The Tuscarawas County Port Authority, born from good intentions, has become a two-headed monster and, after a number of years without much scrutiny, is coming under some fire.
Disclosure: I have friends who sit as directors of the Port Authority and I was party to initial discussions when the idea of having a local building inspector was first proposed. Those discussions involved a number of area contractors, including some whom I consider to be friends.
Those discussions also included a dissent from Dover electrical contractor Bob Horn, who argued against establishing a new government bureaucracy, albeit a "local" one. ("Local" is always better than "state" or "feds," right?)
He thought dealing with the state, which contractors did way back then, wasn't that bad. In other words, if it ain't broken, don't fix it.
Judging from the overwhelming negative view of what is now the East Central Ohio Building Authority, I think Bob Horn probably was right.
But first things first. The Port Authority was formed a decade or so ago after a proposal to construct a golf course and resort in western Tuscarawas County was floated by a developer who needed a funding agent. Long story short here: The development idea collapsed; the Port Authority lived on. Coming much later was the addition of the East Central Ohio Building Authority, which in the chain of command answers to Port Authority Director Harry Eadon.
On Jan. 13, the Times-Reporter reported that the Tuscarawas County commissioners guaranteed $3.3 million on a restructured loan the Port Authority has with JPMorgan Chase & Co., on the old Reeves mill property on Oxford St. in Dover.
That means in case of default, taxpayers will have to cover the obligation.
The Port Authority also used five properties it owns as collateral. Eadon says those properties are worth a total of $1.6 million while the Reeves property is worth $6 million.
The problem with putting values on commercial and industrial properties is that there are loads of them for sale and lease all over this part of Ohio. Old, decaying commercial and industrial properties are tough sells in a good economy let alone during the worst recession since the Great Depression.
In the T-R story, Eadon is quoted as saying, "We have a relationship with Chase that is a good, strong one."
Well, that might be the case, but Chase was playing hardball with the Port Authority when it restructured the loan. Obviously it didn't like what it saw.
I understand why Eadon and the commissioners want to put a good spin on all this. Commissioner Kerry Metzger, the paper said, had high praise for the work of the Port Authority. Well, sure he did. I wouldn't volunteer a negative response on a risky loan deal either. (Well, maybe I would if I didn't care about re-election. Whole different issue there.)
Metzger can't say what I concluded from the story, which is basically this: The Port Authority is in deep trouble because it has to make a $23,117 per month payment on a restructured loan with an adjustable rate that had to be guaranteed by the taxpayers because the bank has big doubts that the Port Authority will be solvent in the long term.
The loan's current rate is 3.15 percent, but will be adjusted annually. The paper didn't say what parameters the bank will use to adjust that rate.
So, the Port Authority has to generate at least $23,117 a month for the loan and additional revenue to cover salaries and expenses. That seems to me to be a tall order. And who will it turn to if it falls short?
Meanwhile, the East Central Ohio Building Authority has irked just about everyone who has been involved in a minor or major construction project involving a commercial building. And you don't have to go farther than ECOBA's website to understand the angst.
The site offers forms and more forms and detailed instructions on how to fill them out. And don't forget about the fees. Want to improve your non-residential property? First you have to pay the government even if you are the government. It's a legal shakedown.
Apparently, Dover City Councilman Greg Bair has heard enough, although he is quick to point out his goal is not to conduct an inquisition and acknowledges that intense scrutiny of construction projects is as much a safety issue as anything else.
Bair, Service Committee chairman, has called a meeting to discuss the Port Authority and its contract with the city as it relates to the East Central Ohio Building Authority. (When I have a date and time, I'll post it here.)
I'll be interested to see who will attend and who will speak out. I suspect few contractors will go on the record with their true feelings about ECOBA because they'll not want to get on its bad side. Perhaps Bob Horn will have a few things to say. Perhaps he'll remind us that he told us so.
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