PhillyDeals: Morgan tries to polish tarnished rep with Philly loan

JPMorgan Chase & Co. is the most solvent of the five biggest U.S. banks, and one of the first to pay back the billions the Bush administration made banks borrow when they were extra shaky last year.

That's one reason Morgan, not Bank of America Corp., Citigroup Inc., Wells Fargo & Co., or PNC Financial Services Group, came forward to offer temporary 3 percent loans to cash-strapped Philadelphia yesterday, as it did earlier for California and New Jersey.

"We are trying to build up our municipal franchise," Jeff Bosland, JPMorgan municipal finance executive, told Deal Journal recently. "People tend to remember you when you were there for them in tough times."

But JPMorgan doesn't just want states and towns to remember.

It also wouldn't mind if they forget, for example, the complex interest-rate swaps and other investment schemes its agents sold to upstate Pennsylvania school districts and other unwary investors in the early 2000s, which lost millions as credit markets moved the wrong way.

The Obama administration split a half-billion "recovery" dollars among nine U.S. windmill operators and a couple of solar-power projects yesterday, and said it has lots more where that came from.

"We're moving the money out the door," Matt Rogers of the Energy Department told a group of us reporters in a conference call.

"There is no cap to this program. As long as they're making applications, we'll be making awards" for the next two years, said Dan Tangherlini of the Treasury Department. The government hasn't turned any applicant down so far, though some were asked to fill out more paperwork.

I asked if there were limits on what windmill operators and solar farmers could do with the money. No, Tangherlini said. As long as the project qualifies as renewable energy, windmill owners can use tax dollars to pay back lenders, pay themselves a bonus, or even build more windmills, if they want.

The government says this is necessary to stiffen the usual tax credits that windmills enjoy, which aren't worth so much these days, since business is slow and tax payments are falling.

Pennsylvania projects owned by out-of-state investors are getting more than $100 million of the initial $500 million.

Locust Ridge II, of Shenandoah, Schuylkill County, won $59 million. The project, which costs about $200 million, includes 51 400-foot turbine towers topped by generators with 140-foot blades that are supposed to generate a total of 102 megawatts of electricity, enough to power 2,500 homes for a year.

It is owned by Spain-based Iberdrola Renewables Inc., which has an office in Radnor. Spokesman Paul Copleman told me Iberdrola will use the money to help finish other windmills in Arizona, Illinois, North Dakota, Oregon, and Texas.

Highland Wind Farm, in Salix, Cambria County, collected an additional $42.2 million from the United States. Mike Speerschneider, development director for the plant's owner, EverPower Wind Holdings Inc., of New York, says the company will use government money to pay back its lender, Key Bank, of Cleveland.

While Mayor Nutter is begging and borrowing dollars to keep police officers and sanitation workers rolling until he can get state permission to raise taxes so they can collect future pensions, the federal government keeps raining money into Philadelphia - with strings attached, so it can't pay Nutter's bills.

The Department of Housing and Urban Development announced nearly $80 million for programs that are supposed to keep poor people from living in the street.

That breaks down to $52.4 million for Community Development Block Grants for "rehabilitation of affordable housing and the improvement of public facilities," $16.5 million in housing-construction subsidies and rent subsidies, $8.7 million to house people with AIDS, and $2.3 million for emergency shelter.

After I called them "zombie stocks" in yesterday's column, Freddie Mac dropped 17 percent, Fannie Mae fell 18 percent, and AIG dropped 22 percent.