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Show Centerville Holds On Bond Request By GARY R. BLODGETT CENTERVILLE - A renewed request for industrial bonding of the Parrish Lane shopping plaza in the amount of $2 million was delayed until next Tuesday. THE RENEWED request made several months ago failed to pass council vote last Tuesday when Councilman Dennis Knoles - who abstained from voting last April 7 --abstained --abstained again and the votes of the remaining re-maining two councilmen, Robert Arbuckle and Norman Wright, were not enough to carry. But the debate ov er the bonding issue got hot -- especially between Mayor Golden Allen and the two council members who favored the bonding. "I WAS against the bonding proposal in the beginning, and Im against it now." said Mayor Allen. "I just don't thing the city should get in a position where there is any chance at all of city liability should the bonding not be successful." When the proposal was first made last April 7, the mayor strongly opposed the city's involvement in the matter and said he would refuse to sign the bonds. He then relinquished his seat as mayor to Councilman Council-man Norman Wright and sat in the audience audi-ence (next to this reporter) while the council coun-cil further discussed and approved by a 3-0 vote the bonding proposal. AT THAT time, Walter Gasser, who made the proposal to the council, said Travelers Insurance Company would be the agent (buyer) for the bonds. "But we are no longer considering them as the agent because of a tremendous increase in-crease in interest rates," he told the council. coun-cil. "Interest with that agency has increased in-creased three percent since we last met in April." MR. GASSER explained that the council must approve any buyer of bonds "and if the council doesn't approve then there is no deal and 1 look for someone else." He emphasized that the city is no way obligated for the bonds -- even if the purchaser pur-chaser of the bonds "goes belly up." BUT MAYOR Allen disagrees. "I've been in financing for many years and any time there is a co-signer or partner on a document for financing, that other person or city can be held responsible," the mayor said. "In this case, we (city) are the cosigner and if the buyer is unable to respond re-spond -- or goes belly up - then the city can be held liable." COUNCILMAN Wright challenged the statement by telling the mayor, "that simply simp-ly is not true." Then he added: "My only concern is that the original resolution passed by the council coun-cil (April 7) stipulated that Travelers Insurance Insur-ance would be the purchasing agent and now it's apparent that they are not. However, Howev-er, it still meets my approval as long as the council has the final approval of whoever the purchasing agent is going to be." COUNCILMAN Arbuckle also spoke in favor of he bonding and said there "is absolutely no question about the city being a liable party to this action. It won't be. it can't be," he said. Stipulated in the original agreement between be-tween the council and Mr. Gasser were the following: 1. THE CITY must approve the sale of the bonds and the purchase agreement. 2. The city can not be held liable or in any way responsible for the debt. 3. MR. GASSERS firm is to pay all expenses ex-penses occurred by the city in connection with the preparation and sale of the bonds. 4. The entire amount ($2 million) is to be spent to pay off the debt incurred by the construction of the shopping center. 5. A FINANCIAL statement must be presented pre-sented by Mr. Gasser of his firm's financial status and this statement must be approved by the city attorney. Mayor Allen noted that the request for bonds is not an "inducement bond" as the council was led to believe, but rather a construction bond to pay off construction costs. "WHY SHOULD the city bail out a developer de-veloper by co-signing on a $2 million industrial in-dustrial bond?" he asked. "If this was an industrial bond for an undeveloped project I could feel differently about it." The mayor still insists that he will not sign the bonds and if the council again agrees to the bonding proposal, then Councilman Coun-cilman Wright, who was earlier named mayor-pro-temp for this occasion, will have to be authorized for this purpose. MAYOR ALLEN argued that if Travelers Insurance was the first prospective purchaser pur-chaser of the bonds and now the bonding is being renegotiated, the proposal is a "refinancing "re-financing proposal" and should be considered consi-dered separate from the earlier proposal approved by the council. Mr. Gasser, who was very patient with the council during the heated debate, asked that Travelers Insurance be deleted from the resolution (inducement agreement) and that the council approve the agreement submitted last April. BUT IN a "test vote" of the three council members. Councilman Knoles again abstained ab-stained and the matter is to be placed on the agenda for next Tuesday. |