elderly in our community should start adding that to their obituaries "Part owner in Ashland downtown hotel", and our young can add it to their loan applications as an asset or to impress employers on their LinkedIn accounts.

The paper quotes Pullem as "being choked up" during the announcement. If I were him I would be a LOT choked up. It is his name that is attached to this taxpayer funded venture, for better or worse.

If you look at the ADI's published numbers, the taxpayers (whether through TIF or general fund) are on the hook for the first 25% cost of purchase and rennovation or $4.6 million. Ashland has to pay this money back no matter what happens and the quote that the new owners expect full occupancy at $170 per night when it has never drawn more than 1/3rd occupancy should make Pulllem's voice quiver a bit.

Add to that the proposed $14 million parking garage (convention center) that is promised and we have the taxpayers shouldering the risk for $18.6 million dollars.

The TIF, at best, is anticipated to "maybe" bring in $16.5 million. Seems we are a couple million short on TIF even if accepting the inflated numbers presented by "bond experts". These same experts gain financially whether the hotel succeeds or fails as there job is to promote bond loans and make money for the bond lenders.

The only one on the hook for the money is the Ashland taxpayer. We are the only ones that can't walk away if this doesn't succeed.

What do you think? Would your voice quiver a bit when it finally dawns on you that your name will forever be linked with this debt?

There are very real reasons that governments should not risk taxpayer money in private projects. Most government officials are terrible at capital ventures, their world revolves around spending others money, not making profit. These are two different worlds and, when they collide, the damage is usually to the government sector.

Did any of the taxpayers get a chance to vote their pocketbook on this project before our "leaders" jumped in and committed our money? TIF or no TIF, this is still our money and they have thrown it on the roulette table and spun the wheel. The taxpayers general fund is the security for this loan.

I hope for all of us that Pullem is better at his job than I give him credit.
Vegas Gambler

Ashland, KY

#2 Sep 27, 2017
How appropriate that Pullem initiated this taxpayer gamble while spending taxpayer money on a trip to Vegas!

You are right in your opinion Overseer, not the right man at the right time. He and the Commissioners don't know what they are doing but feel the need to stroke their egos by doing something.

This debt will be a burden to the citizens for 20 years and quite possibly doom any future hope for Ashland when we are stuck with the long term bond debt without downtown success.

Fools rush in!

And how in the world did Eastwood set the treatment plant on fire? Water outages, businesses being driven out of business due to his poor planning and oversight, and now treatment plant fires. Glad his new departmental digs are on schedule.

Why do we always do this to ourselves Ashland? Is there a common sense gene missing in Eastern KY?

Most would rather have a hurricane hit than employee Eastwood, the results are the same but we don't pay salary, benefits, and insurance for the hurricane. Eastwood will take us to third world status soon.
Optimistic For Ashland

Philadelphia, PA

#3 Sep 28, 2017
To be able to attract more business, and more money into the downtown area, something had to be done to restore this landmark building. Ever been to Pikeville? Their downtown had been rejuvenated and is thriving. They took some chances, which have paid off. The hotel has been an eyesore and a liability to the City of Ashland. Mr . Spiros and Mr. Nizzo own properties all over, and are very highly regarded. They run a quality a operation and I know this personally. Glad to see an investment like this is being made. REBUILD ASHLAND. An addition of Marriott will enhance our quality of life and boost local retail business. Hopefully, we can see an infusion of office exposures once again in the downtown. Better to see suits from Braidy walking our streets than junkies. Inaction on the hotel undoubtedly would have led to further decay and would have been the kiss of death for local business. HOPE and EXCITEMENT are in the air!
Realistic for Ashland

United States

#4 Sep 28, 2017
Nice post Optimistic. I am sure you are in Build Ashland, the city's propaganda arm. I was recently on 29th St, and it didn't give me hope that the city is capable of doing this parking garage. I hope I am wrong. I have little confidence in our Econ dev, but am hopeful the new city manager can see through any shams. Paper says $2 million extra needed for pensions next year. But without junkies and only suits on Winchester, the non profits can close down and save the city their annual begging.

Since: Jul 17

Location hidden

#5 Sep 28, 2017
I am not a pessimist Mr. Optimist but my derision toward this project results from how poor of a deal was negotiated for the city, not that I don't understand the need for renovation of the hotel.

Yes, the new owners are very good businessmen. Our economic development team, not so much.
This deal stinks for Ashland taxpayers and will haunt us for many many years.

Both Huntington and Ironton recently accomplished attracting new hotels (one by renovation and one by new build). Neither city borrowed money against their citizens to achieve these projects. Both cities attracted top rated hotel chains which are spending millions of dollars in construction or renovation costs. If the Ashland project is viable as a commercial business then it does not need the city investment of actual dollars.

It is the deal that Pullem and associates negotiated (with approval of the Commission) that is bad for the city, not the idea of renovating the hotel. It is a stupid and cavalier handling of our money by city leadership.

Do you not understand the difference between a grant that doesn't need to be paid back and a bond which is secured by our general fund (and must be paid back no matter what happens for 20 years)? How about a tax break for the new owner instead of investment dollars. If they are going to generate the amount of tax dollars that has been stated, let the hotel keep them and thus the risk is removed from the city (since we aren't now receiving those tax dollars there is no possible loss to the city if this doesn't succeed).

This project seems a lot like the Ambassador battle. The city should not be in the business of choosing winners and losers in private business much less investing citizen dollars to fund 25% startup without any future repayment directly from the business.

The businessmen must still be laughing at what the city has agreed to invest in their private project. I sincerely believe the tax payers will not be laughing in a few years.

This whole thing reminds me of a woman that has been married many times but still goes to the bar each night mistakenly believing that the next partner she hooks up with will be her Prince Charming. Both she and the city need to reevaluate and change their strategy since both have been burned repeated in the past and end up only getting screwed.
Optimistic For Ashland

Philadelphia, PA

#6 Sep 28, 2017
Actually, I'm a business owner in. Ashland. Have employees and pay a good deal of tax and fees to this city and state. Also a lifelong resident. I know the city has problems. But my family and I are INVESTED in this city. I want my children and grandchildren to have a future here. Ashland does have its share of problems. That started when Ashland Inc. moved and took $750 million in payroll out of the area. At one time Armco had over 5,000 people employed as well. We've had huge financial hits as a community. Either we take a gamble and bet on growth, or just allow the current decay to erode what's left. With all of this conversation, I haven't heard any ideas on how to attract employers to this city. Quality people want to locate in progressive areas. Which is also a big problem here. We need to drag ourselves into this century, and adapt so we can survive. Our city has to entice and facilitate new ventures to locate here. Once that's happened, maybe the drug plague will subside.

Since: Jul 17

Location hidden

#7 Sep 28, 2017
I wish your business well Mr. Optimist but it seems you are more pessimistic than I am concerning Ashland.

I do believe in Ashland and it is why I believe we can rebuild and attract business without such lopsided and risky deals. I believe that the hotel businessmen (or other viable developer) would have developed the hotel without our development team directly giving them money if the city hadn't initiated negotiations by coming to them with our hat in our hand.

How much citizen money has Ashland given you directly for your business development? Or did you do a business plan, borrow money, evolve with change, and build a viable business for you and your family? Or were you a CDBG recipient?

Our biggest disagreement is that you seem to trust the unproven neophyte development team that has brought us this bad deal which is built on repeated bad deals in the past. They have failed and now try to use that failure to sledgehammer citizens into believing this Hail Mary deal is all we can accomplish in our city. They paint us as undesirable and create a bleak picture in order to make themselves seem more clever and business worthy while using our money to negotiate this turd of a deal.

I believe it is time for Ashland to up our standards, not lessen them due to past defeat.

In my opinion, Ashland is not yet on the bargain rack where we have to pay businessmen citizen money to build businesses here. A little Ashland pride would go a long way in negotiating a better deal (along with someone with much needed experience).

Show of hands readers, how many of you want to invest money in the hotel that you might vary well have to cough up personally at a later date if the increased tax revenues projected don't come to fruition? Do you want to risk taking more and more money from your own family budget to continue to fund a hotel and parking garage for 20 years if this fails or doesn't prosper as well as they anticipate? You get all the expenditure risk but none of the reward. Your property value isn't going to raise proportionate to this hotel investment, your taxes won't be cut if downtown booms since we have so many other unfunded debts such as pensions to spend any new money toward.

Speak up, it is your money citizens! They are more than willing to risk your money, how do you feel about it?
Vegas Gambler

Ashland, KY

#8 Sep 28, 2017
Yea, we are like Pikeville. Maybe Pullem can spend the money in his inflated economic development budget to pay a medical school to locate here.

His entire idea of economic development is to pay people to open a business in Ashland whether through CDBG, city budget, or borrowing via bond.

These will fail once they spend the money because it is a terrible business plan. Focus should be on creating an environment to help existing business prosper and grow while also attracting new business. We would be better served by taking out bonds to finance infrastructure like water lines.

The above statement "government shouldn't risk taxpayer money by investing in private business" and also "government shouldn't pick winners and losers in private business" are so true.

Our economic development strategy can't be to let an inexperienced and incompetent economic development director throw our money away on a flawed philosophy of using tax money to bribe businesses to locate in Ashland.

Since: Jul 17

Location hidden

#10 Oct 3, 2017
A friend of mine pointed out that the $18.6 million is only the money we borrow for the hotel renovation, parking garage, and convention center.

He amortized the bond note over the 20 years and determined the payback will be about $28 million at today's interest rate (which will readjust periodically, usually upwards).

The citizens will pay the lenders about 9.3 million dollars. Do you guys understand why the bond attorney pushes this type of debt yet? Everyone makes money but the citizens and they simply get stuck with all the risk. Remember, we will pay the $28 million back regardless of the success of the hotel, TIF district or anything else.

Anyone wish we had someone that could negotiate a better deal yet?
Good for the Gander

Huntington, WV

#11 Nov 9, 2017
I see the commission voted to take the old Ashland OIl building off the hands of the bank.

Gilmore envisions a parking garage conference center which will attract medium to small conferences to the area and create a grand new downtown for shopping and doing business.

We all wish that would happen but it seems the odds are more toward spending a LOT of taxpayer money buying, demolishing, and building a garage/conference center then having it sit empty like so many other grand idea projects we have had in the past. Unfortunately, the debt to the taxpayer will remain even if Mr. Gilmore's vision proves erroneous.

I would feel a lot better if the Commissioner's put some of their own money into these risky projects instead of ours. It is easy to gamble other people's money and then walk away from the table if it doesn't work out.
JDB

Bladensburg, MD

#12 Nov 14, 2017
Good for the Gander wrote:
I see the commission voted to take the old Ashland OIl building off the hands of the bank.

Gilmore envisions a parking garage conference center which will attract medium to small conferences to the area and create a grand new downtown for shopping and doing business.

We all wish that would happen but it seems the odds are more toward spending a LOT of taxpayer money buying, demolishing, and building a garage/conference center then having it sit empty like so many other grand idea projects we have had in the past. Unfortunately, the debt to the taxpayer will remain even if Mr. Gilmore's vision proves erroneous.

I would feel a lot better if the Commissioner's put some of their own money into these risky projects instead of ours. It is easy to gamble other people's money and then walk away from the table if it doesn't work out.
I like 🐢 s.
make it n u take it

Huntington, WV

#13 Nov 21, 2017
Pullem must have gotten the hotel development strategy from Gov. Bevins.

The taxpayers of Kentucky own over 20% of Braidy Industries too and they won't even tell us where the money is going or who is invested in the project. Bouchard reminds me of the old story by Stephen King called Needful Things.

You are right Overseer, taxpayer money shouldn't be gambled on investing in private investment. Watch both of these projects closely.
get it right

Ashland, KY

#14 Nov 21, 2017
Taxpayers own 1% of Braidy. And, it is Governor Bevin. Geez.
Creative finance

Ashland, KY

#16 Nov 21, 2017
The 1% quote was disputed and attributed to Bouchard's fuzzy optimistic math from an op-ed piece.

Quoted from October 9, 2017 U.S.A. Today: " Following media requests for public records about the deal, the state released documents that identified only two investors and said both owned at least 20 percent of the company. Braidy Industries and the State of Kentucky"

The State of KY says it owns at least 20% of Braidy at this point.
Creative finance

Ashland, KY

#17 Nov 21, 2017
Interesting article that explains why many feel you shouldn't invest taxpayer money in private projects.

A lot of strange unanswered questions about Brady and the hotel.

http://www.wdrb.com/story/35783150/taxpayer-i...

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