The closer to the finish line the more dire financial circumstances have become for the Port St. Joe Port Authority.
And whether a $60,000 a year commitment over two years, at interest, from the Board of County Commissioners will relieve that situation remained unclear last week after special meetings by both boards.
In fact, the final motions passed by the Port Authority last Wednesday, to accept the BOCC offer and ask for an additional $80,000 were never discussed by the BOCC the following day.
In reaffirming the $60,000 commitment the BOCC released the money immediately to a Port Authority that is at least $80,000 in arrears on debt now.
The money is coming from a fund established for the county Industrial Park and which can only be used for economic development.
Commissioner Warren Yeager told his fellow commissioners, without providing a reason, that he would “see if I can find” some additional funds to make available over the “next couple of years.”
Yeager, Commissioner Joanna Bryan and county attorney Jeremy Novak attended the Port Authority meeting the previous day.
After nearly two hours of debate on whether the Port Authority should accept the county’s loan or enter into an agreement with a private lender who responded to an advertisement for proposals on a line of credit, Eugene Raffield made the motion to accept the BOCC proposal but ask that it to be raised.
“I move we accept and ask for an extra $20,000,” Raffield said, adding that he believed the BOCC could meet that number by taking it out of money from the former Gulf County Economic Development Alliance, Inc.
The EDA reimbursed the county some $46,000, which last week was put in reserves.
“I guess we’ll find out if the county is going to support us or axe us,” Raffield said.
Novak suggested the motions, to accept the offer and ask for more, be separated.
Last week’s meeting was the conclusion of months of communication between the BOCC and Port Authority regarding the progress toward dredging the shipping channel and the Authority’s need for basic operating dollars.
Urgency was injected when the Port Authority advertised for proposals on a half million dollar line of credit.
“We have been begging the county for a while before we went out for proposals,” said Port Authority board member Jessica Rish.
After the Port Authority received a proposal, which in final form amounted to just under $500,000 to be drawn on over the next three to four years provided specific benchmarks to developing the Port of Port St. Joe were met, the BOCC raised concerns over a three-year-old $199,000 loan on which the first payment was delinquent.
“Technically we are in default,” Gibson said in answer to whether the BOCC could call the note.
In addition, Novak said, the loan – Community Development Block Grant dollars, not property taxes, originally sent to the county as assistance to Raffield Fisheries – was unsecured after Capital City Bank foreclosed on the port’s bulkhead property in April.
The primary asset of the Port Authority’s, the former Arizona Chemical site, is owned free and clear.
Both the BOCC and the private lender, Stuart Shoaf of St. Joe Natural Gas, wanted the first mortgage on the property.
Novak and Gibson differed as to whether the BOCC must be in the first position due to the CDBG loan.
That loan was originally secured by putting the BOCC in second position on the port bulkhead property.
Novak said the loan requires the county’s interest be secured – Gibson said the Arizona Chemical had enough appraised value to secure the BOCC and the private lender and the second position was sufficient to secure the CDBG loan.
Novak noted the BOCC’s ongoing support of the port, that in making the $60,000 additional loan the county would extend the required first payment another three years and as well as “a spirit of cooperation.”
There was expression by among county commissioners that in light of the $199,000 loan, they should have been approached first about additional financing through a loan or similar package.
“We have an obligation to the county,” said Port Authority board member Johanna White. “They are our partners. We need to continue that partnership.”
The allure of the private line of credit, at least for some Port Authority members, was its aim to bring the Port Authority completely out of debt – including meeting its annual obligations on the CDBG loan – while allowing breathing room to concentrate on becoming an operational port.
“We owe people a lot of money,” said Jason Shoaf, a member of the Port Authority board, noting the Authority has immediate need for roughly $80,000.
Shoaf, Stuart’s son, could not vote on the proposal.
Of particular concern are attorney’s fees.
The Port Authority owes the Tallahassee law firm that has long represented their interests in the Capital City Bank loan and foreclosures.
At some point, Gibson said, the Port Authority would have to call on the firm again to assist with a study to determine tariffs levied at the port and also to defend any lawsuit from Capital City contending the bank is owed more than the value it will realize from the bulkhead property.
“The county is making us a business loan,” Jason continued. “When we don’t perform, they come here and ask us to perform.
“This (private line of credit) will help us pay our debts, meet our obligations and ensures money for expenses to the finish line. And we don’t have to spend any more time lobbying where we can get money for next month. It’s distracting and it’s not necessary.”
Port Authority chair Leonard Costin agreed, making the motion to accept the private line of credit.
“We need to focus on being a port instead of spending time wondering where we are going to get more money,” Costin said.
His motion died for lack of a second.
The vote to accept the county’s initial offer was 3-1, as was the vote to ask for an additional: Rish voted no on both motions.
Raffield continually came back to a central point; this was not just about the Port Authority but about jobs, the community, the county and the region.
“This isn’t about us,” he said. “This is about the bigger picture. This isn’t just about helping out the port; it is about helping the county and the whole region.
“How much of that (economic development money) is coming to the Port Authority, if any at all, because if you are in the process of putting together a budget for economic development there is nothing more important for economic development than the port.”