By Valerie Baldowski
Movie-making on sound stages in Henry County cleared a major hurdle Tuesday, when the county's board of commissioners voted 4-1 to approve a resolution necessary to get the ball rolling on the project.
Through the vote, the commission expressed its intent to support the creation of a development agreement with Big 5 Enterprises, LLC, and enter into an intergovernmental contract with the Henry County Development Authority -- necessary steps in the process.
District V Commissioner Johnny Basler cast the lone dissenting vote. "My issue was, at the end of the day, if all else fails, the millage rate is going to be a factor in paying the debt," Basler said, after the meeting. "I wish them well. I congratulate them, [but] that's my concern."
Basler said his biggest worry is the pledging of up to one mill of taxpayers' money to secure Big 5 Development's project. Billy Abbate, managing partner of Big 5 Enterprises and Atlanta Film Studios, said, after the meeting, that Basler's vote fell in line with a pattern. "Commissioner Basler's been consistent throughout this process," said Abbate. "We could not get him to a comfort level. He felt like county millage, taxpayer money, should not be placed at risk for this type of project."
Statistically, Big 5's competitors nationally have been financed with public funding, industrial revenue bonds, and grants, Abbate said. "It's important to know that industrial revenue bonds are just a mechanism for financing," he added.
The Tara Field Project will have an initial capital investment in the county of over $30 million, and is estimated to generate 300 direct jobs and 2,000 indirect jobs, according to the development agreement.
Although the commission expressed its intent to support the agreement with is vote on Tuesday, the matter is expected to be brought back for a final vote, within 60 days.
"In talking with the county manager, we think 60 days total is sufficient," said County Attorney LaTonya Wiley.
The proposed development agreement outlines the requirements for the issuance of economic development revenue bonds, to finance the conversion of six existing hangars at Tara Field in Hampton into move-production studios. One provision of the proposed agreement requires an "enforceable, irrevocable letter of credit in the amount of $15 million from a Moody's and Standard and Poor's, minimum, A-rated banking institution guaranteeing a portion of the debt issuance."
The letter of credit shall be renewed at the time specified in the finalized development agreement. "Should the letter of credit not be extended, renewed or replaced with a satisfactory letter of credit of at least equal quality, such letter of credit shall be called upon and the proceeds thereof shall be paid to the county as security for its obligations with respect to the Tara Field bonds," the proposed agreement states.
The contract requires "the developer's irrevocable pledge to make annual payments in lieu of taxes to Henry County throughout the term of the bonds, equal to 100 percent of the amount of county tax liability of all Tara Field property and improvements thereon, as if such property were assessed as though privately held."
It also requires a "clearly stated operating structure showing all building plans, business operations and flow chart of all funds and their applications."
The proposed agreement requires Big 5 Development to provide an initial cash contribution of at least $500,000 to the county, to be used by the county to establish a debt-service reserve fund.
Some of the other commissioners voiced their opinions of the proposed agreement after the meeting. "We put together a plan where, if all fails ... the worst-case scenario, then the debt is covered by rental income from the hangars, and at that point in time, [there will be] almost zero liability to the citizens, and that's why I'm comfortable with it," said District IV Commissioner Reid Bowman.
Bowman was one of the commissioners who voted against Abbate's request in May. He said his vote deeply troubled him afterward. "I didn't sleep for a couple of nights," he added. "We're always concerned about what happens if we vote down something that may very well be something that brings a lot of jobs in the economy to the county. It's a catch 22, how much do we put the county at jeopardy, in order to do that?"
District I Commissioner Warren Holder also weighed in. "I think Reid [Bowman] summed it up when he said, 'This is not the same agreement we started out with.' We did everything we could to assure that taxpayers of Henry County were protected as much as they could be," said Holder.
Holder explained the new details of the financing structure helped change his decision. "When we first started talking in January and February, it was not something that I could support, because there were too many unknowns," he said. "Did we make the right decision? Time will tell if we made the right decision. I can't say we did. I think for the moment, I feel comfortable in the decision that I made."
The updated agreement was presented to the commissioners during their regular meeting on Monday. A representative of Big 5 Development asked for a vote on the resolution during that meeting, but the commission postponed a vote until Tuesday, to give the county attorney and the commission members an opportunity to review the document.
The Henry County Development Authority passed an "Inducement Resolution," involving the Tara Field project during its February meeting, according to the resolution.
During the February meeting, the authority approved an inducement of up to $40 million in industrial development bonds, said Bob White, Development Authority executive director.