EAST LIVERPOOL - The first step in finalizing the city's purchase of the former Riverview Florist property was taken Monday evening by the Community Improvement Corporation (CIC) finance committee, which agreed to recommend its board of trustees approves a complex loan process to help seal the deal.
The city had agreed to purchase the nearly 78 acres - also known as the Bosco property -for $1.3 million, and to date, $100,000 of that has been paid with a $20,000 up-front payment and monthly payments of $3,000.
The remaining $1.2 million is due in August, and officials took steps Monday to make that payment a reality.
Service-Safety Director Ryan Estell presented a plan to the CIC's finance committee that would entail using $650,000 the city has from mineral leasing, a $455,000 interest-only loan secured by the CIC from 1st National Community Bank and $95,000 from the CIC which it has received from a mineral rights lease for the McCoy Avenue soccer field property.
In addition, the plan calls for the CIC establishing an interest reserve account totaling $54,600 using proceeds from the mineral rights fund to pay the interest on the bank loan for 24 months.
The city, in turn, will repay the two loans and the $54,600 with additional mineral lease monies expected from the Riverview property and about $1 million that will be repaid to the city by its own water department. That $1 million was loaned by the city to the water department in 2005-2006 for a water line improvement project.
Prior to the CIC finance meeting, Estell said it is assumed the water department will have the revenue to repay the $1 million loan to the city from settlement funds from a lawsuit filed against the Buckeye Water District.
"They always said they'd like to repay that loan when they had the means," Estell said, saying, "They expect to have it within the next two years."
He said the Board of Public Utilities is expected to approve that repayment at its next meeting.
Meanwhile, some members of the CIC finance committee expressed concerns about this complex plan, with Don Heldman asking whether or not the group is "out of our element here" by approving such large commitments.
"I'm concerned about this. Things fall through; things take longer (than anticipated). Are we bonded for that much?" Heldman.
Law Director Charles Payne assured him that it is the CIC, not members personally, making this commitment and which stands liable.
Asked why the city doesn't secure the loans on its own, Estell said the bank can only loan up to a certain amount to the city and it was the bank's suggestion to go this route, more or less using the CIC as a conduit.
He pointed out the city has never defaulted on an agreement, saying, "We take contracts and agreements seriously."
CIC President Sam Scafide agreed that the corporation has never made such a large commitment but it's purpose is to "be a tool for the city" and to "do things the city can't do."
Member and Councilman Sherrie Curtis pointed out, "This property is the best chance the city has for economic development. To turn it down will be very short-sighted."
Member Al Fricano called it "one of the best deals the city ever made," considering the property has been annexed into the city and now mineral lease revenue will pay for about half its cost.
Member Fred Kane said the numbers on paper indicate a loss considering the interest being paid, but Estell assured him the CIC actually stands to earn a small amount from loaning the city money.
Nonetheless, Kane voted against recommending the board of trustees approve the $455,000 loan, although he supported recommending the smaller loan and the escrow account.
The CIC's board of trustees will meet at 5:15 p.m. Wednesday to consider the recommendation. If the board approves it, it will then move to City Council, which will meet in special session at 7 p.m. Monday, with a streets/lands committee meeting to address the issue scheduled for 6:45 p.m.