Monday, April 12, 2021

Q. What Could Go Wrong with Guaranteed Bonds? A. $50M in Bonds for PAMCORP at PDX.

14 years ago this month the Oregon Treasurer paid off the remaining $42.2 million from a $50 million bond issue that had been guaranteed by the Oregon Public Employee Retirement System (PERS) for construction of airplane maintenance hangers at the Portland Metro Airport. 

When the project was underway there was little hint of what was to come. HERE is an April 1993 Oregon Business magazine (cover) story extolling the virtues of the project: 

Ideally situated between two hubs of the aerospace industry -- Seattle's Boeing and Long Beach's McDonnell Douglas -- the facility further enhances Portland as a strategic center for trade and commerce on the Pacific Rim. The project is expected to employ 1,300 workers by 1998.

The Treasurer's 2007 pay off action was driven to avoid the remainder of $98 million in additional liabilities (including interest) from 2004- 2022 that are detailed in the 2003 PERS annual financial report

The PAMCO fiasco included poor documentation of construction costs, resulting in a reported $12.1 million profit on a $36.8 million construction cost.

A Court of Appeals decision HERE has lots of dense detail about the project and the subsequent legal wrangling about who did what. 

Willamette Week has a easier to digest 2007 story HERE with more background on the PAMCORP fiasco. This story came out just a couple of months before the Treasurer action to pay off the remain debt and avoid even higher payments through 2022

Originally created and posted on the Oregon Housing Blog.  

No comments:

Post a Comment