Bond issues, funding all done in the open, development group says

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By Tia Lynn Ivey managing editor

The Joint Development Authority (JDA), a four-county board tasked with overseeing the development of Stanton Springs, is demanding a retraction from the local Taxpayer’s Watchdog Group, headed by Mary Patrick, for alleging the JDA used lies and deceit to cover up over a billion dollars in bonds issued to Baxalta, a global bioscience and biopharmaceutical company, to be repaid over the course of 15 years. The JDA has issued a letter refuting the allegations, maintaining their integrity in the matter and is threatening to take legal action if the Taxpayer’s Watchdog Group does not retract and correct its statements.

Patrick, a former Jasper County Commissioner, accused the JDA members and their then attorney, Tommy Craig, “lied and deceived” the four counties of Newton, Walton, Morgan and Jasper. “Nine men lied and deceived us all, but we are not supposed to question it; just pay your increasing taxes and be quiet!” wrote Patrick, who worries what will happen if Baxalta fails and cannot pay back their remaining bond payments. “The JDA has the land and building as collateral.  If Baxter/Baxalta/Shire decides to move on or there is any other economic calamity, JDA’s debt will bankrupt all four counties.  This is exactly why the public should know what is going on with “economic development” because the taxpayer always loses while the bond agents, real estate agents, lawyers, and developers always get the money up front and win.”

However the JDA maintains that the four counties are not at risk concerning the bonds. “The Authority, Jasper County, Morgan County, Newton County and Walton County have no liability for the payment of the Industrial Development Revenue Bonds issued by the Authority in connection with Baxter. In accordance with State law, the bonds do not constitute a general debt or obligation of the counties, are not supported by a pledge of the counties’ full faith and credit, and may only be paid by lease payments received from Baxter,” said a statement from the JDA. Patrick insists that the bonds issued to Baxalta through the JDA were not properly disclosed and advertised to the public, although she notes legal advertisements for the bonds did appear in the Morgan County Citizen, but not in any other of the county newspapers. “These bonds have been a secret that no one knew about, except the above JDA members and their attorney, Tommy Craig.

It is doubtful that other members of the Board of Commissioners of the four counties knew about this staggering bond issue.  Certainly no one on the Jasper County BOC knew about this (other than Charles Hill the JDA representative), despite questions being asked repeatedly about what was being promised to Baxter.

JDA representatives must have been sworn to secrecy,” claimed Patrick, who named all eight JDA members at the time of the bonds issued to blame: Charles Hill and Steve Jordan, of Jasper County, Mort Ewing & Denny Dobbs, of Newton County, Mack Bohlen and Alan Verner, of Morgan County, and Kevin Little and Grady Lemonds of Walton County, plus attorney Tommy Craig. “In 2012 when the Baxter project was being brought to Georgia with ‘100’s of millions’ of dollars in tax incentives—including foregoing property taxes for 15 years—there was a lot written about how Baxter was investing one billion dollars in capital costs.  I always wondered why the JDA used the $1 Billion figure.  Now we all know—the JDA borrowed the money ($1,136,600,000) through bonds to be paid back by Baxter via a ‘lease agreement.’ However, JDA representatives insist that the bonds were discussed at length during numerous public meetings and addressed in multiple public documents between April and July of 2012 and a public hearing was held for the Bond Validation in July of 2012 in the Morgan County Superior Court. The JDA noted the public hearing was advertised twice in the Morgan County Citizen.

“The Authority has acted with integrity and transparency throughout its endeavors to fulfill its purpose of bringing quality jobs and tax revenues to the four counties. False allegations to the contrary not only harm the reputation of the Authority members and the four counties, but they also harm the economic development opportunities in the region. The authority will not stand silent in the face of malicious, false statements accusing it of dishonesty,” said a statement from the JDA. However, even Morgan County Commissioner Ellen Warren remarked during the county’s regular meeting on Feb. 2 that the bonds were news to her. ”

A lot of information is coming out that the public was not aware of…I was on the board at that time [in 2012], and even I was not aware of these bonds until now,” said Warren. Morgan County Commissioner Andy Ainslie, who is also a JDA member, assured Warren that the bonds issued were handled properly and pose not risk to the financial stability of the counties involved. “You have to understand, the total payback of those bonds is on the Baxalta project, the counties have no responsibility whatsoever,” explained Ainslie.

According to Ainslie, and Bob Hughes, president of the Madison-Morgan Chamber of Commerce, insisted the bonds issues through the JDA was a “tool” for tax abatement for Baxalta, which delays the property taxes owed by Baxalta. As Baxalta makes bond payments each year, a portion of the Baxalta property is “owned” by the company and Baxalta begins to pay property taxes on that portion of the land. This process continues each year until the bonds are paid off, and Baxalta begins to pay 100 percent of the property taxes on the land, which will begin in 2030.

“In 2012, the Authority issued $1,136,600,000 in Industrial Development Revenue Bonds to support the construction of Baxter’s new biomedical facility in Stanton Springs. Industrial private industry development, are coming financial tools used by local governments to support private industry development which brings jobs and tax revenue to their jurisdiction. There is nothing unusual, secretive, dishonest or illegal about the Authority’s issuance of Industrial Development Revenue Bonds in connection with Baxter. The bond validation process and bond documents were discussed in numerous public meetings. The bonds create no financial obligations or liability on the part of the Authority, Jasper County, Morgan County, Newton County or Walton County. As with all Industrial Development Revenue Bonds, payments on the bonds are the sole responsibility of the private industry, in this case Baxter (now Baxalta),” said the JDA statement in response to Patrick’s allegations. The Taxpayer’s Watchdog Group has yet to retract any statements or allegations and has issued blogposts further criticizing JDA’s defense, promising to publish further rebuttals.

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