PDT Staff Writer
At the Friday meeting of the Southern Ohio Port Authority (SOPA), a resolution was presented that would allow the Scioto County Commissioners to refinance one of its bonds through the Port Authority at a lower interest rate.
“You have before you (SOPA Board) a resolution to authorize the refunding or refinancing of some bonds that my law firm helped the county issue in 1999 for the Shelton Industries project. At the time it was an economic development deal and has since changed a little bit and also what has changed is the bond market,” said Robert Mecklenborg Jr., bond council for Scioto County. “Currently those 1999 bonds are sitting out there at 8.05 percent (interest). The way the bond market is right now, we have found a way to lower the interest rate significantly.”
Mecklenborg told the board it makes sense to make this decision.
“Part of the reason we’re able to get this fantastic interest rate is because were going to have the Southern Ohio Port Authority issue the bonds. Then there will be a loan agreement with the county. Basically the Port Authority issues the bonds and with a loan agreement the county would reimburse the Port Authority for the debt service,” Mecklenborg said.
Todd Book, Chairman of SOPA, said the amount the county would save would depend on what interest rate are able to lock in.
When asked what the bonds where initially issued for, Crabtree has been quoted as saying, “It was for the Shelton (Industries) building, the cosigning of the Shelton building. Over the past eight years that I’ve been here, we’ve tried to issue court orders for the gentleman who was responsible for the debt to come and testify to his current financial status. We have sent certified letters and they have all been undeliverable.”
Crabtree said the county has not been able to do anything else in the way of eliminating the debt.
“We’re stuck with it, so we were trying to minimize something that was a bad deal to begin with,” Crabtree said. “The building is part of the old steel mill property (in New Boston). Unfortunately the loan was never tied directly to any property, it was tied to the business.”
Crabtree said once the business folded, there was nothing to sell to help to pay down the debt.
“We are stuck with a cosigned loan that started in 1998 and will run through 2025,” Crabtree said.
In 2012 Scioto County made a payment of $262,020 towards the debt marked the Grace Street Project Bond.
At the end of some further conversation the SOPA unanimously passed the resolution.
Scioto County Commission Doug Coleman said the action by the Port Authority was one of the last necessary steps to get the interest rate reduced.
Wayne Allen may be reached at 740-353-3101, ext. 228, or email@example.com. For breaking news, follow Wayne on Twitter @WayneallenPDT.