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In the ongoing struggle to pull the pieces together for the purchase of Taylor Business Park, also known as the Roy Palmer Business Park, by the Town of Taylor. Mayor David Smith called a special meeting on Jan. 17 for the town council to vote on a resolution approving Section Four of the formal lease purchase agreement with Zions Bancorporation for the purchase of 147 acres of vacant land.
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The resolution passed in a six to one vote giving the town the option of being reimbursed for the $290,000 already spent on the park purchase by rolling that amount along with the remaining $460,000 into a loan for the total agreed upon price of $750,000 at a future date.
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Smith, Vice Mayor Carl Cosper and councilmen Shawn Palmer, Jason Brubaker, Kyle Peck and Bill Ballard voted in favor, while Councilman Fay Hatch voted against.
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An email notifying the council of the meeting had been sent out just 25 hours earlier containing a note from Town Manager Gus Lundberg stating, “I apologize for the late notice, but the mayor has called a special meeting for tomorrow night at 6 p.m. This afternoon I received the loan documents from the bank in regards to the land purchase. In order to be reimbursed by the loan for our initial payment of $290,000 action must be taken within 60 days to be eligible for reimbursement. The end of the 60 day period is Monday.”
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At the beginning of the meeting, Smith noted that there was not a call to the public on the agenda, “but we do have a call to the public request and since he has written a request, I am going to allow Dr. Shumway to come and visit with the council.”
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Dr. Don Shumway began by saying, “No one wants to see the business park succeed more than I do. I come at this as a property owner in Taylor and as a resident and an investor. I would like to jump right in and say that in our society, which is litigious, there are some really good reasons why I would encourage the council to back off and slow down on this business park.”
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Shumway then guided the council through the general plan of the town and the town codes, noting that there were no provisions within those plans or codes for something like the business park.
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“I know when you go to the town statements and provisions, it says the number three goal is to expand infrastructure and services and I understand that is exactly what you guys are trying to do,” continued Shumway. Then he asked, “Who is going to be the contractor over the business park? If the town council is pushing and promoting this, who is going to be the oversight committee as to how much money it costs and is spent?”
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Shumway paused, “I see some huge areas of liability and if I were sitting on the council, there is no way I would vote to have this move forward in the matter as it is. This is not a great time to go throw money at building a business park. If I was an investor and I was going to buy a property and I thought property prices were going to take a dive, which is what I think they are going to do, I would wait and buy six months to a year from now when I could get it for half or a third of the cost or from foreclosure.”
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Shumway concluded, “You are the oversight for the community and with you guys pushing this, who is looking out for the average citizen?”
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After Shumway sat down Smith said, “We have all had the opportunity to visit with both sides of this discussion. We have all had the opportunity to look at the things we need to look at to move forward on this one way or the other.”
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In a recap of events Lundberg shared how the council had authorized a purchase agreement, which was not finalized at the Nov. 1 council meeting. “While the agreement was not finalized, I laid out the terms of what that agreement looked like,” continued Lundberg. “It was the purchase of 147 acres for $750,000 and that was carried out in a two-step transaction, the first being a payment of cash for $290,000 with the remainder of the funds to come at a later date before final closing.”
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On Nov. 21, the first step was completed when the Town paid Hatch Development LLC., $290,000.
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From that date on, the Town had 60 days to obtain the loan funding and complete the lease/purchase agreement, or they had to create a resolution that would enable future funding to incorporate the $290,000 already spent.
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At the Dec. 6 council meeting, Lundberg planned to bring the loan terms for financing the rest of the transaction for the lease/purchase of the business park.
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Unfortunately, the afternoon of Dec. 6, Lundberg received an email from the lender stating they had experienced some unexpected delays in preparing those documents and they need additional time.
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“We did not take any action on that as we did not have any loan documents to consider at that point,” stated Lundberg. “Last week I still did not have the loan documents, so we did not hold the meeting last week.”
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However, last Thursday, Jan. 10, Lundberg received a call from the bank telling him that they were close to having the documents ready. On the afternoon of Jan. 17, Lundberg received the documents, which he included in the email announcing the special meeting.
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The potential financing offered by Zions Bancorporation is a 15-year loan at 3.26 percent with an annual payment each year of $64,012. The finance amount would be for the entire $750,000 with a total interest payment of $210,185, bringing the total amount paid for the business park this time to $960,185.
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Within the loan documents was a resolution authorizing the execution of the lease/purchase. Section Four of the resolution explained how the town, by adopting this resolution, can seek reimbursement for expenditures incurred in the last 60 days.
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The actual verbiage of Section Four allows the advancing of monies from the general fund to provide interim financing for the acquisition and/or construction of the leased property, with an estimated maximum principal amount of $750,000 and the reimbursement of all or a portion of the advance from the proceeds of the lease/purchase agreement. In the agreement it states, “such reimbursement shall be evidenced by an allocation made by or on behalf of the town in writing not later than 18 months after the later of the date the original expenditure is paid; or the date the Leased Property is ‘placed in service’ or abandoned; but in no event more than three years after the original expenditure is paid.”
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Lundberg went on to explain, “Before our meeting tonight and throughout the day I have been in communication with our town attorney regarding the loan document. On top of this resolution, a legal certification is required to fully execute this loan. At this point, our attorney is not ready to sign that as he has not had enough time to review it.”
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Lundberg also added that an extended title policy would be required, which in turn requires an out-to-survey for the title policy, before a closing on the lease/purchase for the business park can occur.
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In summation, Lundberg told the council, “If you do want to proceed with financing this transaction, I believe we should keep the window open and get reimbursed for our first payment of $290,000 by at least passing this resolution with section four at minimum.”
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Lundberg further noted that the first three sections of the resolution authorize a town official to execute the agreement. “I would like to come back to you at a later date with our town attorney’s blessing on an approved agreement and have you consider that. Nothing is set in stone with financing at this point.”
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Smith followed up saying, “Our main goal started out to get flood zoning from FEMA (Federal Emergency Management Agency), which involved our business park. It then turned into an opportunity to buy our park. I feel very confident in the purchase of this park. I am looking at the big picture and the best interest for the Town of Taylor.”
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Palmer took a moment to share, “I have looked at both sides extensively. I am in favor of this for a lot of reasons but again the flood control thing is a really big thing to me. We are sitting in a flood plain right here. This building (town hall) is in a flood plain; our maintenance yard is in a flood plain; our fire and ambulance is in a flood plain; our park is in a flood plain. Some residents have terrible problems with flooding. While $750,000 is a lot of money, the flood control is probably pretty close to worth it just for that purpose.”
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Palmer went on to comment regarding Shumway’s concerns. “Don mentioned the risks, but right now the flooding and improvements are also risks and things that will be set in the right direction. As far as oversight and direction, I am confident that will be taken care of by our excellent town manager, who is very intelligent and very involved.”
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Brubaker also took a moment to share, “When this was first brought up among the council and our council discussed this, we all listened and made our best decision. We have had multiple opportunities to listen and make our best decision. I don’t know the future, however, I was grateful for the information that Alice Franco provided me. It really made me devote time to listen more. In her sharing that information, I also went to the other sources that I believe are correct and true sources and I asked pointed questions. Each one of my questions had a good answer in a way that is just and true; and all my questions have been answered.”
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No other council members spoke. The council voted to approve the resolution with section four only and the meeting was adjourned.
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In other business, the council also approved the December 2018 check register for $412,173.
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