County remains obligated to PID loan payments
Wednesday, April 23, 2014 1:00 PM
Madison County will remain obligated to make payments on a $10 million Parkway South Public Improvement District loan in accordance with a contribution agreement.
Trustmark, which made the loan, is, on behalf of Parkway South, repaying Madison County over $258,000 to keep the contribution agreement active, according to Board Attorney Mike Espy.
After landowners defaulted, Madison County, to date, has paid over $950,000 on Parkway South, including payments in November 2012, May 2013, and November 2013.
The contribution agreement states that if the county is not repaid within two years it would no longer be obligated to make payments.
Espy said the two-year window would have ended on May 11.
"[Trustmark] doesn't want the bond to default," Espy said. "They will make a payment on behalf of Parkway South. We have to take it. We don't have a choice."
The county will in turn have to make a new payment of approximately $300,000 on the Parkway South debt.
The two-year window will end again in November 2014 if Madison County isn't repaid $186,000.
Parkway South initially involved only two landowners, Dick Ambrosino and Dr. S. L. Sethi. Ambrosino's land is divided into multiple LLCs.
The PID originated from a plan more than a decade ago to contsruct the Galleria Parkway, a 4.3-mile boulevard paralleling I-55 connecting Madison to Gluckstadt. Parkway South comprised one-third of the landowners along the road.
Park South is smaller than Parkway East, which comprised two-thirds of the Galleria Parkway landowners. Over half of the 14 landowners on Parkway East defaulted on payments.
A similar contribution agreement with the county has resulted in a lawsuit with the holder of the bonds, Radian Assurance.
The county says the two-year window for repayment ended and taxpayers are no longer on the hook for payments. That obligation is what's being litigated in federal court.
The roadway was completed and opened in March 2009.
Madison County obligated taxpayers to cover loan payments on the PIDs.
Parkway East issued $27.7 million in bonds in 2004 through Hancock Bank and another $3 million in 2008 through BankFirst.
Parkway South was not a public bond like Parkway East, but supervisors committed taxpayers to cover shortfalls.
Parkway South borrowed $10 million from Trustmark.