Board of Supervisors to purchase warehouse outrightPublished 12:11am Thursday, June 13, 2013
NATCHEZ — A chance to help a local industry speed up a $30 million investment prompted the Adams County Board of Supervisors Wednesday to simplify what had become a complex process to purchase large warehouse near the Natchez-Adams County Port.
The county had originally planned to help purchase the building through a complicated agreement that would have a third-party holding the property’s deed. Instead supervisors decided to purchase the property outright.
The change in financial arrangements was prompted by an immediate need by Genesis Energy to complete a $30 million expansion of its operations at the port, Natchez Inc. Executive Director Chandler Russ said.
Those operations need to expand into the acreage associated with the riverside warehouse the county has already agreed to purchase, Russ said.
The warehouse the county is buying will now be purchased with the not-to-exceed $3.2 million bond the county originally advertised in connection with the Elevance project.
Genesis announced last month that it would more than double the size of its railcar capacity at its terminal in the port and add approximately 20 new jobs.
The first phase of Genesis’ operation, which will move oil products through the port by rail and barge, has 40 railcar slots and is scheduled for completion this month. The second phase — the May announcement — will add 60 more railcar slots.
The county was awarded a $2.5 million bid — a bid that was submitted at the urging of Natchez Inc. — for the warehouse property in February 2013.
The port authority has operated the warehouse on behalf of Valley National Bank since February 2012, when the bank foreclosed on the building’s former owners.
At that time, the county planned to purchase the warehouse using a certificate of participation (COP), in which a non-profit organization — Southwest Mississippi Planning and Development District — would have held the property title and debt service of the warehouse, with the port continuing to operate the facility to generate funds for a lease-purchase. Once the lease-purchase was completed, the title to the property would have been transferred to the county.
The certificate of participation would take too long to complete for the needs of the company planning to make the expansion, county attorney Scott Slover said, so the county decided on the advice of Natchez Inc. and its bond counsel — Sam Keyes — to use the Elevance bond to expedite the purchase.
“This was not anticipated even a few weeks ago from this board that we would need to move forward so quickly,” Slover said. “The Elevance bond was structured in a way that if it wasn’t used in a certain amount of time, you have to start over, and it was about to expire.
“It is just a vehicle that is available for the short term that we have.”
The board attorney said the move should not be considered a reflection on the Elevance project, and that the county has an alternative way of funding that project through a loan and grant program that is already in place. The county will consider using the rest of the bond for infrastructure commitments tied to the Elevance project as it moves forward, he said.
“If the money is unspent, it just goes back; it is there for the county to use for what it needs, but it is not a line of credit,” Slover said.
“The COP wasn’t going to be done quick enough to get our industrial prospect the property they need to start their expansion, and it wasn’t worth the risk when we looked at it.”
Though the bond was originally advertised as being for the Elevance project, Slover said that the supervisors felt comfortable using it for the warehouse purchase based on the advice of their bond counsel.
“The ads were broad enough that this is an option,” he said.
The bond payments will likely be funded by lease agreements on the property, Slover said.
Wednesday’s meeting of the supervisors was in closed session because it was tied to the acquisition and sale of property, and because it could have an impact on an industrial prospect, Slover said.
Russ was present in the meeting, and Keyes attended by conference call.