County offers to make $727,700 loan to JDA
In a surprise move Tuesday night following a 15-minute closed door meeting, the Grady County Board of Commissioners voted unanimously to offer to loan the Grady County Joint Development Authority $727,700. The loan proceeds would pay off half of the debt on the former Higdon Furniture Company facility located on Wight Road.
Without any public discussion or debate the commission offered to make the loan contingent on the City of Cairo making a similar loan at an interest rate and terms to be negotiated by the parties involved.
Commissioners had retreated behind closed doors, according to the agenda, to discuss a personnel matter and future acquisition of real estate.
After reopening the meeting to the public the board first voted unanimously to use approximately $621,563 of the county’s $6,058,305.50 in cash reserves to pay off a loan the county commission had obtained to pay 40 percent of the purchase price of land bought from Hall Farms Inc. to expand Milestone Industrial Park.
Then Commissioner Elwyn Childs immediately made a motion to offer to loan the JDA $727,700 from the county’s cash reserves to pay off the debt on the Higdon facility, which was financed by the five local banks.
Commissioner Charles Norton voted along with the other four commissioners to make it unanimous, but he commented, “I voted yes, but I sure didn’t want to.”
County officials were questioned by The Cairo Messenger as to how the deal came about and how it could have been discussed behind closed doors.
County Administrator Rusty Moye first said the board had gone into executive session to discuss pending litigation, but when reminded what the agenda stated, he said he had pitched the idea of the county paying half of the purchase price for the Higdon facility, but according to the administrator, “they balked” on purchasing it, but agreed to a loan.
A memo from Moye to the commissioners dated January 13 outlines the county’s cash reserves and a list of “near future commitments,” including $727,700 for the “Higdon Bldg. 1/2 Purchase Price.”
Chairman Al Ball told The Messenger that both the city and county are currently providing $3,700 each on a monthly basis to assist the JDA with the debt service on the Higdon facility, but that only covers the interest on the note and no principal.
“We believe if we clear up the indebtedness on the Higdon facility it puts the JDA in a better position to market the building,” Chairman Ball said.
Ball said that JDA officials had expressed that opinion to the county commission, but no such discussions have taken place in public meetings.
“The city is looking at a loan, but there is no commitment from the city at this time. The motion passed was contingent on the city’s approval. We see it as a win, win for the potential jobs and better marketing of the building,” Chairman Ball said.
The commission chairman also noted that even when the county pays off its share of the debt on the Milestone Industrial Park and if the loan is made to the JDA to purchase the Higdon facility the county will still have in excess of three months operating expenses in cash reserves.
According to Chairman Ball, it will now be up to the Cairo City Council to address a possible loan to the authority and to negotiate the terms of the loan with county officials.
Officials say the county will save on interest expense by paying off the debt on the Milestone expansion. The Cairo City Council discussed paying off the city’s share of the debt in a public meeting last week and voted unanimously to pay off the note.
The city council has not discussed publicly any plan to loan the JDA money to pay off the five local banks for the Higdon facility or any possible joint-purchase of the building.
JDA Executive Director Brian Marlowe could not be reached for comment Tuesday night.