By RICK KRON
Leader staff writer
Sherwood needs to have $1 million ready for a down payment and the mechanism in place to fund up to another $5 million within the next 45 days to pay for the condemnation of the 106-acre golf course.
That’s the recommendation attorney Tim Grooms, who is working with the city to purchase the defunct golf course, gave to aldermen and other officials at a workshop Tuesday afternoon at the Bill Harmon Recreation Center.
Mayor Virginia Hillman said that the down payment suggestion was a lot of money. “That’s half of our reserve fund,” she said, adding, “That’s a lot if we don’t have much.”
The workshop was called by City Attorney Stephen Cobb to update the council on four major lawsuits or litigations that the city is involved in.
A $5 million bond issue, according to attorney John Bryant, one of two attorneys working on the bond issue, would cost the city about $500,000 a year for 20 years.
On top of that is a possible damage payment the city may have to make to the golf course owners if a federal lawsuit is decided in favor of the owners, and the money needed to make improvements to the acreage.
Alderman Becki Vassar suggested using the land to build a water park similar to Jacksonville’s Splash Zone, which cost about $2.5 million to build four years ago.
Grooms said the city’s public facilities board needs to meet as soon as possible to initiate the bond-issue request to pay for the property.
“Then a public hearing needs to be scheduled with ten days’ notice, and then the city council needs to approve the bond issue, including the down payment and monthly payments,” Grooms said, adding that all of that should be in place before the condemnation issue is decided in a jury trial late next month.
Under the procedures that the city used to condemn the property, the fair market value that the city will pay the owners, Club Properties, must be decided by a jury trial. That trial is set for July 24-25 and July 30-July 31. The first two days are for legal wrangling, and the last two days will be the actual jury trial to determine the fair market value.
Appraisals range from just under $3 million to more than $5 million. Grooms felt that the lower appraisal was closer to the truth, but that the city had to be prepared to pay the higher amount.
And actually, the city has the option after the fair market value is announced to back away from the condemnation and let the current owners keep the property. “It is certain that the owners would sue for damages if we did that,” another attorney with Grooms firm said.
Grooms said the city could get by with less than a $1 million down payment, but a smaller payment could negatively affect the rate and terms of the bond issue. “The equity credit markets are as tight as I’ve seen them in my lifetime. A 20 percent down will help with rate and terms,” he said.
Bond attorney Joseph Gregory told the workshop attendees that the city’s public facilities board would actually buy the golf course land through the bond issue and lease it to the city. The amount of the lease should cover the bond payment, Gregory said.
The city is also in a lawsuit with First Electric and North Little Rock over the whether or not the city has the right to pick its own electric provider.
A final order is expected from Circuit Judge Tim Fox’s office soon stating that the city may choose its own electric provider, but in going with First Electric, the city breached its contract with North Little Rock and the city needs to return $2 million in franchise fees back to North Little Rock.
North Little Rock is also holding an additional $600,000 in franchise fees per the court order.
Once the final order is issued, Sherwood has the option to appeal or work out a settlement with North Little Rock.
