After months of pleading it lacked funds to assist the Board of County Commissioners held a special meeting last week to discuss a possible loan of county funds to maintain the presence of the Port St. Joe Port Authority.
Commissioners debated whether to provide funding as the Port Authority strives to keep operating until dredging of the federally-authorized shipping channel at the Port of Port St. Joe is completed next year.
The exact amount of funding, the term of any loan and other components of a deal are to be presented during Tuesday’s 9 a.m. ET BOCC regular meeting and taken up the following day by the Port Authority during a special meeting.
The discussion arose from a Port Authority advertisement requesting proposals for securing of a line of credit of up to $500,000. That request drew a proposal from an individual lender.
The primary goal is to maintain minimal – there is no staff – function at the Port Authority while permitting, funding and completing the dredging of the ship channel is complete.
The foundation for dredging, and state funding for dredging and improvement to rail lines connected to the port, is two letters of intent between energy companies and the St. Joe Company, which owns the coastal land in the port master planning area, to ship through the Port of Port St. Joe.
One of those contracts is nearly finalized, said Tom Gibson, attorney for the Port Authority. The other is in the process of being finalized.
The dredging is on track to be completed next year.
But the Port Authority, the public entity that is collaborating with St. Joe to develop the port, and which will be, upon their formal signing, be party to the two energy company contracts, needs immediate funding.
“The port needs to have an ongoing presence during this process,” Gibson said.
Obligations such as liability insurance for directors and the board, dues to the Florida Ports Council, an audit, and miscellaneous expenses on an annual basis are required to sustain basic operations.
With less than $3,000 in the bank, the Port Authority is in danger of going out of business within several months.
A community fundraising campaign drew a response not at the level hoped for or needed.
Outreach to local governments – in addition a recent special meeting, Port Authority members have lobbied the BOCC for assistance – went for naught as commissioners repeatedly pleaded poverty.
The tipping point for last week’s special BOCC meeting was the Port Authority’s request for proposals on lending, a potential private lender and, most prominently, a previous $199,000 BOCC loan to the Port Authority.
The first payment on that 2011 loan – funded not from property taxes but federal Community Development Block Grant dollars distributed to spur economic development, originally through expansion of Raffield Fisheries – was due in May.
Port Authority chair Leonard Costin long ago approached the BOCC about delaying that payment until the port was operational.
Since Capital City Bank foreclosed on property owned by the Port Authority – the former barge bulkhead – that county loan from CDBG funds has been unsecured.
Initially, the loan was collateralized with a second mortgage on the barge terminal property, but that position vanished when Capital City Bank foreclosed.
The Port Authority owns the old Arizona Chemical site outright and questions concerning whether could be used as collateral on financing have been assuaged by the state, Gibson indicated.
The private lender offering the Port Authority a proposal on a $300,000 line of credit is requesting a mortgage and county attorney Jeremy Novak encouraged Port Authority members to approach the county before leveraging the Arizona Chemical site in light of the prior $199,000.
“The most important thing is to secure that loan,” Novak said.
Gibson said the Arizona Chemical site had been appraised at more than $2 million, which left sufficient value to either or both lending proposals if the BOCC would provide a funding plan.
“There is plenty of security there for everybody to be covered,” Gibson said.
Commissioner Carmen McLemore said the BOCC could sue to recover the CDBG funds or move forward with the port and said he was open to the discussion.
However, he insisted that the BOCC receive first position on the Arizona Chemical site and said he was opposed to any agreement involving the BOCC, Port Authority and a third party lender.
“If the port can get a better deal for their operating money and can still secure the county’s ($199,999) loan, we may go with a private lender,” Gibson said. “We will consider our options.
“Nobody on the board does not want to pay that money back. The priority is getting to the end of the dredge project. We are getting to the finish line.”
While there has long been a desire to have the BOCC as a partner, some on the Port Authority board have been leery about what strings might be attached and to what extent autonomy undermined.
McLemore also wanted no long term agreement, suggesting lending the Port Authority essential funds for two years and revisiting.
“I consider us partners of the port and I think we can find $50,000 or so within the budget,” said Commissioner Warren Yeager, alluding to estimates on basic annual dollars needed by the Port Authority.
“After I heard about this I contacted Department of Transportation Secretary Ananth Prasad and he feels very confident. He thought everything was going forward. I think things are going in the right direction.”
Commissioner Joanna Bryan said commissioners must be careful.
“We need to be cautious on how the money is spent,” Bryan said. “I am in support of the port but it’s my role to be responsible for public dollars.
“We all want the port to be successful. But wanting it doesn’t make it so.”