Bad Links?
Other glitches?
Notify Webmaster

City rejects bank offer to settle loan

By JOHN MUNFORD
jmunford@TheCitizenNews.com

Two proposals to settle a $200,000 loan made in 2002 to the Development Authority of Peachtree City have fallen on deaf ears with Peachtree City officials.

According to documents released by the city, Regions Bank declared the loan in default Dec. 13 for non-payment. This timing coincided with the authority losing its revenue stream from operating the city’s tennis center and amphitheater and the coinciding supplement from the city’s hotel-motel tax.

The Regions Bank loan funded the addition of a restaurant to the tennis center and help finish the downstairs area of the center as classroom space so it could be used by Clayton State University.

In a suit filed by Peachtree National Bank, which is now owed over $1 million in loans issued to the authority, the bank claims the city is conspiring to use the Regions Bank settlement offer to illegally transfer the authority’s fixed assets, estimated at $1.6 million, to the city’s possession.

In April, Regions Bank proposed a deal under which would create “a full and final settlement of its claims against Peachtree City.” That first offer was for an immediate payment of $100,000 and handing over 50 percent of the rental payments collected from tenants at the tennis center for five years.

That offer apparently fell on deaf ears, and in May the bank offered to settle the claim in full for a flat $112,000 cash. That letter, from Regions attorney Philip H. Weener of Atlanta, also said, “To the extent transfer documents are required to vest title to the subject personal property, Peachtree City, Georgia, free and clear of any liens of Regions Bank, my office will prepare same.”

City Attorney Ted Meeker confirmed this week that the Peachtree City Council has declined to accept any of the offers from Regions Bank.

In its suit against the city, the authority and the Tourism Association, which currently operates the venues, Peachtree National Bank claims that the city and association are responsible for repaying the over $1 million in loans that the city defaulted on in December.

To keep from setting a precedent of paying the authority’s expenses while it has no other source of income, the city council has agreed to fund a small amount of the expenses for the coming budget year, including the presence of legal counsel.

But on suggestion from Mayor Steve Brown, the authority won’t be using local attorney Mark Oldenburg because he is a creditor who has outstanding unpaid bills for legal services due from the authority.

The authority is set to meet Tuesday night at 6:30 p.m at City Hall in a special called meeting to work on lining up legal counsel, particularly in light of the authority being included as a defendant in the Peachtree National Bank suit.