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New lease may add jobs in Midway

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POSTED: October 7, 2008 5:00 a.m.

The Liberty County Development Authority approved the transfer of the lease of Harbin Lumber Co. in the Midway Industrial Park to Vidalia Naval Services during a called meeting last week, a move they hope will mean more jobs.
After discussion and liability of the lease transfer, LCDA board members voted unanimously Monday to a resolution releasing Harbin Lumber Company from its contract obligations after VNS bought out the company.
“VNS is taking over Harbin operations, which is good for the community,” Ron Tolley, the authority’s CEO said. “VNS is anxious to go ahead and do the closing and get the transfer made.”
Harbin had reduced employment due to the decline in residential construction, according to Tolley.
“So it will mean an increase in employment,” he said. “That’s why the board concurred and agreed consent of the project.”
He estimates an increase of about 15 employees.
LCDA leased the property to Harbin in March 1999.
The bonds originally for Harbin were secured by a letter of credit issued by SunTrust bank.
“What we did was agreed to serve as conduit for issuance of those bonds,” Tolley said.
He said serving as a conduit “gives them a lower interest rate but we are not responsible at all for any of the payment,” and the money will “basically flow through,” the LCDA.
Kelly Davis, LCDA attorney, reviewed the lease and said the transfer was “purely a housekeeping matter,” and a “technical formality,” recommending the authority approves the assignment.
“There is no financial risk to the authority,” Davis said. “There is no direct financial liability of any kind.”
However, in light of recent unexpected national downturns, a couple of board members wanted proof that the incoming company was stable and valid.
“They’re very diligent in ensuring that whoever the borrower is, is going to have the financial wherewithal to make good on any default,” Davis said of SunTrust.
Authority member Jeff Arnold requested to see the minority business participation and financial statements of the two companies, just as “a part of our business practices.”
As a “quasi-governmental entity,” Arnold thought LCDA should see the audits, particularly the employment trends of the business.
“It’s just gathering information and shows that I’m concerned about it,” Arnold said. “So that when people ask me questions I can respond appropriately.”
Al Williams agreed.
“We certainly have a responsibility to make sure that responsible employers are going to be here,” Williams said. “And our responsibility is even bigger than the bank.”
“There’s no way I can sit here and anticipate the issue that may arise with a respected (lease assignee),” Arnold said. “I believe we have a responsibility to review each and every action that remotely involves our participation and requires our concurrence.”
The board decided to accept resolution with the elimination of the paragraph that would release the assigning tenant from liability.
“We’re simply holding technical title of the property for purposes for purposes of tax abatement,” Davis explained. “That’s the only reason we were involved in this.”
The LCDA’s monthly meeting is 8:30 a.m. Monday.

 

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