The company was kind enough to send the city a note saying "Secured creditors will take control of all assets, which have a value less than the secured debts, so there will be no funds to pay unsecured creditors." I think (though I'll be happy to be proved wrong) that's code for "Don't expect to get paid for that electric bill."
At least we can't take the blame for this one. Even I thought this enterprise looked like a winner. Dakota Vinyl was making plastic lumber, that fake stuff that's supposed to make longer-lasting decks and fences and such. (I'm still a wood guy, but I could be persuaded to convert, especially given some talk that plastic lumber may have a smaller environmental impact than chopping down trees.) The industry is growing, so it looked like a good opportunity for Madison.
Alas, it looks like the company couldn't deliver on its financial promises:
On Aug. 18, John Calvin, Dakota Vinyl's chief executive officer and company investor, won by default in the Third Circuit Court a judgment of about $305,000 from Dakota Vinyl for the nonpayment of a loan and interest. In the court documents, Calvin asserted that Dakota Vinyl had failed to make an interest payment that was due on June 30 and had defaulted on the conditions for a $280,000 loan. Calvin's court judgment also included about $25,000 in interest from the loan [Chuck Clement, "Dakota Vinyl Closes Doors," Madison Daily Leader, 2008.09.11].
Oh well. This just means we have one more nice industrial facility available, plus a nice new paved street, for the next eager entrepreneur. Let's do some thinking, figure out what comes next!
at least they will have a nice road to drive on when they are taking their machines out of there.
ReplyDeleteThis is the second time the Tonak family came to Madison with big ideas and left people high and dry. They used to own the Grandview Supper Club until they went under. Somebody didn't do their homework on their financial history and documents. Didn't anyone call Clark, SD to ask about these folks before everyone tossed money at them?
ReplyDeleteMaybe we need to focus on expanding existing firms or attracting established businesses rather than getting hyped up on dreams and speculation like J4 Manufacturing (remember the lawn mower mosquito sprayer and drop seat wheelchair) and Dakota Vinyl.
This isn't economic development, it is financial disaster that hurts our community and families with each failure. Stick with the winners and help them grow in Madison.
Yes, Jon Hunter avoids strong statements but just said it's time to focus on employment growth. I'm troubled by LAICs loose accountability to tax payers in efforts toward job growth and other community functions (like main street development). As someone said: "No jobs, no job." While appreciating anon's view I'm torn by private companies receiving tax goodies. We should support our winners, especially those treating their employees well, but we can't allow protectionism. I've heard stories of LAIC not supporting a new business that would compete with existing businesses for labor so they go elsewhere. We need insight why Madison has been stagnant while communities around us have prospered. Does anyone know?
ReplyDeleteHere's an example of why our economic development efforts are not creating jobs. Randy Schaefer decides to develop his land-locked land behind the VFW Club, a private, for-profit development. LAIC purchases a home from the Schoeberl family for Randy so he can get access to his property. That house is torn down to make way for a road coming in from Garfield Avenue. LAIC director, Dwaine Chapel announces they will purchase Randy Schaefer's first home. Total # of jobs created...Zero! Number of backs being rubbed-Several! Has LAIC been paid back for the house they bought for Schaefer and why on earth would LAIC purchase a new home in a residential neighborhood using Forward Madison donated dollars. I thought their job was economic development, meaning jobs for people, whether industrial or retail. Let's do something for our entire community instead of a select few good old boys. The LAIC Board needs to ask some serious questions about its director and following the money trail.
ReplyDeleteYes Johnsd, those are not stories of businesses being turned away. There have been several in the last year. The problem is the LAIC, a "non profit" (all though I'm not sure it acts like one) controls far to much in this town. And the LAIC is run by one man. The board simply ok's whatever Dwaine Chapel wants. Dwaine is not a bad man, he simply has to much power over this community.
ReplyDeleteHow is it that one person, who was never elected by the people of this community, has total control over who gets our tax money for economic development?
The City Commission needs to take a close look at just where our money is going, and maybe more importantly, where it is not.
Local issues have such a direct impact on our standard of living, yet people seem to avoid the conflict. Cory would say they can't steal your birthday, but maybe it would impact your business or professional life significantly? How much is the city commission really in charge? Someone told me the key players at the LAIC direct Chapel for their interests and the commission keeps in step. Rosebud and John Deere did get assistance and Gehl with training costs. The LAIC now has USDA loan money to administer. With disclosure and guidelines? I don't see transparency overall and have lost considerable faith (almost all) in our city leaders. Decent jobs can vastly improve a person's life and the entire community. Some people are leaving Madison, although I don't know how many for sure.
ReplyDeleteJust a thought, JohnSD: suppose you're a house painter, and you want to speak up, but you're worried you might lose business from whomever you would upset with your exercise of civic obligations. What would happen if you got together with all the other local house painters, and you all spoke up together?
ReplyDelete