Area developers and business people who invested millions in projects ahead of the now defunct fifth brigade got some bad news this week.
The Office of Economic Adjustment, under the Department of Defense, will distribute $40 million in assistance funds only to public entities that had prepared for the arrival of an additional brigade at Fort Stewart, a move that was canceled last year.
The decision is unwelcome to private developers who say they were also hurt when the Army asked for help preparing for the flood of new troops.
“(Some of) my projects are in foreclosure,” Clay Sikes said. “That’s the beginning of the dominos. There will be many others to follow.”
The developer said his Independence project in Hinesville was to have provided housing for some of the additional 10,000 soldiers community leaders were told to expect.
The public entities, members of the Fort Stewart Growth Management Partnership, include Liberty, Bryan, Long and Tattnall counties, and the cities, school districts and development authorities located in these four counties, confirmed Jeff Ricketson, FSGMP director.
He said partnership representatives were told by OEA on Monday that, “the law reads the assistance funds are only for public entities.”
He said his office will send out information about the application process to those cities, counties, development authorities and school boards eligible to receive reimbursement from the federal government. Application for funds would have to be made directly between public entities and OEA, Ricketson emphasized.
“The partnership won’t have any role in that (distribution of funds.) We’re simply helping to communicate the application process to the eligible public entities,” he said.
“OEA is anxious to expedite the money to the affected communities,” Ricketson continued. “The money has to be allocated by the end of the (fiscal) budget year, by September 2010. But, I think it will happen much sooner than that.”
The partnership director said local public entities will have to substantiate the expenditures they made in anticipation of the brigade.
“It won’t be as simple as making a claim,” he explained.
Ricketson said counties, cities, development authorities and school districts will have to document in detail the projects they spent money on between December 2007, when the brigade was announced, and June 2009, when the brigade was cancelled.
Hinesville Mayor Jim Thomas announced OEA’s decision Thursday at a city council meeting. Thomas said Hinesville will apply for between $26-$28 million in compensation for a wastewater treatment plant and other costs associated with its construction. In addition, Hinesville will ask to be reimbursed for installing water and sewer lines, the mayor said.
“OEA decides how much we get,” Thomas told council members. “Obviously, as a city we put in more than (some of) the other entities.”
Although public officials seem relieved to be receiving reimbursement for investing in infrastructure, private developers are bitter over being left out, and not just Sikes.
“I’m going to wind up losing projects too,” builder Johnny Carnes said.” I’m going to wind up going under.”
Carnes said his company, Carnes Construction, built townhomes and condos in anticipation of serving between 4,500 and 4,800 soldiers and their families.
He said about half of his townhomes – part of Governor’s Quarters off Airport Road in Hinesville – are sitting empty today.
Carnes said he has lost about $16 million on his troop-ready projects. Based in Richmond Hill, the builder has been in business for 30 years. He came to Hinesville three years ago when the word was spread a fifth brigade was due to arrive.
The government’s decision to distribute assistance funds only to public entities makes his financial burden even heavier, he said.
“It was just like someone cutting the water faucet off. We can’t get anything,” Carnes said. “The public sector has invested like $38 million – but the private sector has invested over $100 million.”
As for Army and government officials denying they had unequivocally promised a fifth brigade would come, Carnes said, “That’s just a bold-faced lie.”
The builder said he is hanging on to the hope that the local economy will improve with the return of the 3rd Infantry Division from its current Iraq deployment.
Sikes, like Carnes, has been hard hit financially.
“My total amount affected by this is $20 million,” he said
The owner of The Sikes Group has been in real estate since 1971. He said he and other business people were in a period of “contraction” three years ago – realizing the economy was slowing – and would not have invested as much as they did to prepare for a promised fifth brigade had the Army not made “unparalleled assurances” that troop expansion was certain.
“In all my years in real estate, I had never seen the military come off post and meet with banks and developers and give them the assurances they did,” Sikes said.
The developer claims the assistance funds were initially intended to ease the burden of private entities, as well as public entities.
“It was clearly the intent of that appropriation to help those affected the most,” he said.
But, with U.S. Rep. John Murtha’s “untimely death,” that intent was not realized, Sikes said. Murtha, a Democrat from Pennsylvania, served as chairman of the House Appropriations Defense Subcommittee. He died on Feb. 8.
Sikes said he hopes the decision is not final.
“We continue to make our case with the Army. My hope is in God; not in man. That’s where my hopes are planted. If not, we’ll just do the best we can.”
Sikes added, “for every Johnny Carnes and Clay Sikes there are many more smaller businesses who will lose from this unfortunate situation, not with-standing the additional $500 million payroll (a fifth brigade) would have brought to our town.”
The Office of Economic Adjustment, under the Department of Defense, will distribute $40 million in assistance funds only to public entities that had prepared for the arrival of an additional brigade at Fort Stewart, a move that was canceled last year.
The decision is unwelcome to private developers who say they were also hurt when the Army asked for help preparing for the flood of new troops.
“(Some of) my projects are in foreclosure,” Clay Sikes said. “That’s the beginning of the dominos. There will be many others to follow.”
The developer said his Independence project in Hinesville was to have provided housing for some of the additional 10,000 soldiers community leaders were told to expect.
The public entities, members of the Fort Stewart Growth Management Partnership, include Liberty, Bryan, Long and Tattnall counties, and the cities, school districts and development authorities located in these four counties, confirmed Jeff Ricketson, FSGMP director.
He said partnership representatives were told by OEA on Monday that, “the law reads the assistance funds are only for public entities.”
He said his office will send out information about the application process to those cities, counties, development authorities and school boards eligible to receive reimbursement from the federal government. Application for funds would have to be made directly between public entities and OEA, Ricketson emphasized.
“The partnership won’t have any role in that (distribution of funds.) We’re simply helping to communicate the application process to the eligible public entities,” he said.
“OEA is anxious to expedite the money to the affected communities,” Ricketson continued. “The money has to be allocated by the end of the (fiscal) budget year, by September 2010. But, I think it will happen much sooner than that.”
The partnership director said local public entities will have to substantiate the expenditures they made in anticipation of the brigade.
“It won’t be as simple as making a claim,” he explained.
Ricketson said counties, cities, development authorities and school districts will have to document in detail the projects they spent money on between December 2007, when the brigade was announced, and June 2009, when the brigade was cancelled.
Hinesville Mayor Jim Thomas announced OEA’s decision Thursday at a city council meeting. Thomas said Hinesville will apply for between $26-$28 million in compensation for a wastewater treatment plant and other costs associated with its construction. In addition, Hinesville will ask to be reimbursed for installing water and sewer lines, the mayor said.
“OEA decides how much we get,” Thomas told council members. “Obviously, as a city we put in more than (some of) the other entities.”
Although public officials seem relieved to be receiving reimbursement for investing in infrastructure, private developers are bitter over being left out, and not just Sikes.
“I’m going to wind up losing projects too,” builder Johnny Carnes said.” I’m going to wind up going under.”
Carnes said his company, Carnes Construction, built townhomes and condos in anticipation of serving between 4,500 and 4,800 soldiers and their families.
He said about half of his townhomes – part of Governor’s Quarters off Airport Road in Hinesville – are sitting empty today.
Carnes said he has lost about $16 million on his troop-ready projects. Based in Richmond Hill, the builder has been in business for 30 years. He came to Hinesville three years ago when the word was spread a fifth brigade was due to arrive.
The government’s decision to distribute assistance funds only to public entities makes his financial burden even heavier, he said.
“It was just like someone cutting the water faucet off. We can’t get anything,” Carnes said. “The public sector has invested like $38 million – but the private sector has invested over $100 million.”
As for Army and government officials denying they had unequivocally promised a fifth brigade would come, Carnes said, “That’s just a bold-faced lie.”
The builder said he is hanging on to the hope that the local economy will improve with the return of the 3rd Infantry Division from its current Iraq deployment.
Sikes, like Carnes, has been hard hit financially.
“My total amount affected by this is $20 million,” he said
The owner of The Sikes Group has been in real estate since 1971. He said he and other business people were in a period of “contraction” three years ago – realizing the economy was slowing – and would not have invested as much as they did to prepare for a promised fifth brigade had the Army not made “unparalleled assurances” that troop expansion was certain.
“In all my years in real estate, I had never seen the military come off post and meet with banks and developers and give them the assurances they did,” Sikes said.
The developer claims the assistance funds were initially intended to ease the burden of private entities, as well as public entities.
“It was clearly the intent of that appropriation to help those affected the most,” he said.
But, with U.S. Rep. John Murtha’s “untimely death,” that intent was not realized, Sikes said. Murtha, a Democrat from Pennsylvania, served as chairman of the House Appropriations Defense Subcommittee. He died on Feb. 8.
Sikes said he hopes the decision is not final.
“We continue to make our case with the Army. My hope is in God; not in man. That’s where my hopes are planted. If not, we’ll just do the best we can.”
Sikes added, “for every Johnny Carnes and Clay Sikes there are many more smaller businesses who will lose from this unfortunate situation, not with-standing the additional $500 million payroll (a fifth brigade) would have brought to our town.”