New board seeks bonds for Square on Carter project

Published 12:08 am Wednesday, July 15, 2015

VIDALIA — The Vidalia Board of Aldermen voted 4-1 Tuesday night to again seek approval for up to $7 million in bonds for the Square on Carter project — but this time, they weren’t voting as the board of aldermen.

The members were instead voting as the governing board of the Carter Street No. 1 Development District, a body created last August in order to levy special sales, hotel occupancy and ad valorem taxes to support the construction of infrastructure within the district.

When the board created the district, they named the members of the board of aldermen as its independent governing authority.

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The proposed Square on Carter site is wholly contained in the district, which is otherwise undeveloped, said Jason Akers, an attorney with Foley & Judell, the town’s bond counsel.

The Square on Carter proposal is part of a wider master plan for the city and calls for the purchase of adjacent parcels of property near Walmart on U.S. 84.

The parcels — 31.67 acres owned by Scroggins Investment Co. and 32.72 acres owned by BCHT, LLC. — would then have public infrastructure such as streets and utilities installed in an effort to lure residential, commercial and business interests to the pre-developed site.

The city’s bond application was delayed several times before being put aside indefinitely after the state attorney general’s office advised the bond commission the city’s application might not meet the state constitution’s guidelines for public purpose.

But in this case it won’t be the city seeking approval for the bonds, but the economic development district whose board is composed of the same voting members.

Prior to taking the vote to seek preliminary approval for the bonds as the development district, the members of the board, acting as aldermen, adopted a resolution to enter into a cooperative endeavor with the development district’s board — themselves.

“What (the aldermen) are doing with approving the cooperative endeavor on behalf of the town is authorizing the district to issue the bonds and use those bonds for a project,” Akers said.

The district’s bonds will be paid back with its revenues, including the taxes the district can levy, he said, but the agreement also obligates Vidalia to make up any difference if the revenues collected in the district are not sufficient to cover the bonds.

“There is no economic activity there, but it is projected to be, and as it is developed (revenue) will increase,” Akers said.

“Those taxes, as they begin to rise, the obligation of the town to pay debt service will decrease, hopefully to the extent that the taxes levied by Carter Street (Development District) will be sufficient to pay all the bonds.”

Vidalia Mayor Hyram Copeland said similar arrangements are in place across the state, and Akers said he was in the Town of Sulphur last night for a similar arrangement.

Akers said the Bass Pro Shop in Denham Springs was funded through a similar district, as was the retail shopping area near Gonzales.

“It is not something new, it is not a reinvention of the wheel,” he said.

The resolution the aldermen adopted — acting as the district — is for the district to seek will be for no more than $7 million in bonds for no more than 20 years at no more than a 7 percent interest rate.

In all of the votes on the matter, as aldermen and as district governors, the vote was 4-1 with Alderman Jon Betts voting against the measures.

During the meeting, the project for which the bonds would be used was never directly referred to as the Square on Carter project, but Concordia Parish Economic Development Executive Director Heather Malone confirmed after the meeting the bonds would be for the purchase of land and development of infrastructure in connection with the Square project.