Peachtree City Councilman Eric Imker is hopeful that the city can devote some budgetary savings toward paying off a loan or two which have less than favorable terms for the city.
At his citizen budget meeting last weekend, Imker specifically cited a 2002 loan the city council took out to purchase a tract of land at the corner of MacDuff Parkway and Ga. Highway 54 west. The 5.1 acre tract was deemed necessary for the proposed “gateway” cart path bridge over Ga. Highway 54 near the city limit.
The $600,000 loan has an interest rate of 6.12 percent and the city stands to pay another $522,000 on the loan in the next six years, spread out at $87,000 each year. The city has $447,000 in outstanding principal on the loan.
Imker called the loan “a horrible, horrible deal.”
“We got the worst deal in the history of deals,” Imker said of the loan. “… It was swampland and we paid commercial prices for the swampland. It was the worst deal.”
Part of the city council’s rationale at the time for purchasing the property was also to prevent commercial development from occurring near the entrance to the Wynnmeade subdivision. Then-Mayor Steve Brown noted that the developer wanted to build a QuikTrip gas station on the property, which Wynnmeade residents didn’t want.
Ironically, the bridge is seen now in part as being a potential shot in the arm for a shopping center on the south side of Hwy. 54: the Shoppes at the Village Piazza.
The city purchased the property from developer Marvin Isenberg.
The gateway bridge has remained on the drawing board due to lack of funds. It has been put on a list of projects for potential funding through a regional sales tax that will be voted on in July 2012, but even if it makes the funding list, it may go undone if the regional vote is shot down.
The city has also petitioned the Fayette County Commission to release funds from the 2003 countywide transportation sales tax.
Imker also cited a 2006 bond for the tennis center, which the city’s development authority previously entered, as another candidate for potential payoff to save the city interest payments. That bond has an interest rate of 5.93 percent and the city has six years of $140,000 payments remaining on the loan, which has an outstanding principal of $705,000.
As always, whether the loan payoffs have any advantages depends on the penalties for prepayment, so it remains to be seen if either are feasible at this juncture, Imker said.
