Oconee County officials are still waiting on Presbyterian Homes to indicate how much money it wants the county to borrow through bond sales to help finance construction of its Presbyterian Village Athens on U.S. 441 at Hog Mountain Road.
In the last two weeks the company began land clearance and construction of a chain-link fence along U.S. 441 for its complex. The county had issued a Land Disturbance Permit for the 79-acre property nearly a year ago.
The chain link fence is covered with signage promoting the Continuing Care Retirement Community, but county code enforcement officials say those signs will have to be removed because they are in violation of county code.
Rick Waller said at the meeting of the county’s Industrial Development Authority on Monday that the county has not received the documents from Presbyterian Homes that are needed for the Authority to move forward on the bond sales. Waller is chair of the Authority.
The Authority in May passed a resolution “preliminarily approving” the issuance of revenue bonds for Presbyterian Homes pending receipt of further documents specifying, among other things, the amount to be borrowed.
The resolution states that the Authority will need to pass “a Bond resolution approving such documents” before the agreement is final.
Citizen Concern
Waller’s update on Presbyterian Homes was in response to a question from Tom Remar, 1521 Crystal Hills Drive, made during the citizen comment section of Monday’s Industrial Development Authority meeting.
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| New Fence And Advertisements On U.S. 441 |
Remar said that he and others, particularly in the Crystal Hills subdivision behind the Presbyterian Village, are “real concerned” about the county’s role in the financing.
Remar said that the fear is that the citizens of the county “are going to be stuck” with paying off the money that the county borrows and then lends to Presbyterian Homes if that company runs into financial difficulty.
Waller responded that, “In this particular case, we’re simply acting as a pass through entity.”
“We’re not liable for anything,” Waller said. “Presbyterian Homes is liable through their assets for the value of the bond.
“Now if they went into default in some ways, in other words, all of Presbyterian Homes, we may have an issue,” Waller said. “But otherwise we’re not liable for the bond.”
Wanted Documents
Remar pushed Waller for documents regarding the bond sales.
“They have not come back to us with what is called a Bond Resolution,” Waller said. “We don’t know if they are going to want to finance the entire amount that they originally asked for, or some lesser amount, which is most likely the case.”
“There’s got to be something,” Remar said, noting that the Authority had approved a resolution back in May in response to the request by Presbyterian Homes.
Waller asked County Clerk Kathy Hayes to make that resolution available to Remar.
Eight-Page Document
The resolution, which County Clerk Hayes made available to me on Tuesday, is part of an eight-page document signed by Waller and Alex Patterson, vice president of Westminster Presbyterian Homes Inc. of Quitman, in the south of the state.
The document states that the county is willing to issue 2018 revenue bonds in an amount up to $150 million “to finance, in whole or in part” the Presbyterian Homes project in Oconee County.
The county will lend the proceeds of the sales of the bonds to Presbyterian Homes and enter into a Borrower Agreement determining how Presbyterian Homes will pay the county for the loan.
The document states that the county has a right to hold a public hearing on the bond sales before they are issued and, if the county does not deliver the bonds in two years, the agreement is cancelled.
Oconee County Board of Commissioners Chair John Daniell, a member of the IDA, told Remar that “The documents are being drafted at this time to be presented to the county.
“We’ve not approved,” he said. “All we did was say that we would be willing to entertain them coming back to us to proceed to make the negotiations start.”
“We’ve not received any communication back from Presbyterian Homes one way or the other” since May, Daniell said.
Amount Requested
Remar used the figure of $115 million as the amount requested by Presbyterian Homes when he raised his concerns, and Waller did not correct him, saying the Authority does not know the final figure.
I mistakenly used the $115 million figure in a post I did on June 10 on the May 14 meeting, and that could be where Remar got his estimate.
I was in the hospital at the time of the May 14 meeting and could not attend. Sarah Bell did attend and sent me the video and a note saying the request was for $150 million.
From the video it is clear that Jerry Peterson, bond counsel for Presbyterian Homes, used the figure of $150 million in the presentation on May 14, but, at one point, he seemed to say $115 million and also used the figure of $140 million.
Peterson also said the company has a loan commitment of $40 million from the United States Department of Agriculture.
The document released by Hayes makes it clear that the working maximum figure was $150 million and that is the figure I should have used in the original story.
During that May meeting, Jim Woodward, local bond attorney for the county, said “we have zero obligations as the Authority to make any payments whatsoever” on the bonds, and the same applies to the county.
Benefit To Authority
The resolution signed by Waller states that the Authority wants to assist the nonprofit Westminster Presbyterian Homes Inc. because it will “promote and expand for the public good and welfare industry and trade within Oconee County and reduce employment.”
At the July meeting of the Industrial Development Authority, Waller stated another justification for going forward with the project.
Waller said the Authority can charge a fee, set by the United States Internal Revenue Service, for administering the bond sales.
“I forget exactly what that is,” Waller said. “But because of the size of the bonds, it will be a fairly good income stream for, you know, the period of the bond. But since we don’t know the amount of the bond, the final amount of the bond, we don’t know exactly what that is.”
County Attorney Daniel Haygood told me in an email message today (Wednesday) that the Authority can charge one-eighth percent per year of the face amount of the bonds.
If the bonds are for $150 million, by Haygood’s calculations, this would amount to $187,500 per year.
Haygood said he has no way of knowing the number of years of the bonds “until we hear from PH and their finance folks, but I think we can assume five years until we hear differently.”
Fence And Signs
Last week I asked Guy Herring, director of Oconee County Planning and Code Enforcement, about the work underway at the Presbyterian Homes site. Herring told me on Monday that the Land Disturbance Permit had been issued.
The permit, which I have received, was issued Sept. 21, 2017, and is only for clearing and grubbing.
The permit states that “No grading or clearing for construction of streets, utilities, or storm drainage shall commence until after approval of the site development or subdivision construction plans by the Development Review Committee and the Planning Department.”
Oconee County’s Development Review Committee approved the preliminary site plan for the project in March of 2017 and was told that construction would get underway in the summer of 2017. The Review Committee has not acted on any plans from Presbyterian Homes since that time.
Herring told me in an email message this (Wednesday) morning that Presbyterian Homes “has been told the sign has to come down.”
Herring said Presbyterian Homes has received a “house moving permit” for the 4-acre tract it purchased on Hog Mountain Road. I have not yet received a copy of that permit.
Video
I did attend the meeting of the Industrial Development Authority held on Monday at the Watkinsville Office of the Oconee County Chamber of Commerce.
Remar began his comments at 9:18 in the video below of the entire meeting.
OCO: IDA 8 13 18 from Lee Becker on Vimeo.
10 comments:
Based on its name, Presbyterian Homes sounds as though it has some kind of religious affiliation. Is there some kind of relevant restriction on how our county government involves itself in this religiously affiliated organization?
If PH is a tax-free organization because of its religious affiliation, then the county will not receive property tax from this enterprise, correct? If so, mightn't our county's financial efforts and finances be better invested in a taxable business?
Some of the illegal PH signs indicate that restaurants and other entertainment will be onsite. If this is the case, and these PH enterprises are under a tax-free status, won't our bond money be subsidizing, in part, businesses that will be competing with our county's tax-paying enterprises?
The PH signs have been up for some time since PH has been told to remove them. Shouldn't this poorly responsive compliance be considered as part of the county's assessment of PH's request for bond support?
According to this story, PH has a loan commitment from USDA for $40 million. First the obvious rhetorical question: Why is the USDA committing to loan to PH? This seems quite 'far afield' from USDA's mission. But also, I hope our county government will assure that any PH assets used to secure the USDA loan will not be 'double-dipped' as assets for the proposed bonds.
The first of probably many code violations to come. It didn't take them long. How this faux religious organization, who will never pay taxes, conned a county into first approving, then eventually financing their construction and in the process creating a permanent bottleneck at Hog Mountain, and eventually using a substantial yet to be built sewer capacity is beyond me. The county doesn't have unlimited bond issue. It's kind of like a credit line and OC is going to use a substantial amount for an organization with Junk Bond ratings for past construction bonds. God bless us.
What is your source for the junk bond status?
Signs were down yesterday.
Good questions on tax exempt and USDA for the federal delegation.
I believe county has done this for other organizations as well.
It is very sad to me to see such negative comments about an organization that has been doing amazing work caring for people across this state for over 70 years. While I do not worship at a Presbyterian church, I have great respect for the mission and purpose of this organization and I have seen first hand how well it cares for those who need it. To question its religious affiliation and its service to God through caring for those who often have no one else, shows a complete lack of knowledge regarding the long history that Presbyterian Homes has enjoyed. It is very disappointing for me to see members of our community attack this faith based organization that is bringing quality jobs, responsible development and needed housing and services to our community. I am a resident of Crystal Hills, the closest neighborhood, and could not be happier about the plans Presbyterian homes has for this property. I have absolutely no business connection to Presbyterian Homes, but I am an attorney that has handled zoning matters for 15 years and it is a great relief to me that this property is being used in such a positive way for our community. The location is prime real estate that was not going to sit undeveloped, so I wish people would give meaningful thought to how this development compares to some of the potential commercial developments that we could have seen in this location. As an additional note, I thought the fence was an attractive change in lieu of the typical orange silt fence and temporary construction fencing we often see around similar developments. All of this is to say, our county should be proud that we attracted Presbyterian Homes to our community and we should be grateful that our elected officials have handled this in a manner that protects our community while also attracting this development. I hope people will refrain from making further comments or suggestions about development authority bonding and other matters about which they really don't have knowledge. I personally look forward to having Presbyterian Homes as neighbors and am very thankful that they chose our county for what looks to be a beautiful development, much like the others that I have seen. I hope others will join in showing hospitality and welcoming this great organization to our wonderful county.
From the Oconee Enterprise Twitter-
Public Hearing September 6, 2018 2PM Oconee County Courthouse
Topic-Issuing 155 MILLION Dollar Reneue Bond
It should be interesting to hear explanation.
Presbyterian Homes is not affiliated with the Presbyterian Church. Perhaps county official should be sure they have the correct, accurate information from PH before they eagerly jump forward to approve this. This business could secure its own funding as most businesses do.
I too live in Crystal Hills. I do not support PHG. I certainly question the authenticity of their religious status, the counties financial commitment to this project, and the reason and amount of sewer capacity projected to be used by PHG which was NEVER answered by the commissioners or PHG during the rushed hearings for the PHG project. If ANY private investor presented this same development of this high a density and requested the same kind of financing deal and couldn't answer very simply questions posed, people would be up in arms. No one seems to care since it is a religious organization as if God himself was in charge of building it.
As to the bond rating question, many of their projects have been A- which is minimum investment grade which is just above Junk Bond status. Look it up yourself (Fitch, Moody, S&P). Don't fool yourself on this project being backed by the entire PHG entity. Each project is a separate legal entity. If one fails, it fails alone with no connection to the other entities. PHG failed to explain this and many other things with their dog and pony show.
Anyway you slice and dice this “proposal “ -the tax payers of Oconee County will pay.
Is Presbyterian Homes of Georgia part of the Presbyterian Church?
No, but for more than 60 years, we have been in a covenant agreement with the five Presbyteries in Georgia (PCUSA), which allows us to collect the Mother's Day Offering in Presbyterian churches. This offering helps support the more than $4 million in benevolent nursing care and other services that we render each year to our most vulnerable residents.
Taken right off their Home page.
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