Maybe it was brought up in the Columbia City Council meeting when Aurora Organic Dairy sent a horde of talking heads to address the council. There was some talk about putting some money in escrow. However, I was at the council meeting, and I did not understand what money was going to be set aside in an escrow account or where the money was coming from.
Now we know, thanks to reporting by Carolyn Heger of this newspaper.
While the city paid $3 million of our money for the 102-acre site northeast of downtown and sold it for a whopping million dollars less, that is only part of the story. As Heger discovered and reported, the city set aside in escrow $500,000 of the $2.1 million purchase price and established a schedule for Aurora to receive $100,000 per year for five years.
That means that Aurora will ultimately pay only $1.6 million. In short, we taxpayers are picking up the tab for $1.4 million. That's dang nice of us, and Mike Matthes — the city mis-manager — would likely agree.
The Columbia Daily Tribune reported that Aurora has obtained a $100 million loan from a bank in Canada, using the Columbia site as collateral. Usually bankers are tight with their money, but this makes no sense: a $100 million loan secured by a $2.1 million site. I am not a loan analyst, but a close reading of the loan document apparently reveals that Aurora, along with other companies, pledged many sites that all add up to the Montreal bank clearing Aurora and the other companies for up to $150 billion in aggregate. That ain't chicken feed and it certainly is not spilled milk.
This gets even weirder. Matthes said the city would make up for the lost money by Aurora paying utility bills. He conveniently overlooked the fact that the water and light department does not provide electricity and water at no cost to them. It costs money to generate electricity and to drill wells, to treat and to pipe water to Aurora's plant. If there were no costs involved, all of us Columbia residents should get our water and electricity for free. All that would be on our utility bills would be sewer, trash pickup and a minimal stormwater fee.
As Heger noted, I have received all of the documents she possesses. Among many other things, it appears as if there was not much negotiation with representatives of Aurora; rather it seems as if Matthes and Bernie Andrews, director of Regional Economic Development Inc. and a city employee, set out to entice Aurora to come here. No doubt a few concessions were made, but mostly Matthes and Andrews caved in, and spent most of their time — and our money — in selling this area to Aurora.
For what? A few jobs. A hundred or so initially, which would possibly ramp up in quite a few years to a bit less than 150. No doubt, those who secure the jobs will benefit. The rest of us pay the tab. That tab, by the way, is now up to a bit over $6 million when the escrow amount is added to the tax abatement amount.
Adding injury to a string of insults, an Aurora representative told the council the milk from 30,000 cows would be needed. Because Aurora's commitment to “vertical integration” means that the company owns the dairies that produce the milk for its plants, there will be several Aurora factory farms established in this state. Pushed a bit further, the spokesperson said the factory farms would be within 300 miles of the Columbia plant, but the closer the better because of transportation costs.
That, then, is what economic development is all about. Overlook all of Aurora's flaws, such as USDA action and a $7.5 million settlement, and focus on getting the company to locate here. When you're playing around with someone else's money, the sky's the limit. That is sort of like going to Las Vegas and using casino money to gamble with. That would only result in recklessness.
For what amounts to a few pieces of silver, Matthes and Andrews have sold out — with our money. With these two in charge, grab your wallet.