By Daniel Brunty
The Winston County Journal
The reconstruction process for the Winston Medical Center took a step forward as the Winston County Board of Supervisors approved the ground lease during its November 23 meeting held at the Winston County Courthouse.
The board met with Mr. Jet Hollingsworth and Ms. Anna Watson, representatives of the Butler Snow Law Firm out of Jackson. Butler Snow is assisting the hospital in applying for Federal New Market Tax Credits.
Hollingsworth and Watson presented the supervisors with the ground lease and memorandum for the ground lease.
“These are the only two documents that are coming from the county,” Hollingsworth said. He also explained what this lease and resolution brings to the hospital project.
“We ended up with a 45 million dollar allocation of tax credit authority, as well as 20 million of state tax credit allocation authority,” Hollingsworth stated. “This ground has been negotiated with the investors that are going to purchase the tax credit authority and it is also has been negotiated with the community development entities, which are the entities that actually act as a conduit for finance.”
Hollingsworth informed the board that the senior lender for the transaction would be Renasant Bank. “There is no debt associated with this lease,” Hollingsworth said. “There are no obligations of the county other than the fact the county is going to be ground leasing to this newly created Public Benefit Board/ Corporation.”
With this ground lease, county officials are leasing the land for the hospital to the Public Benefit Board/ Corporation. This allows for the county to avoid any tax increases for the residents of the county if there is any violation of the lease.
Board President Mike Peterson had some questions and concerns. “The tax credits, what does it mean for us in dollar at the end of the day, that we can spend and not pay back?” Peterson asked.
Hollingsworth stated that the net benefit of those credits would be close to 10 million dollars. “We are monetizing federal and state tax credits for the benefit of this project,” Hollingsworth stated. “The bottom line is people are buying those credits at a discounted rate, and we get the benefit of the purchase price.”
Peterson then asked if in case of payments are not being made in agreement to the lease, what would happen to the ground lease. Hollingsworth stated that Renasant Bank, being the senior lender, it would be the one to call for a foreclosure or other alternative.
“Foreclosure, keep in mind, in any sense, is always just subject to the ground lease,” Hollingsworth said. “You are not giving up your title to the property.”
Peterson also expressed his concerns regarding the bidding process for the project. Peterson was concerned that the bids would be higher than expected, and with the time frame set on the tax credits, there would be no time to reject the bids and assign a new date for new bids.
District 2 Supervisor Luke Parkes stated his concerns regarding the taxpayers. “When it all said and done, two years down the road or ten years down the road, I, myself, do not want it to come back on the taxpayers of Winston County,” Parkes said.
After a few more minutes of discussion, Parkes made a motion to approve the resolution to the Board of Supervisors of Winston County to authorize the form of and execution of the ground lease and the memorandum of the ground lease (the county leasing the physical property to the Public Benefit Board). District 1 Supervisor Burr Warner seconded the motion, which was passed unanimously by the board.
The signing of the resolution would preview the bidding process to be held on the same day of the meeting at 2 p.m. at City Hall. The signing of the resolution was critical in the bidding process, allowing for decision makers to know where they stand when considering the bids.
The meeting concluded with the board entering into executive session to discuss personnel and litigation matters.
After exiting executive session, the board reported that it had offered the county Purchase Clerk position to an individual, which they would have 30 days to respond to the offer. The position was offered after learning of the upcoming retirement of current Purchase Clerk Crystal Clark.
In other news, the board:
Approved overtime report for November 20, 2015 payroll
Acknowledged MEMA approval of Project 127, Teter’s Building payment of $667,064.74 (was approved on Nov. 13, 2015)
Approved Chancery Clerk Association & Circuit Clerk Association dues for Julie Cunningham and Kim Ming
Approved requested time off for Circuit Clerk employee Melisa Fulton
Approved C-Spire wireless contract extension
The Winston County Board of Supervisors recessed its meeting until November 20, 2015 at the Winston County Courthouse.