Tuesday, September 1, 2015

Rumble in Ridgeland over Lowe's TIFs tonight.

The Ridgeland Board of Aldermen will consider refinancing the TIF bonds issued for the Lowe's project on County Line Road in 2005.    The meeting begins at 6:00 PM. The agenda states:

d) Consider Resolution for Restructure of County Line Tax Increment Limited Obligation Bonds, Series 2005
The 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:


 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):

Click on image to enlarge

 The following email was circulated among several Ridgeland neighborhood associations yesterday:

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.
 One neighborhood association president included this message with the email:

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.  
Sounds like there might be some post-Fourth of July fireworks tonight in Ridgeland. 


Anonymous said...

Will the bond counsel get paid?


Kingfish said...

Colonel Gritz, that you?

Anonymous said...

Andrew Mattiace should be tar & feathered and run out of Mississippi!
The Mayor and city aldermen (except for Ken Heard)should be recalled and if you can't recall voted out of office at the next election.
Tired of tax money being misspent on project the public don't want.

Anonymous said...

Ridgeland is long past the point of needing to pay businesses to locate here.

So tired of these elected crooks bought & paid for by the real-estate developers, etc.

Anonymous said...

As yes, the fees for the bond counsel. By refinancing the debt how much in interest are you saving? Maybe 1% on 1.9 million per year = $19,000. For sure, the legal fees & the costs of placing the bonds will far exceed any possible interest savings - 1.9 million in a taxable muni issue is extremely small potatoes, and the selling concession to the bond buyer/dealer will likely be at least $80,000.

So that begs the question - why do you want to refinance these bonds? Is it because the City is afraid of the legal consequences of paying off the shortfalls contrary to the previous bond covenant. OR - is it because LR LLC & Andrew Mattice wants the refinance so he can be forever released from paying future shortfalls, and he is holding the Costco project over the city's head?

Whatever the outcome, it just goes to show you that boards of alderman/boards of supervisors/city councils are simply clueless about how any of these financing deals work in the long run, and will believe anything someone tells them when it comes to the supposed "economic or financial benefits" which these deals allege to provide.

Anonymous said...

The email to the neighborhood associations contains at least one error. TIF bond proceeds were not used to "... finance construction of the Lowe's ..." TIF bond proceeds are used to reimburse a developer pursuant to a formally adopted development agreement for "qualified 'public' infrastructure improvements such as accesses, drainage structures, sewage infrastructure, lighting, etc." Further, whether or not it was kosher for Ridgeland to let Mattiace off the hook pursuant to the guaranty is not germane to the proposed action before the board. One must assume that the proposed action is designed to address and minimize the impact of the bond repayment stream on the general fund revenues by restructuring the debt obligation in a manner most favorable to the City. The City is obligated to repay the TIF bonds regardless, so it may as well restructure the bond obligation in a manner that reduces the negative impact on Ridgeland taxpayers. And, yes, the bond lawyers will get paid. So will Mills. And so will the brokers.

Anonymous said...

Right about is when Chief Cadet Ben Allen usually shows up to say that TIFs are used everywhere and then asking everyone if they even know what TIFs are.

Anonymous said...

Is KF going to post video of this meeting? Hope so! It will be interesting to see the public interest in this matter vs the Costco fiasco. Should be standing room and remote viewing only. If it's not, then it just proves the residents against Costco are only interested in their bike trails and self serving attitudes.

Anonymous said...

@10:58 - as you state, the proposed action to refinance the bonds is meant to minimize the damage already done to the city finances. Meaning the 1.9 million in principle being refinanced is scheduled to be paid probably within the next ten years, originally with money from LR, and now with money the city doesn't have and likely won't have in the near term. So this proposal lets the city call those short term bonds and then reissue bonds with up to 30 year maturities, at no interest savings. Then the city will have bonds they are paying back long after the original project become economically useful, as Lowes will be gone long before the final bonds are paid off. I fail to see how this helps the city, when the board is going to be voting to put the burden on future residents of Ridgeland who aren't even going to benefit from the project. Of course this is how governments work, spending money now and leaving it to someone in the future to pay the mess off, just like the 2005 board did. The true economic solution is for the City to just keep the old bonds, admit they were hosed in 2005 by faulty projections, and add it to the sales tax. But by doing this, a real cost is imposed on the taxpayers, and then they can clearly see what years of incompetent city government does. Because their is no free lunch. Like the old commercial says "You can pay me now, or you can pay me a whole lot more later"

Bike Trail said...

What's the point of this conversation? There really is no sensible alternative. Y'all are farting in a whirlwind.

Anonymous said...

Speaking of projects, what about Harbor Walk? Remember the cluster fruck when they closed Harbor Drive? What happened to the bonds on this one?

Anonymous said...

Ridgeland at best seems to have an inept & incompetent board of puppets.

Anonymous said...

Is it legal for a municipality in Mississippi to sell bonds to refinance uncollectible debt?

Anonymous said...

Does the refi turn these bonds into general obligations of Ridgeland? Or were the original TIF bonds already g.o. bonds?

Anonymous said...

There is no recall process for local elected officials in Mississippi. I already checked.

Anonymous said...

What is wrong with you? When did economic development become a bad thing? Wait...don't answer that by repeating the same lies. You should all get out more, travel the country, stop along the way, enjoy yourselves. If not to see successful parts of the country, then to give yourselves something else to do. Get a life! You're doing nothing but sharing erroneous information and giving bored housewives and househusbands a project. This has become a personal manhunt with no accountability.

Anonymous said...

Very little financial benefit except to the bond lawyers and finance people to refinance. Must be extending the term substantially.

Anonymous said...

I would have thought Ridgeland would require more intelligent, qualified elected officials than what we have witnessed lately. If one has no idea what one is doing, at least one could be honest in ones incompetence.

Anonymous said...

Only thing missing is the Malachi pimps though they are awfully busy whoring out Jackson and Hinds.

Anonymous said...

According to filings on the Mississippi Secretary of State's website, LR Company, LLC was dissolved as a corporation effective May 4, 2013, which is prior to the date Jerry Mills sued them on behalf of the city. (Way to go Jerry, really on top of things there.) Does that make any release LR Company subsequently signed with the City of Ridgeland void or voidable, since LR Company no longer existed? Can Ridgeland go back now and still try to get the money from Mattiace directly, since he was the managing member of LR Company,LLC, but he no longer enjoys the LLC protection since it was dissolved ?

Anonymous said...

Ridgeland may lose Costco yet! I heard Mayor Yarber is currently attempting to reel Costco back into Jackson, by having them locate in the soon-to-be-vacated Best Buy building.

Anonymous said...

Yeah! I've also heard that Tony loves baloney sandwiches.

Anonymous said...

Mayor Yarbor doesn't listen or never watched Costco's presentation in Ridgeland. They want acreage and excellent road access to the store. Countyline on a good day is horrible. If your in the wrong lane, you're going to miss your turn and then....you get to travel somemore, catch a light or 2, make a u-turn and start all over. Do you really do really want gas pumps in the middle of that parking lot? Then you have the question of demographics (which Costco initiated) and to top it off, the city always requires the company to hire 20% of the companies workforce pre and post construction from Jackson. It's an impossible sell. Anywhere along 220 or on 55 and the crime rate is way too high. Armed guards inside and armed security outside with shotguns doesn't give shoppers a warm fuzzy welcome.

Anonymous said...

Shorter 6:06 - not smart enough to drive on County Line Rd.

Bet the HCP roundabout thwarts you, too.

Anonymous said...

Attorney could not say that city actions were legal. Could not site statute saying acting were legal. B/A did not know if their actions were legal. What a way to run a city? We do not have time to get legal opinions. We just do what we want to do.

Anonymous said...

One has to wonder how much Mattice etal are "contributing" to the good Mayor Magoo and his minions for all these great deals and bailouts. How much has Ridgeland already paid in TIF shortfalls for the Lowes deal? And how much has Madison County paid for the boondoggle Parkway East? If only we had an honest and competent state auditor and attorney general that could/would follow the money....

To Summarize.... said...

The shelf-life of this type store foremat has expired. Mix that fact with part time employees who can barely tell you where the restroom is, unknowledgeable whales wandering around in company shirts and a store manager who can't spell his job title and, Mission Director, we have a problem in Houston.

And there is too much stolen shit on the market in this area, barely out of the box, like new, very cheap.

Anonymous said...

Well, how much revenue to the city of Ridgeland did a Lowe's bring to Ridgeland's economy>

That has to be the question asked.

And, the second part is why aren't the revenues going first to satisfy the bond debt?

Anonymous said...

Does anyone know which two Alderman voted for the tax increase? Or, technically speaking, which two voted against Hamlin's motion not to raise the millage rate?

Anonymous said...

Ramsay was the alderman who made the motion to keep the current millage rate. Scott Jones and Wes Hamlin were the two aldermen who voted against it.

Anonymous said...

All of the residents of the entire city of Ridgeland should thank Ridgeland Citizens for Responible Development for defeating the property tax increase last night!

Anonymous said...

Thanks, 12:46. You would think the CL would include that in their story..

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