A hearing next month will have significant impact, for better or worse, on development at the Port of Port St. Joe.

A hearing next month will have significant impact, for better or worse, on development at the Port of Port St. Joe.

The hearing, scheduled for July 17 before Circuit Court Judge Shonna Gay Young, is on a motion to foreclose on 67 acres of port land brought by Capital City Bank.

Both sides seek summary judgment, meaning there is no dispute of material legal facts.

The bank seeks foreclosure due to a $4.3 million loan in arrears – the Port Authority has not made a payment on principle in at least two years.

The Port Authority’s defense is that the body lacked authority, under state law, to mortgage public property without a public referendum in the first place.

A decision, port attorney Tom Gibson said, would not be expected immediately.

“The most likely outcome is the judge makes no decision” that day, Gibson said.

The 67 acres represents the port’s barge terminal, the bulkhead and uplands. The improvements to the property, in the millions, came from state and federal grant funds.

Port Authority members have publicly and consistently stated the intent to pay the debt, but currently there is no revenue.

The hearing complicates a request from the Board of County Commissioners.

During recent meetings, several commissioners have pressed the port about a $199,000 economic development loan – a fraction of 1 percent of funds received by the port in the past decade – the port received last year.

Port Authority Chairman Leonard Costin appeared before the BOCC a few weeks ago to inquire if the debt payment schedule could be amended due to the port’s current lack of revenue.

The Port Authority has 10 months to make the initial payment.

County Commissioner Ward McDaniel asked if the Port Authority would be willing to consider as collateral a mortgage on the old Arizona Chemical property; 100 acres and infrastructure donated to the Port Authority by the parent company of Arizona Chemical.

“I understand where they are coming from but I don’t see any reason to restructure the agreement,” said board member Patrick Jones, who has long expressed opposition to any encumbrances of Arizona Chemical parcel. 

The county is second in line behind Capital City Bank on the mortgage for the barge terminal parcel.

The Circuit Court hearing will impact the county’s position.

Should the bank prevail, the county’s position is moot.

Should the port prevail, it would be unlikely, Gibson noted, that any port property could be mortgaged without a public referendum.

“I can’t tell you you will have the power to give anybody a mortgage,” Gibson said.

Board member Eugene Raffield suggested and the board agreed to ask the BOCC if the Port Authority could delay any decision until after the foreclosure hearing.

“We are very concerned and want to pay everything that we owe,” Raffield said. “But we can’t make a decision until after Capital City Bank is addressed.

“We want (the BOCC) in the loop. They have to be responsible for that money. We need to be good stewards.”

The county dollars are federal economic development dollars meant to be a revolving loan program by which the BOCC awards the money to various businesses for expansion or development.

When the money is repaid it is awarded to another eligible entity.

Raffield Fisheries used the same funds to expand its freezer capacity at its fish house.

Dredging/Master Plan

Gibson and port director Tommy Pitts told the board the update to the master plan was completed and the Port Authority board formally adopted the plan and forwarded it to the city of Port St. Joe.

The city must hold public hearings before its planning board and commission as part of the process of updating the city’s comprehensive plan to include the new port master plan.

Pitts said he asked the two engineering firms on continuing contract with the Port Authority to submit statements of qualifications specific to maintenance dredging.

 Pitts said the aim was to dredge to a minimum of 33 feet with the hope of ultimately going to the federally-authorized 35 feet.

“That opens up all kind of opportunities,” Pitts said.

Raffield wondered, as he did at the prior board meeting, if the Tourist Development Council should be brought into the loop. There is potential some dredge material could be suitable for beach nourishment, he said.

“I have always considered beach renourishment as a secondary benefit of dredging,” Pitts said.

Meeting with Montford

Costin said he had a meeting Gov. Rick Scott’s office with Scott’s chief of staff and state Sen. Bill Montford (R-Tallahassee), who represents Gulf County.

Montford had attempted to work with Capital City Bank to secure a $2 million state appropriation to partially address the port mortgage and allow time for port development to take hold.

Costin said the meeting was positive, that it was informational as he related how dynamics changed since collaboration with the St. Joe Company to develop the port was etched in writing.

The concern from the governor, Costin indicated, was the lack of tangible progress over recent years despite the investment of millions of state and federal dollars.

Costin said he provided information and emerged the meeting, scheduled for 15 minutes but spanning nearly an hour, with optimism the port message, a different one from as little as two years ago, was conveyed.

Board communications

Pitts addressed board members concerning a letter to the editor from board member Johanna White published in The Star two weeks ago.

Pitts, who outside of administrative dollars in a grant to update the master plan works for $1 per month, said he had not formally responded publicly and had hoped White – who was absent – attended the meeting in order to be able to talk directly.

Pitts said he believed the letter incorrectly implied that he “led the board” instead of taking direction from the Port Authority board.

Jones asked, motioned and the board approved including Pitts’ complete response to White’s letter into the regular meeting minutes.

Costin said the board should handle such matters internally.

More than a year ago, shortly after the collaboration agreement with St. Joe was signed, Costin and Gibson emphasized the importance of port officials speaking with unified voice and message.