Inner-city work still waiting for loan from city

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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 johnny.edwards@augustachronicle.com.

Comments (11) Add comment
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johnston.cliff
2
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johnston.cliff 01/24/10 - 02:18 am
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With the tremendous amount of

With the tremendous amount of land available in the Laney-Walker and Bethlehem areas, I doubt there will be much speculation on "vital" land. The 7 month delay on the vote is having consequences. I'm guessing Betty Beard's whine involves money she stands to lose when prices are "renegotiated". There's still a chance that politics as usual won't take place, but I'm ready to not be surprised.

MarshCroaked
0
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MarshCroaked 01/24/10 - 02:51 am
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Another excellent article,

Another excellent article, Johnny. Thank you again for staying on top of things. We recognize and appreciate that it's not an easy task.

disssman
6
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disssman 01/24/10 - 09:41 am
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I think we all assume we know

I think we all assume we know what the area consist of but has anyone actually drawn the boundrys for this sweet little deal? The reason I ask is, the organization supposedly responsible for it is located miles away in east boundry.

justus4
124
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justus4 01/24/10 - 09:42 am
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Here's what will happen:
Unpublished

Here's what will happen: Because of the unbalance of the commission, NOTHING that was/is planned for "inner-city" development will happen. The people that reside there are mostly minorities, and their interests are a extremely low priority for that bunch. In fact, they will not allow a dime to go toward inprovement because the fix is already in...and Mason having to find out details from so-called reporters and then says, 'He plans to call Russell and find out what happened" is a complete JOKE! Ol' Russell will not be giving this guy NO information because it's something he should already know - they are already miles ahead of ya. And oh, how did Mason's handling of the attempted felony bribe work out for U know who? The inner-city has lost (as they always do) and the responsible parties are influenced by race. Great country, eh?

Riverman1
113811
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Riverman1 01/24/10 - 10:35 am
0
0
I have no doubt the deal will

I have no doubt the deal will fall through due to inability to purchase the properties. It was only a bribe to start with. Too bad the TEE project won't fall through too. That is going to be one of the biggest mistakes Augusta ever made.

disssman
6
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disssman 01/24/10 - 11:24 am
0
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Justus we are a consolidated

Justus we are a consolidated city and have been for a number of years. That means we all pay the same taxes and receive the same services (supposedly). So I ask you what is an inner city and where are its boundries. I would assume areas of the city not within the boundries are considered "outer city"? I ask because people here in rivercity tend to throw out references without really knowing what they are talking about.

disssman
6
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disssman 01/24/10 - 11:26 am
0
0
BTW where is the list of 103

BTW where is the list of 103 parcels located in the city web site? Further, how much are we paying the Florida developer for each parcel sold?

the_source
0
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the_source 01/24/10 - 11:29 am
0
0
Let's face it. The "blight"

Let's face it. The "blight" in those areas is caused by a few idiots who think they own the place (vandals, thieves, and drug dealers). Does anyone really think pouring $1 million into those areas for cosmetic work will make it a nicer place? The only thing that will do is give the criminals nicer places to trash. Has anyone ever thought to target these criminals and get them out first by life prison sentences or the death penalty? $1 million and MUCH harsher penalties will buy a lot of security, surveillance, and deterrence to make things better there.

ColCo
1147
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ColCo 01/24/10 - 11:29 am
0
0
Please re-read these two

Please re-read these two paragraphs from the article and the reason the money has not been transferred becomes crystal clear. Unless the paperwork is in place, the money will not be transferred. What is hard to understand about that?

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.

joebowles
104
Points
joebowles 01/24/10 - 01:18 pm
0
0
JUSTUS, as usual you are

JUSTUS, as usual you are wrong. Please move out of our City as those of us who care, white and black, are tired of your racism and are working on a better tomorrow. This would be easily accomplished without your negative attitude towards white people.

augusta citizen
10743
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augusta citizen 10/19/12 - 08:20 am
0
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..

..

disssman
6
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disssman 01/24/10 - 11:49 pm
0
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Joebowles maybe you could

Joebowles maybe you could tell us what the boundry limits are for the areas (Laney Walker and Bethlaham). Surely if we are going to invest mega bucks there we know the actual location. Further, what city web site has the 103 parcels listed or for that matter where the contract for the Florida company is posted. Just trying to get a little transparency of Government.

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