Coleman tried to rescind the council’s decision to underwrite $221,000 in interest payments for the Marietta Redevelopment Corp. to Bank of North Georgia, but failed because of a procedural problem.
Coleman hoped having new members on the council — Michelle Cooper Kelly, Johnny Walker and Stuart Fleming — would help him reverse the contentious December 4-3 vote that approved shelling out the cash on the MRC’s 8 acres of vacant lots and properties off Powder Springs Street across from the Hilton Marietta Conference Center.
The properties were purchased for redevelopment with a $4.2 million loan held by the Bank of North Georgia. About $2.1 million in seed money came from the city.
The bank asked the city to guarantee $225,000, which equals 18 months of interest payments on the loan.
After months of talk, the bank agreed to spread out the payments over 36 months. The MRC will pay the first 19 months with the city paying the remainder, which is now $221,000.
Though Coleman’s attempt to rescind the council’s decision didn’t make it to a vote, he and Councilman Philip Goldstein still had their say, attempting to derail a vote on a budget amendment appropriating the money.
That effort also failed.
Coleman and Goldstein were the only two to vote against the budget amendment.
If the pair had been
successful, City Attorney Doug Haynie said it would have created problems for the MRC.
“If you were to not approve this item, it would likely create a default between the Bank of North Georgia and the MRC,” Haynie said.
A large increase in property value would be needed, Goldstein said, for the city to get its money back.
“Basically, this council is being asked to set aside money for the interest which would be paid not in this budget year but in the next budget year, money the city will likely never benefit from,” Goldstein said.
Goldstein argued it would be best to let the property be foreclosed on.
“If this was any of our monies, individually, I don’t believe this is the path we would take,” Goldstein said.
The MRC is a separate legal entity, though it receives funding from the city. Still, Councilman Grif Chalfant, the council’s liaison to the MRC, said the city has a moral obligation to see the project through to the finish line because it initially funded the redevelopment project.
Yet Goldstein says it’s not the city’s responsibility because the MRC is an independent corporation.
“I admit that, Philip,” Chalfant said, sitting up in his chair at the dais and raising his voice.
“I know, Philip, legally we’ve worked in a contract in there that says we’re not responsible. We can say we’re not responsible for a lot of things, but that doesn’t mean that we wouldn’t get sued.”