The council approved the agreement with a 5-2 vote Wednesday night, with Philip Goldstein and Anthony Coleman opposed. The two council members said they do not believe funding the MRC is the city’s responsibility after the group severed ties with the city.
Yet the majority of the council decided the MRC needs support if it had any hope of staying alive, because it has no full-time employees of its own and is in millions of dollars of debt.
The MRC is a tax-exempt organization formed by the council in 2003. In 2006, it received $2.1 million from the city to be used as a land-buying fund. It used that money to secure a loan from the Bank of North Georgia and began buying up property across from the Hilton Marietta Conference Center. The plan was to turn over that property to a developer, but the MRC has been unsuccessful in that effort.
On June 11, the council voted 7-0 to separate itself from the MRC on the grounds it would be better off settling the $3.9 million in debt it owes to Bank of North Georgia on its own.
But the City Council has had a change of heart.
MRC Chairman Ron Francis said he agrees the group needs the employee support the city has been providing.
“We couldn’t do it without (the city employees),” said Francis, who is also chairman of First Landmark Bank.
While the MRC board wants taxpayer-funded employees to staff its meetings, it has bucked Georgia’s Open Meetings and Open Records laws. Francis ordered an MDJ reporter out of the MRC’s meeting on June 25.
Mayor Steve Tumlin cautioned the group should not move forward too fast in its independence. The mayor made it a condition of the city’s continued support that the group keep its meetings and records open.
Francis said the MRC “had nothing to hide.”
What the city will provide
The agreement states the city will give the MRC up to $30,000 in services every month until December 2017.
Those services will be provided by the two city employees already working with the MRC.
Beth Sessoms, the city’s economic development manager, said she will work with her assistant, Teresa Sabree, to continue to manage the MRC’s finances. They collect rent from people living on properties owned by the MRC, keep records of the property expenses and provide records and information to the MRC board when they request it.
Sessoms has worked with the group as an executive director since 2012, and Sabree has been the group’s redevelopment project manager since 2004.
The city also agreed to pay 17 interest payments toward its bank loan. The amount of those payments varies, but last month’s payment was $13,400, Sessoms said. The bank loan has a total of 36 interest payments, which began in January 2014. Of those, the MRC will pay the first 19 months, and the city agreed to pay the last 17 months leading up to the last payment in December 2017.
After the interest payments are complete at the end of 2017, the MRC will still owe the bank the principal of the loan.
City attorney Doug Haynie said the money the MRC is using to pay its interest payments is also borrowed.
“The current funding that they’re using to pay for the loan payments was originally city funds,” Haynie said.
Feedback from the council
Goldstein and Coleman both agreed it was not the city’s responsibility to continue funding the MRC because it is now separate from the city government.
“It’s not the taxpayer’s responsibility,” Coleman said. “I just don’t think it’s the city’s responsibility to keep the MRC afloat.”
Goldstein strongly emphasized the independence of the MRC.
“The whole point of separating them was to get them out from the city and away from the city, and this puts them right back there at the responsibility of the city,” Goldstein said.
The other five council members and the mayor were all in support of the agreement between the city and the MRC.
“I think we have a duty to fight three more years for them,” Tumlin said.
Councilman Stuart Fleming said he thinks the MRC is valuable but wants to see the group be transparent.
“I think that the role that the MRC plays and has played is critical,” Fleming said. “To have some auxiliary support (from city employees) to do some of the day-to-day blocking and tackling, I think, is critical or we risk (losing the MRC).”
Councilman Johnny Walker said he is hopeful the MRC’s investments will become more valuable with improvements in the economy.
“I feel like the property value will be going up, so it’s the right move for the city to help them now,” Walker said. “I don’t feel like this is putting the city at risk.”
Although the city is offering support for the next three years, Tumlin said the MRC shouldn’t depend on unending city support.
“This is a notice to (the MRC) that we can only go so far for so long,” Tumlin said.