Aldermen to issue mini-bond for sitePublished 12:09am Thursday, August 2, 2012
NATCHEZ — The Natchez Board of Aldermen voted 3-1 to declare the city’s intention to issue a $763,000 mini-bond and hire legal counsel for the transaction to pay for the purchase of the former pecan factory site.
The aldermen voted in June to buy the former pecan factory site for $750,000 as part of a legal settlement with one-time condo developers Worley Brown LLC.
The lawsuit filed against the city by Worley Brown was scheduled to go to trial June 29, but the aldermen voted to buy the site June 28.
Worley Brown filed the suit in September 2007 to recoup losses caused, the company has said, when it was unable to develop land on the Mississippi River bluff as a condominium complex.
The pecan factory property was donated to the city by the Krouse family more than 10 years ago. Worley Brown purchased the land from the city in May 2006 for $500,000.
Ward 5 Mark Fortenbery voted against the city purchasing the land back and also the two resolutions at Wednesday’s meeting.
Ward 1 Alderwoman Joyce Arceneaux-Mathis and Ward 2 Aldermen Rickey Gray were not at Wednesday’s meeting.
The $763,000 includes all the fees associated with the issuance of the mini-bond. The city will employ Butler Snow law firm for $10,000, and City Attorney Hyde Carby and former city attorney Everett Sanders, who was city counsel during the settlement.
Mayor Butch Brown said he is looking for alternate ways to pay the $763,000.
“I have in motion some things that will lessen the cost of this or even allow (the mini-bond) to be prepaid,” Brown told the aldermen.
Brown said after the meeting that he is looking into “creative funding packages” to offset costs, which could include grants, he said. He also said private donors may donate to help the city pay the mini-bond.
“(The donors’) personal interest would be that they want to protect the public land and make certain it becomes part of the city’s park inventory,” Brown said.
The resolution for the mini-bond allows for it to be prepaid by the city without a penalty for not going the full term of the bond.
Local lawyer Walter Brown, who said he is not getting compensated for this transaction, served as the aldermen’s legal counsel during the meeting.
He said a mini-bond is not rated like a traditional bond and eliminates the costs of issuing a traditional bond, such as a general obligation bond.
Mayor Brown likened mini-bonds to certificates of participation.
“The bank just comes in and makes a purchase like they’re making a home loan,” he said.
Walter Brown said only certain lawyers have certification to do the bond work. He said most lawyers, including himself, do not have that certification, which is why, he said, Butler Snow has traditionally been the city’s legal counsel for bonds.
In order to meet the court deadline, which requires the Worley Brown settlement be paid by Aug. 28 and advertise for the mini-bond, Brown said it was necessary for the aldermen to vote on the mini-bond Wednesday.
The city has to advertise for proposals from banks that wish to participate in the mini-bond for 10 days in the newspaper. The advertisements will start Friday, allowing the aldermen to accept a proposal at their Aug. 14 meeting.