Canton OKs issuing $12M in bonds for assisted living center
August 17, 2013 10:05 PM | 2872 views | 0 0 comments | 16 16 recommendations | email to a friend | print
By Joshua Sharpe

CANTON — Concerns of two council members didn’t stop the Canton City Council voting Thursday to approve the Canton Housing Authority’s plans to issue $12 million in bonds to a private company planning to build an assisted living and memory care facility in the city.

The vote passed 5-0, with Councilman Hooky Huffman absent.

Prior to the vote Thursday night, council members John Beresford and Glen Cummins expressed their worry that the Housing Authority’s move to issue the revenue bonds for the center planned to be built on Mill Road could end up in a similar way to Cherokee County’s costly experience with Jimmy Bobo and Ball Ground Recycling. But City Attorney Bobby Dyer and Mayor Gene Hobgood said there is no call for concern.

Canton Cove Properties, a Delaware-based firm, has recently been given preliminary approval from the Housing Authority to have the bonds issued to help fund the $13.1 million project, which will be a 79-unit assisted living and memory care facility off Reinhardt College Parkway.

Dana Thompson, the attorney for the authority, said last week the Housing Authority will only be the “issuer” of the bonds. Neither the authority nor the city of Canton would be liable for payments on the bonds if the developer were to stop making them, as Bobo did last year, she said. Thompson added that the authority and the City Council are only involved, because state law requires the approval of each in such situations.

But Beresford and Cummins raised many questions during the meeting Thursday to make sure Thompson’s assertions were correct.

Beresford said although the project would be beneficial to the city, he wanted for it to be clear the decision couldn’t come back to bite the city.

“I hate to bring up an old issue here, but we have in the county right now this issue with Bobo,” he said. “I don’t know how (this is) similar or not similar. Are we going to fall into a similar situation?”

Hobgood said the Bobo situation was “a different animal.”

“I can assure you that I won’t be signing any document that has some agreement or contract that obligates the city in case of default,” Hobgood said.

Dyer also said Canton and the Housing Authority won’t be liable if Canton Cove does not make its payments.

“This vote’s not obligating anybody to anything,” Dyer told the council. “This is just approval of the idea really. The Housing Authority can’t agree that anything can impact the city.”

Cummins too had concerns.

“My question is, ‘What is the security behind these bonds?’” Cummins asked. “What security do we have that guarantees that the Housing Authority would receive the money and be able to make the bond principal and interest payments?”

Dyer said the Housing Authority won’t be making the payments.

“It’s a bank making a loan to the developer,” he said. “It may pass through the Housing Authority technically, but the Housing Authority’s not making the payment. The developer is.”

Beresford said he wanted that guaranteed.

“I don’t want to be one of the people that voted ‘yes,’” if Canton Cove defaults and Canton is responsible for payments, he said. “I want to have an ironclad guarantee that we are not going to be looking at a Bobo situation.”

Hobgood said all the council had to do was vote to approve the Housing Authority to issue the bonds with “the stipulation that the city has no obligation.”

Councilman Bob Rush motioned that council approve with Hobgood’s stipulation.

The Housing Authority will consider final approval on issuing the bonds after a public hearing at 2 p.m. Aug. 22 in the conference room at its office at 1400 Oakside Drive.

During the City Council meeting Thursday night, the council also:

• Unanimously approved a street resurfacing contract with Bartow Paving for $115,734 under a Georgia Department of Transportation Local Maintenance Improvement Grant;

• Unanimously approved a contract for $39,284 with Integrated Construction and Nobility Inc. for sidewalk paving on East Marietta Street; and

• Voted unanimously to issue no new permits for road building in the city if the new roads would connect to streets that haven’t been completed. Many streets in the Canton’s subdivisions have been left unfinished by real estate developers.

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