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Thursday, November 21, 2019
   
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Banking & Finance

SEDA Holds Unscheduled Meeting to Deal With Bank Downgrades

Will Begin Landfill Work on Hutchinson Island to Protect Wetlands Permits

SBJ Staff


The Savannah Economic Development Authority (SEDA) held a special purpose board meeting Tuesday, Aug. 11 to address the downgrading of the bonds for three area projects that have been backed by SEDA and previously approved.
The bonds for The Telfair Museum of Art and expansion of the Savannah Christian Preparatory School, Inc. project were both being underwritten by SunTrust bank, and the bonds for a capital expansion program at St. Andrews School, backed by Synovus/Sea Island Bank, were all downgraded due to the current financial position of both bank holding companies.
Therefore, the SEDA board had to vote on resolutions that would change the bonds so that the projects can all move forward and bonds can be sold. 
According to attorney Tom Gray, SEDA’s legal counsel, with Gray & Pannell, LLC., the banks will now buy the letter of credit bonds themselves and sell them, rather than the bonds being supported and backed by a federal government program, but it is hoped they will still be tax-exempt so they will remain attractive to investors.  Because the terms of the bonds are being changed, SEDA needed to vote to approve the changes in August, rather than wait for its next regularly scheduled board meeting in September.
“The indentures are being converted to the banks. The banks will take them over,” Gray explained. 
All three entities are 501C 3 not-for-profit corporations, Gray added.  Under the strategy, the two schools and the museum can sell up to $30 million in bonds. Under the former program, only $10 million in funds could have been accesses. 
“This will be beneficial from an interest rate issue,” he added.  The votes were unanimous.
In another new development, the SEDA board voted to move forward on an estimated $260,000 landfill project on Hutchinson Island to insure that it does not lose wetlands permits that will expire in a few years, and decided that the work did not need to be put out to a formal bidding process. 
Because of the depressed economy, SEDA does have any plans to build on Hutchinson, Rick Winger, executive director of SEDA, made clear.  But the wetlands permits will be lost if there is no activity, and the SEDA executive board believes that it was in their best interests to spend money now to insure that the permits stayed in force.
Winger explained that the rules and regulations of the Army Corps of Engineers, which must approve all wetlands area construction permits, change annually. “We don’t want to run into a new rule a few years from now and not be able to get these permits.”
Must of Hutchinson Islands’ perimeter has wetlands areas that SEDA plans to fill as part of the long-range development plans for the island.  SEDA provided green space, and did other activities for which, in exchange, they received the landfill approvals. 
“We’re not building a shopping center now, I assure you, but we need to be sure that we can fill the areas we need to in the future,” he said.
Board member Walter Carson, president of Carson Construction Co., questioned why the work was not being bid.  Ralph Forbes of Thomas & Hutton, who SEDA has hired as the engineering consultant for the project, explained that he had worked with a number of small firms to get the best pricing possible, even though a formal bid process was not conducted.
Winger explained that SEDA would have to spend additional money on engineering specs to develop formal bids, which he recommended against.  The $260,000 contract will be awarded to Woods Landscape, which Carson vouched for in addition to Forbes recommendation and experience with the firm. 
Silt fences will be erected to stop soil from blowing or washing across the roads, Forbes explained, as part of the fill process.
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