Homewood Wants Another Hand-Out… $90 Million! On April Fool’s Day, Homewood Retirement Centers, Inc., asked for and received $76 Million from the BoCC—100% financing for their expansion at Crumland Farms. A month later, on May 5, HRC sent a letter asking for $14 Million more; not for any additional construction, but for the same project—an 18% cost over-run in just 34 days! Tomorrow, June 5, the Homewood boys (and “County” bond attorney Jim Cumbie) will be back before the BoCC asking for the extra cash “due to increased costs.” Increased costs? What increased costs—after only a month? How could any serious business miss its original estimates by that much? Or, is this just another guess? Both the approved, April 1 BoCC Resolution (14 – 08) and the June 5 Resolution, provide County economic development bonds for Homewood; “approximately 100 cottages, an 85-unit apartment facility, a community center, an underground parking garage, relating infrastructure and site improvements, and related costs.” Other terms of the deal remain the same: The Bonds are a “limited liability” of the BoCC. M&T Bank will purchase the bonds and administer the loan. Here’s the rub: The County is party to two, separate and distinct transactions. It is responsible for collecting the payments from Homewood and it is responsible for paying the principal and interest to M&T Bank. “Limited liability” means that the County is responsible for any monetary losses due to Homewood’s failure to pay for any reason. There may be other terms to the deal of which we aren’t aware. We have asked for (by PIA request) the other “bond documents” but our request has been unanswered. Under federal bankruptcy law, bondholders have first claim on all assets. From the instant Resolution, it appears that the County will hold no equity in the facility or its assets. The new Resolution contains plenty of additional language, designed to protect the borrower and the bondholder. It says, among other things, “Although this Resolution recognizes that the Bond Documents may not give rise to pecuniary liability of the County, NOTHING CONTAINED IN THIS RESOLUTION OR THE BOND DOCUMENTS SHALL BE CONSTRUED TO PRECLUDE… ANY ACTION OR PROCEEDINGS (other than that element in any action or proceeding involving a claim for monetary damages against the County) in any court or before any governmental body, agency or instrumentality, or otherwise against the County or any of its officers or employees TO ENFORCE THE PROVISIONS OF ANY OF THE BOND DOCUMENTS. (emphasis added) With the exception of the undefined term, “monetary damages,” the meaning of the Resolution and, especially, this section, is crystal clear: The County and its officers may be sued to “enforce the provisions of any of the Bond Documents.” In other words, if Homewood stops paying, the Bank can foreclose on Homewood’s assets and file claim against the County for any shortfall. Additionally, the phrase “monetary damages” might be construed to mean only “punitive” or “compensatory” damages, as opposed to “actual” damages; i.e. the losses due to non-payment of the loan interest and principal. The waste and hypocrisy of the Young “open for business” Board is now more evident than before. Young says he wants to sell our nursing and assisted living homes because they are not a “core government function”. He will sell them at a $25 Million loss to the taxpayers and, here, he will mortgage the County’s future to the tune of $90 Million. He will surrender all government control over the care of the County’s senior citizens and risk another $90 Million in taxpayer assets, with no guarantees or insurance against their complete loss. This isn’t “business”. This is theft. Link to the full BoCC Resolution: https://stevebruns.opendrive/files?Ml81NTMzMzU2NV9qdzlYeg
Posted on: Wed, 04 Jun 2014 18:58:39 +0000
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