The vote was subject to approval by the County Commission.
The authority currently pays $27,600 per year to the LaGrange-Troup County Chamber of Commerce for office and meeting space at 111 Bull St., along with utilities, phones and janitorial service. The authority still would have a phone bill at the Government Center, where it would take over second-floor space next to the tax appraisers’ office after the Georgia Extension Service moves to the former county administration building at 900 Dallis St.
“We looked at other office space that would be about half of what we’re paying here” at the chamber, said authority Secretary Jane Fryer, who retired as chamber president in December. “… I’ve been a part of the chamber for 35 years and I wish we could stay, but it’s purely a financial move.”
Fryer said she hates to see the chamber lose that rental income, but perhaps it can find another tenant.
“We have to take a lot of small steps to right the ship,” said City Manager Tom Hall, a member of the development authority. “It’s not our role to prop up another agency.”
The development authority ran into the projected deficit because ae light metal casting, whose German parent company has gone bankrupt, plans to move out of a $6 million building owned by the authority this month. It plans to make June’s lease payment and default on the remaining 29 months. The $37,000 monthly lease payments had been used to pay off construction loans of $4.5 million from SunTrust and $1.5 million from the city of LaGrange.
“We would have a balanced budget if it weren’t for those two loans,” said authority finance committee chairman Bobby Carmi-chael.
“We’ve got a noose around our neck if we don’t” find a buyer, said authority member Tom Malone.
Malone said ae’s prospects had been a “long shot,” although he voted in favor of the company’s partnership with the development authority in 2005.
“We didn’t envision the parent company going under any more than we envisioned GM going under,” said authority Chairman Diethard Lindner, who helped recruit the company to LaGrange.
He said ae plans to auction its bank-secured assets, tentatively on July 14.
To earn something on the building, the authority approved leasing 22,000 square feet at $2.50 per square foot to Hyundai/Kia supplier ITW DaeLim USA, whose plant is adjacent to ae light metal casting. The lease would generate $55,000 per year and DaeLim might wind up leasing or buying the whole building.
“It keeps us consolidated since it’s right next door,” said Mike Glynn, DaeLim’s vice president and general manager. “It has the potential to be a long-term solution (for the ae building) and certainly a short-term solution.”
The proposed lease had allowed DaeLim first right of refusal on purchasing the 150,000-square-foot building. But Malone called that provision “a hell of a downer” that could jeopardize a sale since another potential buyer would have to get DaeLim’s blessing. The authority decided to strike the provision.
“It’s a $6 million building we own and we ought to fight like hell to sell it,” Malone said.
Glynn said the company would use the ae building for storage. He said it has held off on a plant expansion until “we have a full understanding” of Kia Motors’ plans for the West Point auto assembly factory.
To further reduce the deficit, the authority hopes to get relief on the $86,250 interest it will owe the city of LaGrange next year, and it may refinance a loan on a building it leases to T-Mobile, increasing cash flow by $400,000.
Land sales in the industrial parks also would help.
Joel Martin can be reached at jmartin@l agrangenews com or (706) 884-7311, Ext. 235.
Post a Comment
