Friday, May 21, 2004

Bank wants $995K from authority, PTC to pay DAPC loans Payments missed for several months, attorney says Peachtree National Bank is demanding that Peachtree City and its development authority pay in full almost a million dollars in debt accrued for construction and operation of the city’s tennis center and amphitheater. Payments on the debt, now tabbed at more than $995,000, have not been made in several months, according to bank attorney Lit Glover. That makes the entities in default on the loan, he added. The authority, which formerly operated the tennis center and amphitheater, no longer has a stream of revenue because the tennis center and amphitheater are currently operated by the newly-created Tourism Association. City spokesperson Betsy Tyler said that the City Council has been briefed on the letter and City Attorney Ted Meeker has responded to the bank denying the bank’s claim. Mark Oldenburg, the development authority’s attorney, said the group has no way to make the payments. “They can’t even say they’ll try to make a payment schedule,” Oldenburg said. The authority understands that its assets are at risk, “but their hands are pretty much tied,” Oldenburg added. The debt, as cited by a letter from the bank to the city and the development authority, is just over $995,000 as of May 4. Glover told authority members Monday evening that he hopes to clear up the matter without heading to court. “We’d like to see if there are ways to resolve this dispute without a legal hassle,” he said. Glover told the authority that he had recently sent a letter to DAPC Chairman Scott Formel about the money that the authority still owes the bank. “It was your standard letter letting you know that money was owed,” Glover said. “No payments have been made in several months, which is why the letter was sent out.” Glover said his presentation was to make sure that both parties had the same facts and to answer any questions that the new authority members had about the situation. He gave the history of the bank’s lending to DAPC that led to the authority owing the big unpaid debt. The story as Glover sees it, which was undisputed by any current authority member, goes like this: In 1993, the city had the Frederick Brown Jr. Amphitheater and dreams of a tennis complex. The DAPC was asked to be the city’s agent to run the amphitheater and to create and run the tennis center. They accepted the challenge and did the job they were requested to do, Glover related. The amphitheater was very successful and the Peachtree City Tennis Center was recognized as one of the Þnest in the country, Glover said. Construction items were submitted and approved and the DAPC borrowed money to pay for the construction items. That money is now in default, Glover said. The DAPC entered these contracts, but in the city’s name, Glover said. In 2001, there was an agreement between the city and the authority that the authority would manage these venues and the city would supplement them with revenues from the hotel/motel tax or a bond issue, Glover said. Though there were various discussions in 2002 and 2003, nothing was implemented and late last year the city created the Peachtree City Tourism Authority to manage the venues, Glover said. Since the DAPC no longer operates either the amphitheater or the tennis center, they have no money to pay the debt and the debt of $1 million went into default. Glover said the bank can prove that all money went into authority accounts and they also have documentation of debt instruments. He also stated that the current authority members are bound by the acts of the previous authority members. Glover also stated that it was his client’s position that the city is also bound in this dispute, though he was told that Oldenburg doesn’t necessarily believe that. Glover said he was not looking for a solution to the dispute Monday night, but he and his client would like to know the authority’s position on the debt and a plan to deal with it soon. Formel told Glover that board members “don’t have the answer yet, but we’ll get back to you.”

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