PE IDA Chips In
Published 4:59 pm Thursday, June 27, 2013
PRINCE EDWARD-What's in a loan?
In December of 2011, the County's IDA met and approved the lending of a $50,000 unsecured loan to the Manor Golf Course and authorized the Chairman of the IDA to sign any and all documents associated with the execution of the loan documents.
The idea was that it would be for the short-term, but time has kept slipping into the future and, as of yet, the funds have not been repaid, as outlined, with 12 percent interest.
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“The whole thing was, it looked like the sale of the golf course was going to be pretty imminent and we all know that the golf course is more valuable as an operating golf course than if it goes dormant because golf courses are very volatile,” Prince Edward Economic Development Director Sharon Carney explained this week. “If their greens and things are not maintained and they are allowed to go back natural you could lose a course altogether.”
Carney brought the request to the IDA, which IDA minutes confirm that the chairman asked Carney “to review a request by John Pringaman, Manager of the Manor Golf Course, to approve a short-term, unsecured loan of $50,000 to cover intermediate expenses (especially an outstanding debt to the IRS) until the golf course can be sold at auction, anticipated for March/April 2012.”
Carney recounted that Pringaman was “one of the people who potentially wanted to put in (an) option to purchase and he told me about it and he told me what he was doing. It was a verbal request; he did not put it in writing and the meeting was the next day.”
Carney, who took the issue to the IDA, noted, “…I made him perfectly clear I don't vote, I'll do the presentation for him and I said but I think you're gonna find that the IDA board is in agreement that they want the golf course to operate so the sale price would be better.”
Carney said she explained to the members what Pringaman had told her, that there was a potential IRS lien to be put on the property and, if that were put on the property, then potentially the sale wouldn't go through.
“…Everyone…that was involved really felt confident the sale was imminent and so the amount that would take care of that issue was $50,000…but they did not want to give any money without it running through the trustee, M&T bank,” Carney recalled.
Other business people were also putting up funds to keep the golf course going.
“My IDA board said, 'Well, we could potentially…advance them, was the term, advance them the $50,000 to be used for the taxes, not for the operation of the golf course.' The taxes were the things that concerned us the most,” Carney said.
That was relayed; it was sent to the benefit of the corporation that was operating the golf course “but for their taxes…and there was no lien placed,” Carney said.
A contribution agreement was signed, according to a document obtained by The Herald. Carney noted that the agreement was looked at by attorneys and that agreement was not done just for the IDA, but was done for other well-known individuals in the community.
The $50,000 from the IDA was sent directly to the bank, she cited.
For economic development, the golf course generates money now, she points out, “and has the potential to be a huge tourism draw if we can just get M & T bank off of center and move forward with the sale and that's where we are.”
When it is sold, the IDA is among the first in line to receive its funds.
Loans are not new for the IDA, which has helped other companies with short-term loans in the past including funds for Hampden-Sydney College's library, the hospital, to Trinity Missions as well as the purchase of equipment for a business.
Ms. Carney would note, “I don't feel that we've lost anything; I just don't feel that we've gotten it back yet.”