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Cedar Key Community Redevelopment Association member Gene Hodges had one last try at getting his fellow members to see reason, as he saw it, before the CRA adopted a resolution to accept a bid from SunTrust Bank to be the lender on the CRA's long-awaited, long-debated $9.2 million redevelopment revenue bond issue.
Hodges has two arguments against the bond issue, which he has presented vigorously at every meeting with the bond on the agenda. The first of these is that the economy is not as robust as it was when the CRA first developed the plan to issue the bond. The second is that, in the event that CRA funds dry up entirely, depending on the whim of the Florida Legislature, Hodges fears that the lender will pursue not just the CRA, which is the rightful debtor, but also the City of Cedar Key and possibly even individual members, in order to satisfy the debt.
The bond money is to be used, among other things, to retire some $2.5 million in debts incurred by the city, to assist the Water and Sewer District in important upgrades to services in the city and in unincorporated contiguous areas, and to improve the roads.
Two weeks ago, the CRA received several bids from competing lenders including Wachovia, BB&T, SunTrust, Capitol City and Bank of America. Southeastern Investment Securities, represented at the meetings by Richard T. Wagner, recommended SunTrust's bid, with an interest rate of 3.95 percent and flexible prepayment options as the best bid offered.
To assuage Hodges' doubts one last time, bond counsel Robert Friedman of Bryant, Miller and Olive read to him the sections in the CRA's own resolution which asserted that the certifying judge and the lender both agreed that the note could only be repaid out of the Tax Increment Fund (TIF), and neither the city nor individual officers or employees could be held liable for repayment in the event of default.
Scott Ricker, First Vice President of SunTrust Bank, also reassured Hodges that he "was comfortable enough with the creditworthiness of Cedar Key's CRA to issue the note."
Commissioner Sue Colson said she felt that the CRA and people of Cedar Key had put too much time and effort into determining the necessary repairs and improvements to just put a stop to the project. She believed that the CRA should at least get to work on the most pressing projects, then evaluate later whether to scale back other projects in favor of prepaying on the note.
Hodges wanted to know if it would be possible to borrow less than the full $9.2 million, and Ricker said it was, or else the CRA could borrow the full amount, and invest any money not needed immediately. Hodges said he thought it would be better not to borrow the full amount, "because if we get the whole thing, we'll spend it."
Over his objection, the CRA passed the resolution 4-1, selecting SunTrust as the lender for the note.
In other action, the CRA received six bids last Friday for the reconstruction of the inside boat ramp at the Cedar Key City Marine, ranging from Commercial Industry Corp's high bid of $177,450 down to Taylor Construction and Development's low bid of $68,600. Taylor Construction was awarded the contract.