d) Consider Resolution for Restructure of County Line Tax Increment Limited Obligation Bonds, Series 2005The packet issued to each member provides more information:
The Mayor and Board of Aldermen of the City of Ridgeland, Mississippi (the “City”), took up for consideration the matter of issuing a taxable note of the City, to raise money for the purpose of providing funds to pay for the cost of refinancing all of or certain maturities of the City’s outstanding Tax Increment Limited Obligation Bonds, Series 2005, dated December 30, 2005, issued in the original principal amount of $5,360,000, and authorizing the negotiation of the sale of said taxable note. After a discussion of the subject, Alderman _______________ offered and moved the adoption of the following resolution:
RESOLUTION DECLARING THE INTENTION OF THE MAYOR AND
BOARD OF ALDERMEN OF THE CITY OF RIDGELAND, MISSISSIPPI,
TO ISSUE A TAXABLE NOTE, SERIES 2015, IN THE PRINCIPAL
AMOUNT OF NOT TO EXCEED ONE MILLION NINE HUNDRED FIVE
THOUSAND DOLLARS ($1,905,000) TO RAISE MONEY FOR THE
PURPOSE OF (I) REFINANCING ALL OF OR CERTAIN MATURITIES
OF THE CITY’S OUTSTANDING TAX INCREMENT LIMITED
OBLIGATION BONDS, SERIES 2005, DATED DECEMBER 30, 2005,
ISSUED IN THE ORIGINAL PRINCIPAL AMOUNT OF $5,360,000; (II)
PAYING THE COSTS OF ISSUANCE IN CONNECTION THEREWITH;
AND (III) FOR RELATED PURPOSES; AND (IV) AUTHORIZING THE
NEGOTIATION OF THE SALE OF SAID TAXABLE NOTE....
5. That in order to prepare the necessary resolutions and documents for the negotiated sale and issuance of the Note, it is in the best interest of the City to authorize the law firm of Butler Snow LLP, Ridgeland, Mississippi, as Note Counsel, Jerry L. Mills, Esquire, Ridgeland, Mississippi, as Counsel to the City, and Government Consultants, Inc., Jackson, Mississippi, as Financial Advisor, to negotiate and prepare and distribute such resolutions and documents necessary in order to negotiate and facilitate the sale and issuance of the Note of the City to Trustmark National Bank, Jackson, Mississippi, or such other bank as may be advisable, subject to the approval of the Governing Body of the City at a subsequent meeting of the Governing Body of the City.
The proposed refinancing will be presented to the aldermen for a vote. Ridgeland filed suit in June 2013 to collect TIF payments from LR Company. The complaint stated that LR owed $97,575 (2011 payments) and $96,713 (2012 payments). The two parties agreed to dismiss the case in October 2014.
The 2014 Ridgeland Comprehensive Financial Report provided the following information (p.111):
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The following email was circulated among several Ridgeland neighborhood associations yesterday:
One neighborhood association president included this message with the email:This Tuesday, September 1, 2015, 6 p.m., the Mayor and Board of Aldermen will meet at City Hall to discuss and act on the refinancing of the Lowe's TIF (Tax Increment Financing) bond debt.TIF Bond financing is a public financing method that is used to subsidize a development project in a community. It allows municipalities to dedicate future tax revenues from the development to repay the principal and interest on the bond (sales and ad valorem taxes that SHOULD go into the general fund). These bonds are issued by the municipality (the City of Ridgeland) to subsidize the developer (LR Company LLC, Andrew Mattiace managing member) in building the project (Lowe's).As you may recall, Andrew Mattiace was the developer of Lowe's off County Line Road in Ridgeland, and at the time that he proposed the Lowe's development, the city issued a TIF bond to finance the construction of Lowe's. Mattiace, at the time that the bond was issued (serving as the Manager of LR Company, LLC) signed a guaranty in which the LLC committed to make up any shortfall (the difference between the taxes collected and the amount needed to satisfy the bond debt). He, of course, was anticipating that the tax revenue would service the debt entirely.Subsequent to its opening, the sales and ad valorem taxes collected on the Lowe's development have been insufficient to repay the principal and interest on the bond. LR Company LLC (as required by the guaranty) made up the difference for 3 years, and then Mattiace informed the city that the LLC would no longer make up the shortfall. Mattiace and his company were released by the City from the deficit obligation.NOW, the city is proposing to refinance the Lowe's TIF bond debt ($1,905,000) and the City (you and I) will be repaying the TIF Bond debt out of the general fund instead of requiring Mattiace's LLC to honor the guaranty and what should be his LLC's obligation. The City of Ridgeland should not be making up the shortfall; Mr. Mattiace 's defunct LLC should be!This is the same Andrew Mattiace that is proposing to serve as the master developer of Renaissance 2 (north of Renaissance 1) and Renaissance 3 (Costco and others located south of the Natchez Trace Pkwy. between I-55 & HIghland Colony Pkwy.) and will be using a Mississippi Development Authority (MDA) Sales and Use Tax Rebate Program for TOURISM PROJECTS to help build it ($29.6 million of OUR tax dollars)!If you are concerned that the City is using YOUR tax dollars to pay the debt obligation of Andrew Mattiace's LLC, you and your neighbors may want to go to the meeting at City Hall on Tuesday, September 1, 2015, at 6 p.m. and voice your opposition.Attached is the Resolution of the Mayor and Board of Alderman to refinance the Lowe's TIF Bond debt.
Sounds like there might be some post-Fourth of July fireworks tonight in Ridgeland.Below is an email notice about the upcoming meeting at City Hall. The meeting agenda includes a proposal to refinance the 'shortfall' for the difference between the sales taxes generated by the Ridgeland Lowe's near County Line Rd and the debt owed bondholders for the TIF bonds issued to finance the development.This is an important agenda item for the City because the shortfall was guaranteed by L.R. Company, LLC - a company owned and managed by the Lowe's developer, Andrew Mattiace. Our Mayor and city aldermen (except for Ken Heard) voted in 2013 to release L.R.Company, LLC and Mattiace from any further debt obligation related to the TIF bond debt. The city has apparently been paying the debt shortfall out of general funds, which is a highly questionable action and likely prohibited. The city apparently sought an attorney general opinion on the matter in about April 2015, then quietly withdrew the request in June 2015.