Nobody does it as well- or as brazenly- as the Jekyll Island Authority and the guy who appointed its members, Governor Sonny Perdue. It almost makes my head explode.
The authority voted on this giveaway via conference call, conveniently out of public view- then trotted out apologists who used disputed statistics to defend the private management of a public asset as "good for the park and the state."
Then came this little nugget- JIA spokesman Eric Garvey said “We are held to certain guidelines and restrictions that a private company does not have. A private business has the flexibility to be more progressive and move forward faster than we do.”
Wait, the JIA think that private companies are exempt from the guidelines and restrictions (some of them annoyingly called laws) that govern the operation of public property- an island owned by the citizens of Georgia? Oh. That explains some things.
Last week I wrote a diary about the secrecy of the whole deal. In the comment section, turtleadvocate pointed out some details highlighted by Senator Jeff Chapman.
Among other things:
LLC stands to make an estimated $100 million in profits from $137 million in time-shares sales. The JIA’s cut of these sales is just 1%, despite the fact that much of the value of the time-shares stems from their oceanfront location on land owned by the people of Georgia and entrusted to the care of the JIA - see Exhibit J-2, point 1e.
Interestingly, just a little over a year ago, the JIA negotiated a 2% rate with another development company. Maybe it's just me but doesn't 2% seem fantastically low? And they gave LLC a 1% deal?
Wilson Smith put it simply:
Linger Longer sells the condominiums and pockets $100,000,000. The State of Georgia gets 1%: $1,000,000.
Heck of a good deal.
There's more: the JIA granted LLC a 10-year rent reduction for its 2 hotels:
The JIA chose to give LLC a deal that calls for zero percent rent in the first year of the hotels’ operation, and then escalates by a mere quarter of a percent for each of the next five years, and then grows to 3.5 percent in the tenth year of the lease.
My, must be nice to be a developer these days... 0% rent on oceanfront property for a whole year! What else could you ask for?
No rent at all is paid to the JIA for the entire 10 years for food, beverage and banquet sales at the 2 hotels, which adds up to a huge amount of money and further fattens LLC’s profits at the public’s expense.
Ask and ye shall receive.
Mercer Reynolds (LLC's owner) has proven from time to time that he's real good at getting other people's money. He's probably good enough to talk the JIA into paying him! Oh wait...
The JIA has agreed to pay its private partner a monthly fee of $45,000 for 30 consecutive months to participate in “the overall revitalization development effort.”
Rahahahaha.
The Brunswick News (sorry, no link available), which may as well re-name themselves the LLC/JIA Daily, recently ran an article in which the JIA defended part of the contract which will allow LLC to manage key attractions on the island (read: those that make money).
Under the private-public lease agreement, the authority states that Linger Longer has the ability to present a proposal to the authority board to manage specific properties on the island through partnering development proposals...
The agreement also works in reverse, Hooks said, allowing the authority to propose to Linger Longer to acquire specific properties. “We have the ability to say, ‘we’d like you take over this property’,” Garvey said. “The good news for the public is that the board has the ability to reject or agree to these proposals, to set policy and be in control. There is a definite system of checks and balances."
You know, since they've driven such a tough bargain with LLC so far.
Astonishingly, Hooks then goes on to say that having a private company run publicly owned attractions (property) is a good thing because it would "give that property more leeway as far as business practices."
And we've all seen how well that's worked out lately. Plus, developers and the JIA are famous for their openess in disclosing "business practices"- like how they openly invited Jeff Chapman to discuss the LLC contract by emailing his office at 4:00 on the Friday after Thanksgiving.
One more quote by Wilson sums it all up nicely:
So what is the beef? It is a lot of things, but mainly it is about bad government as evidenced by the arrogant shenanigans of the Jekyll Island Authority that doesn’t even make an effort to appear concerned about what the people (People: Everyone other than land developers and others who would personally profit from Jekyll.) want.