Resurrection Center Loan Deal with Woodstock

The flurry of publicity over the Northwest Herald's lawsuit against Crystal Lake blogger Cal Skinner got me thinking about a deal that the City of Woodstock made with Resurrection Center.

The lawsuit has brought to light (again?) a deal in 1985 in which, according to the Daily Herald today, "Deputy County Administrator John Labaj said the (Northwest Herald) newspaper was allowed to take advantage of the county's status to obtain financing at about 80 percent of what was the prime interest rate at the time."

"'They were allowed to use the county's tax-exempt status to get money at a favorable interest rate,' Labaj added."

The City of Woodstock approved a deal with Resurrection Center, a retreat located on Country Club Road outside the City Limits of Woodstock, 18 months ago in which, as I recall, the City would lend its good name (credit-worthiness, but not "credit") to Resurrection Center because of the beneficial effect the Center had on business in Woodstock. The City reportedly was not to be at financial risk in the deal.

Now that one is kind of hard to figure out, but the City felt secure that it had no financial risk.

What happens to that deal, if Resurrection Center winds up its business as a retreat and becomes a senior residential facility? The McHenry County Board approved that change on May 19, over the denial of its Zoning Board of Appeals.

It would be interesting to know when Resurrection Center first began considering the possibility that it could not financially continue as a retreat. Did it have even a sneaking suspicion of this, when it went to the City of Woodstock?

Did anyone on the City Council or on the City Staff consider the possibility and raise the question, "What happens if they change their minds about continuing as a retreat?"

It was on about December 4, 2007, that the Woodstock City Council approved a deal to help Resurrection Center refinance $5,000,000 in loans at a lower interest rate. The City Attorney assured the City that it would have no liability, if Resurrection Center did not pay off its loan.

Did Resurrection Center pay the City of Woodstock the promised $12,500 to reimburse administrative costs for issuing the bonds?

You can read the Northwest Herald article about the Woodstock City Council's deal with Resurrection Center at www.nwherald.com/articles/2007/12/11/news/local/doc47563a60f28db043094581.txt

Maybe in the future somebody play the role of the Devil's Advocate (and not be blamed for being negative) and take a hard look at the downside of a deal.