Judge rules against Port Authority in foreclosure

Published: Thursday, February 20, 2014 at 11:08 AM.

The Port Authority mortgaged public property to borrow money for a public project, noting that the Port Authority’s resolution stated the original note “satisfied a paramount public purpose” and therefore was not unconstitutional.

“The Port Authority found that for the benefit of its citizens, it was necessary for the continued preservation of the health, welfare, convenience and safety of the Port Authority to acquire, construct and erect the intended project,” Fishel wrote in his order.

The parcel in question was upgraded with millions in state and federal dollars, including the clearing of land, installation of an access road, construction of a barge bulkhead and uplands improvements.

Fishel also found that a voter referendum was not required since the Port Authority can not assess ad valorem taxes and the debt did not constitute a “general obligation” for any political entity – the state, county or city of Port St. Joe – that would compel taxation to meet the debt.

Attorneys for the Port Authority argued that while there was no legal obligation for the state, county or city, there was “implicit coercion” that those entities might feel the need to levy taxes to prevent foreclosure.

Fishel said the Florida Supreme Court had dismissed a similar argument in a similar case.

Johanna White, a current member of the Port Authority and the lone member who served at the time the loan was taken on – and was employed with Capital City Bank at the time – said last week that she objected to the argument about coercion.

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