A loan for PEAK
September 8, 2009 · 2:44 PM
A fine and storied institution, the Boys & Girls Club does so many good things for so many people. So questions about PEAK, the club’s teen center under construction on school district property, are often viewed as an affront to its aim of helping children. But ask, we must. After months of assurances that the club would be able to pay for PEAK with the donations pledged by Island residents and deposited in the bank, it turns out that a good deal of money is yet to be collected — $6 or $8 million? This new twist in the PEAK story requires some answers. How did this happen? A deal had been made, neighbors mollified and a lease with the school district had been signed. Doubts about the money were quelled as the club broke ground and site work began. Now, barely two months into construction, we find that what had been feared may be true and what any student in Finance 101 knows — future sums, particularly funds promised but unsecured, should be heavily discounted when computing their present value.
Now club officials are in negotiations for a loan to cover costs until the rest of the money is collected. Not a problem, the club says; this is the way the world works. Indeed, this is the way they have done it before when building other club facilities in Seattle and Federal Way, and it worked. But things have changed mightily. It is a new world — we are deep within a major economic recession. These types of remarks in particular are not reassuring when the public school district land is involved and the new facility sits in a residential neighborhood. More importantly, the deal with the bank introduces a third party into an already complex mix — one that could have control over the project if the club defaults on the loan. Good grief.
Let’s hope that everyone will make good on promises and pledges they made — and make PEAK a reality.