One way or another the Port Authority of Port St. Joe wants to put foreclosure litigation with Capital City Bank in the rearview mirror.
Port Authority members met in a public meeting last Friday and decided to see, as attorney Tom Gibson characterized it, “see if there is anything they would want from us” that might be worth some dealing to close the case.
If there is not, Port Authority members decided, they would let the so-called Parcel B mortgaged through Capital City Bank to be auctioned on the steps of the Gulf County Courthouse April 10.
Since a circuit court judge ruled in favor of Capital City Bank and subsequently signed a final order in the foreclosure litigation, some Port Authority members have expressed an interest in seeing the case closed, rather than appeal the ruling.
The perception surrounding seeking tens of millions from the Florida Legislature to dredge the federally-authorized shipping channel while battling foreclosure litigation in court had provided pause for some Port Authority members.
“We should vote to walk away and have a meeting with Capital City Bank,” said board member Jason Shoaf during the last regular monthly meeting. “We should be putting this to bed immediately. And separate the port from the foreclosure.”
There is also the reality that the Port Authority, currently in the midst of a community capital campaign aimed at raising basic operational fund, lacks the resources for a protracted legal fight.
“We just don’t have the money to fight it,” said Port Authority chair Leonard Costin. “Also, our focus is on dredging the ship channel.”
A carrot with Capital City which might be in the Port Authority’s possession is a railway easement through the Arizona Chemical property, which is owned free and clear by the Port Authority.
The rail easement, which was discussed by board member Jason Shoaf during the prior board meeting, would be of significant value, Gibson said.
The value, Gibson noted, arrives when an operational port, after rail line improvements, can offer rail access from bulkhead attached to a dredged shipping channel with connection to Chattahoochee, I-10 and points north.
“That will have real value to whoever ends up owning that property,” Gibson said.
A deal with Capital City for such an easement could help the Port Authority in two ways.
If a deal could be brokered, it would prevent the possibility of a deficiency judgment against the Port Authority should the Parcel B property not bring at auction what is owed Capital City Bank, recently estimated at north of $5 million.
The Port Authority has never had the property - which is the barge terminal land, 60-some acres along the Intracoastal Canal – formally appraised, leaving as unknown how much the property is worth.
Gibson noted that the Arizona Chemical site, which is smaller, was appraised at $2 million when donated to the Port Authority by International Paper several years ago.
The former Materials Transfer Industries site just up the canal was appraised at $7 million when under a purchase agreement with a company that intended to bring a biomass electric generating plant to Port St. Joe.
The value of the easement could also be sufficient to warrant an additional cash payment from Capital City, Gibson said, to help the Port Authority defray attorney’s fees related to the litigation, which now stand at over $40,000, money the Port Authority does not have.
Gibson said Port Authority members want some say in an easement, specifically a right of first refusal in the event Capital City would sell the easement, and control over where on the Arizona Chemical site it would be drawn.
Gibson and Shoaf are to meet with Capital City Bank officials this week.
The Board of County Commissioners is also a party to the litigation.
The BOCC has a second mortgage on Parcel B, linked to a $200,000 loan from the BOCC to the Port Authority out of federal economic development dollars.
That mortgage would go away if the property is auctioned on the courthouse steps.
The BOCC, unlike Capital City Bank, however, has a vested interest in seeing the Port Authority succeed in dredging the shipping channel to create an operational port.
“We are working together on the port,” Costin said.