We asked over thirty residents, “Do you believe the city should obligate taxpayers for the success or failure of a privately owned, for-profit aquarium on city-owned property at the south end of Riberia Street?”
“There has been no transparency in this project, and you don’t need to ask too many people to learn that,” said managing editor Michael Gold. “Already the city has paid nearly $60,000 to provide appropriate preliminary site planning, engineering, landscape, architecture and other support for the proposed PUB zoning.”
The question we asked, of course, supposes that local taxpayers enjoy any control over what administration and the city commission are going to do. Historic City News has been critical of past private-business-type adventures undertaken by the city that end up benefiting a few individuals at the expense and commitment of public funds — sadly, this project appears to be headed in the same direction.
During Monday night’s regular meeting of the St Augustine City Commission,City Attorney Ronald W. Brown, brought forward a “Letter of Intent” to be considered by the 4 commissioners attending. The letter establishes that the city has obtained a private appraiser to value the land at Riberia Point at about $65,500 per acre.
The letter also establishes some facts that financial and legal advisors to Historic City News find “disturbing, premature, and poorly advised”.
Namely, despite the fact that administration and the commission have already spent considerable money and resources in development of a project that will require a rezoning, does not yet have final financing in place, and still requires public hearings and a vote of the commission in order to accept a yet-to-be-written purchase and sale agreement, yesterday the city manager sent a letter in response to a specific request of the SBA loan underwriter for a federally insured loan to Shawn and Kathy Hiester.
Kristen Tackett, Vice President of Florida First Capital Finance Corporation, informed the city manager in a letter March 17th, that the Small Business Administration kicked the application back to the lender, 121 Financial Credit Union, because it included “nothing like a signed purchase/sale agreement or Letter of Intent”.
Stating what should have been obvious, Tackett explained that even though she did the underwriting of the application, finding for approval, it is the SBA themselves that give final authorization — so, in other words, although she skipped over some required documentation to meet the requirements of the loan program, the SBA caught it.
The pressure for the city to rush this letter, which may or may not even bind the commission, has been brought by the borrowers, their lender, and the loan originator. Regan was told by Tackett that they “have put in a tremendous amount of work to get to this point and getting the SBA authorization is critical to this project” and, now that SBA has identified the incomplete application for funding, they will “have to start over” when they finally get the agreement.
Does the letter give a false appearance of approval that has not yet been legally established for the aquarium project?
By the commission approving the letter to be sent to the borrower’s lender, or their underwriter, is the city participating in a fraudulent application for a federally insured loan that benefits Shawn and Kathy Hiester?
If the SBA will not guarantee the loan, will the Hiesters be able to obtain their own financing or will the city be asked to guarantee their debt?