Thursday, June 11, 2009

Iron City w/o the City

(news) Somebody has to ask. Did they ever pay their water bill? Over the years the unpaid water bills have added up to $millions drained away from PWSA revenues. Literally. Though some of it took the long route to the sewer.

Seriously. Did any of the forgiveness on the unpaid water bills include any clawback provision if, as will be the case, they move away?

and what do do with a former brewery? A really big brew-pub?

update: Just looking at the news trail on this to answer my own question. Just last fall there is this PG news story about how the PWSA wouldn't exercise their rights on the property even though the company had not lived up to its end of a deal involving the debt foregiveness:

The brewing firm's plan obliges it to undertake $4 million in capital improvements as condition for the write-down of its $1.5 million debt to the authority. A mortgage gives the authority the power to seize property if it feels the brewer isn't making improvements by certain dates.

Authority Executive Director Michael Kenney said that not all of the contemplated improvements to the boilers and kegging line are done, but modernizations have occurred, so the authority won't trigger a default.

But the kicker line is:

"They got the end result in a different manner," he said.

They got to the end result they wanted. But the city didn't! I now understand the bond deal better. I love the vague term 'modernizations'. Obviously not any modernization worth enough to not abandon. I wonder if that term applies to any capital purchases that will be resold?


Anonymous MH said...

"Though some of it took the long route to the sewer."

Via the storm drains in a South Side alley.

Thursday, June 11, 2009 12:58:00 PM  
Blogger smallstreams said...

How about turning into a church, "The Brew Works Church."

Thursday, June 11, 2009 9:54:00 PM  
Blogger Infinonymous said...

Ravenstahl and Zober let them off the hook for most of it already -- overruling plenty of other people in the process -- and if I am hearing correctly they are in the process of letting them off the hook for the rest of it. Zober, as usual, is at the helm and the boy mayor (this time literally as well as figuratively) is phoning it in.

$4 million in taxpayer and ratepayer funds to destroy the brewery (by propping up bad management) and send the jobs elsewhere. Who benefits? A series of crooks . . . and whomever they favored with contributions or a slice of the real estate deal.

Nice jobs (pun intended), Luke and Yarone.

This is enough for me. The rest of the region would be justified in cutting anchor from these losers. After watching this $4 million go to counterproductive waste, I wouldn't support a dollar -- not a dime, not a nickel -- of additional taxes from non-city residents.

Thursday, June 11, 2009 10:53:00 PM  
Blogger C. Briem said...

Isn't that kind of backwards in this one weird case. It's an odd case in that it's the suburbs that are getting the jobs that were saved by city expenditures. PWSA being the big loser when it comes to sheer $. I bet it will be water rates on city residents that bear the brunt of the lost $$$. It's a different situation than the city itself. Not sure any non-city resident taxes were part of the mix.

Of course the PWSA has a few other problems these days. I was just thinking... if Walko gets his judgeship later on in the year. Who will be the next PWSA chairperson? Even money on Dan Deasy.

Thursday, June 11, 2009 11:20:00 PM  
Blogger Infinonymous said...

(1) Why assume the jobs are going to Latrobe? Because the management at Iron City said so? Please tell me you have another reason to assert that.

(2) No jobs were "saved" by the handouts. Not one. The production volume has been declining steadily (90% decline), and likely will continue to decline. The production could have been moved offsite just as easily at any point while cash was being poured down the drain. Or (pretending for a moment that the City of Pittsburgh were being operated by grown-ups), the city could have stopped propping up bad management (two felons, and two other owners who were worse owners) with taxpayer money and maybe even let a real management team save the brewery.

Hell, it would have been better to give the money to Church Brew Works and Penn Pilsner. They pay their taxes, pay their water bills and know how to run a successful brewery. Iron City's owners have pissed off the locals -- drinkers, distributors, unions, sports teams -- for years. And they have paid the price. Except, of course, when taxpayers were paying $4 million of it for them.

(3) State money was thrown on the pile, several times.

(4) Is anyone going to ask Zober why he picked these owners, and threw more money at them, in the first place, and what he thinks about it now?

I didn't think so.

(5) Not another penny. Not a cent. It's like handing cash to a 14-year-old junkie, or dropping it into a woodchipper.

Friday, June 12, 2009 12:18:00 AM  
Blogger C. Briem said...

On the jobs.. just does not seem there is reason to question as yet the jobs in Latrobe move from the news accounts. If you are saying the whole Latrobe story is fiction then ??? Or are you just saying it probably isn't going to have as many jobs there as there were here with this canning line moving as well?

but I am clearly on public record as being against all sorts of local government subsidies/tax incentives etc so I am not disagreeing with the sentiment. It's just not the best case to argue some of that. Lot's (too many) local governments chase their tails trying to support local firms even when it makes little sense to do so. PWSA clearly didn't do itself any favors in acceding to the deal on their unpaid bills. But was there actual public expenditures going to the firm on top of that as you imply? I really had not heard that, but I may not have been paying attention and would be curious on the details.

I actually was going to joke in this post that at least nobody had built them a new plant on the public dime before they decided to move out. The recent ownership history of Pgh Brewing is clearly troubled, but that isn't a recent story is it? What was the one guy's name that caused a lot of this: Carlow? But I have to admit I never looked much at most recent owners. Looks like a small scale private hedge fund operation. This is like their Chrysler deal I suppose.

Maybe there is more to look at. According to this PG report just from the fall the firm was required make an investment in the plant as part of the deal. Did that happen and what recourse is there if it didn't. It also said the PWSA owns at least part of the mortage on the site. So my thought is that going forward, the question comes to how aggressive the PWSA is at recouping it's losses here. Safe bet is that the PWSA did not negotiate well to retain it's rights, but you never know. But the whole world of distressed debt and restructuring is like never never land somedays.

Friday, June 12, 2009 7:22:00 AM  
Anonymous MH said...

Post Gazette is now reporting that PWSA wants $600k more.

Friday, June 12, 2009 11:39:00 AM  
Blogger C. Briem said...

Compare to yesterday's story.

Friday, June 12, 2009 11:44:00 AM  
Anonymous MH said...

My guess is that it wasn't in the articles yesterday because the PWSA didn't think about it until the news broke.

Friday, June 12, 2009 12:07:00 PM  
Blogger Infinonymous said...


Friday, June 12, 2009 6:11:00 PM  
Blogger Matt H said...

They should have to pay up.

Friday, June 19, 2009 7:12:00 PM  

Post a Comment

Links to this post:

Create a Link

<< Home