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PTC makes final
payment on Drake Field, questions unexpected price
By J. FRANK LYNCH
jflynch@theCitizenNews.com
Drake Field is a done deal, though it remains to be seen whether Peachtree
City will be left holding the bill for $160,000 in interest payments and
closing costs associated with the transaction.
Peachtree City officials closed on the last segment of the real estate
transfer Thursday, two years and hundreds of thousands of dollars after
first making a bid to purchase the valuable lakeside property adjacent
to City Hall and the library complex.
The seller: Pathway Communities, formerly known as Peachtree City Development
Corporation.
The intermediary: The Development Authority of Peachtree City.
Total cost to the city: About $1.2 million, significantly more than originally
anticipated after the state reneged on a promise to provide matching funds.
The city made up the shortfall in the 2004 budget, just made official
this month with the passage of a 12.4 percent property tax increase.
“As of today, the city owns it outright,” confirmed City Manager
Bernard McMullen last Thursday, refusing to comment on the rumored $160,000
in outstanding fees still to be accounted for.
“It would be premature to discuss any extra costs affixed to it until
I get the final copies of all the paperwork,” McMullen said. An official
audit on the city’s financial year, just completed Sept. 30, won’t
get under way until after the first of the year, he said, in order to
get outstanding invoices and expenses paid.
City Finance Director Paul Salvatore explained that the closing last week
involved two contracts, one for the transfer of ownership of the tract
from Pathway to the DAPC, and then another for the city to purchase the
property from the DAPC “for the same amount, plus interest.”
“What’s premature to say is how much of that interest did they
accrue,” Salvatore said. “We don’t have all the figures
from the bank, who they borrowed the money from, who fronted it for them
originally to purchase it from Pathway.”
As part of the deal, the city was required to make three payments: An
initial payment of $250,000 two years ago, and then payments of $475,000
last October and again this month.
“Then $160,000 in earnest money was paid up front to secure the deal,”
Salvatore said.
If it goes according to his calculations, Salvatore hopes the city breaks
even. “I had done some rough calculations that from the time the
deal closed until today, it would roughly earn interest at a rate of about
5 percent a year,” he said. “If so, that would be about $15,000
less than what we set aside. But then, that does not include closing costs
and we don’t know still what the terms of the loan are that the development
authority had to pay.”
But from their point of view, both Salvatore and McMullen say the land
belongs to the city, outright.
“I gave the city attorney a couple of checks today to pay for the
balance, $475,000 total between them,” said Salvatore. “That
was our contract with the development authority to buy the land.”
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