Inner-city work still waiting for loan from city

A promise to transfer $1 million into the city's program to rebuild the blighted Laney-Walker and Bethlehem neighborhoods has yet to be kept, and in the waiting more than a dozen land sale deals considered vital to the project have fallen through.


When the Augusta Commission ended seven months of gridlock and approved funding for construction of a downtown trade, event and exhibit center in early December, a stipulation called for a short-term loan from the general fund -- paid back with bond proceeds -- to keep the related inner-city revitalization initiative going.

But a month and a half later, the money still hasn't been moved over, and the plan remains stymied. The city's Housing and Community Development Department has been unable to close on any of the 100 or so properties it had under contract, and Director Chester Wheeler said about 20 deals have fallen through.

"Suffice it to say, it has slowed some activities," Wheeler said. "Not all of them, but some of them."

After the commission's 7-1-1 vote to approve the TEE center Dec. 7, City Administrator Fred Russell said he expected the funds transfer to happen sometime the next week. Since then, he said Friday, it's been held up because bond attorneys say the same detailed spending plans that have to be drawn up for the $8 million Laney-Walker/Bethlehem bond issuance apply to the general fund loan.

Without the guidelines in place, he said, bond money can't be used to replenish the general fund.

"We can't spend the money until I know I can get it back," Russell said. "I'm not going to put the money in jeopardy until I know I can reimburse myself."

Drawing up the spending plan has involved a complex series of back-and-forths between layers of bond attorneys, debt management financial adviser Diane McNabb and consultant Jesse Wiles, whom the city hired to manage the Laney-Walker and Bethlehem Neighborhood Action Plan. Bond attorneys, recommended by former General Counsel Chiquita Johnson and approved by the commission, include the Atlanta-based Kilpatrick Stockton law firm.

As for his statement in December, "evidently my definition of 'immediately' differs from our bond counsel's definition of 'immediately,' " Russell said. Asked when the money might come through, he said he hopes to have an answer within the next few weeks.

Former Commissioner Betty Beard, one of the conceivers and chief proponents of the revitalization plan, said it was her understanding that the money would be made available immediately. She said she doesn't understand how the commission could transfer $10 million to the Georgia Board of Regents so it could buy Gilbert Manor for the Medical College of Georgia -- debt being replenished through a $30.55 million sales tax bond -- yet can't make the $1 million transfer for the inner city.

"It's not making sense to me," she said. "I think something is wrong with this, and they're not following through like they should."

Though the election of Beard's replacement, Commissioner Matt Aitken, ultimately ended the 5-5 gridlock on the TEE center, the $1 million advance was an important bargaining chip during the final months of haggling.

Work on the Laney-Walker/Bethlehem initiative started in late 2008, using proceeds of a $1-a-night bed fee implemented a year earlier to fund both TEE center operations and inner-city projects. That money began drying up last year, and Wheeler warned commissioners that work would soon screech to a halt.

In October, Wiles, the president of Jacksonville, Fla.-based Asset Property Disposition Inc., told the commission's TEE center subcommittee that he needed $1.6 million to complete sales on 103 parcels and that the sellers were starting to lose interest.

He said after the December vote that most of the $1 million would go toward land acquisition, and that gaining control of property is the first step in the revitalization process and the key to spurring interest among homebuilders. Wiles said he planned to buy parcels along Wrightsboro Road; James Brown Boulevard; and Holley, Florence and Twiggs streets.

Mayor Pro Tem Alvin Mason, the lone vote against the TEE center deal, said he was unaware that the money never got moved. He said he planned to call Russell and find out what happened.

"That's disturbing to me," Mason said.

On Friday, Wiles said that though he has lost contracts while waiting for the money, he's gained about a half dozen more. The ones that fell through can always be renegotiated, he said. Most sellers have followed the story in the newspaper and know the funds will come through eventually, he said.

"I've done this in other markets where folks aren't this patient," he said.

Still, Wiles acknowledged the threat that speculators could move in, acquire land where contracts fell through and demand higher prices, costing the city more money. He said his policy is for sale prices to be based on appraisals and review appraisals, but if someone refuses to let go of some vital parcel, he could be forced to relent.

"If there's a concern, that's probably it," Wiles said.

Reach Johnny Edwards at (706) 823-3225 or