Can a county authority formed to recruit new industry legally use the money from a sale of a building if someone else has been repaying the loan used to build it?

Or must it give the money to the governing body which backed the bond financing used to build the facility?

County Attorney Jayson Phillips said he is working to find what state law requires in such cases after County Commissioner Ron Davis asked him to research the issue during a public hearing on the county budget Tuesday, July 23.

“I have been asked to review that legal issue by the Board of Commissioners and am in the process of conducting that review” Phillips told a reporter Thursday, July 25.

The hearing had evolved into a public debate on whether the Paulding County Industrial Building Authority owed the $4 million it received from the recent sale of its movie studio in Hiram to the Paulding County government.

The county government has been repaying the bond since 2016 after the building authority found it did not have the revenue from assets like the movie studio to make the payments.

Paulding County owes more than $6 million on the original $7.9 million bond, which included $5.5 million to build the studio. The remainder was for construction of a water tower and hangar at Paulding Northwest Atlanta Airport.

Citizen activist Sue Wilkins said the Georgia Constitution required the proceeds be returned to the county government to repay the 2011 bond issue used to build the Atlanta Film Studios Paulding County in Hiram in 2012.

Phillips told commissioners he did not believe it was “appropriate” for the county commission to address the issue of bond repayment during a public hearing called to discuss the 2020 county budget.

Wilkins said Phillips’ response was “a way of avoiding the issue” and was relevant because the county government had to place funding in the 2020 budget to keep making the payments.

“I realize that the (building authority) has visions of all kinds of great economic development,” Wilkins said. “But I have to pay my bills before I buy a new car or a new kitchen, as much as I’d like to have those things.

“I think it’s safe to say the citizens expect, first and foremost, the (building authority) pays their bills and puts that back on the bonds which is where it’s supposed to go.”

Commission Chairman Dave Carmichael said Swirl Films, which bought the Hiram studio, will be a tax paying company.

The sales proceeds will be used to build more buildings to attract more tax paying companies, Carmichael said.

Wilkins said the “end doesn’t justify the means.”

“We have been making payments on bonds that the (building authority) is supposed to be making,” said Wilkins, who led a group which legally challenged privatization of the county’s airport.

“Finally they have some revenue from a sale and they’re going to say, ‘Sorry, taxpayers,’” she said.

Wilkins added that she believed using the money to pay down the $6 million balance, coupled with the taxes from the new company, would make the county “better off.”

Davis said he agreed with Wilkins that the county government needed the money to help repay the bond balance “whether or not” the building authority was legally required to return it.

He asked Carmichael to “lobby” the building authority “on our behalf” for the funding in the chairman’s role as a building authority member.


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