If you live in Georgia, how about calling up your state Senator and Representative. Ask them why the state, which is in pretty dire financial straits, should take out $50 million in bonds for Jekyll Island State Park when the private developer who just signed a contract to develop the island stands to make a 300% profit on a project built on land you own.
Ask them why you, as a citizen, should be responsible for two bonds that will eventually cost around $100 million to repay, when Linger Longer Communities will get a projected $163 million gross ($120 profit) for building timeshares on your beachfront property... and the Jekyll Island Authority will get a measly $1.63 million. 99% for developers, 1% for the state.
And while you're at it, ask them who the hell appointed people that would negotiate such a crappy deal. And then ask them who would take out not one but two bonds to "entice" that developer to (gleefully, I'm sure) agree to such a crappy deal.
You won't be surprised to hear that guy is Sonny Perdue.
Heads went a spinnin' at the GA capital Thursday when Sen. Jeff Chapman asked those questions to his fellow Senators and Representatives.
A state senator monitoring Jekyll Island's revitalization says if private contractors would share a larger portion of profits from a time-share development, the state would not have to borrow money to rebuild the island's convention center and a beachside park.
The move would save $100 million from the state budget over 20 years in bond repayments, said state Sen. Jeff Chapman, R-Brunswick.
Seriously, is it a bad idea for a Senator to come up with a pretty damn good way of saving money? Apparently it is in Atlanta, especially if it cuts into the profits of the Republican fundraising Reynolds family, which owns Linger Longer. Mercer Reynolds is a famous Bush bundler, McCain's recent finance chair and good buddy of Sonny Perdue. Jamie, his cousin, is also buds with Perdue and just so happens to be finance chair of Eric Johnson, who is running for Lt. Gov and is an "advisory" member of the JIA.
(This is the same Eric Johnson, by the way, who recently co-authored an opinion piece praising the JIA deal with the developer who serves as his campaign finance chair, Jamie Reynolds.)
Financial data published in December by Jekyll's governing authority shows Linger Longer will earn gross revenues of $163 million from the time shares. In his letter, Chapman asserts Linger Longer will spend only $46 million to build and market the units. Under that scenario, Linger Longer would pocket more than $100 million, Chapman said.
The Jekyll Island Authority will receive a $1.63 million cut from the sales under the agreement.
Because Jekyll's contract with Linger Longer hinges on the state selling an initial $25 million general obligation bond, withdrawing the bond sale would force a renegotiation, Chapman said, and a better deal for Georgians.
If Linger Longer were to make a 50 percent profit on its investment, or around $23 million, the company would still earn a profit margin that is well in excess of industry standards, Chapman said. A real estate representative told Chapman that in today's economic climate, a 10 percent return on a development deal is considered attractive.
Jones Hooks, the new Executive Director charged with running around with his hair on fire any time anyone questions the deal with Linger Longer, said of the bonds:
If the convention center (supposedly what the bonds are for) is not rebuilt, it will kill revitalization on Jekyll Island, he said.
"They absolutely wouldn't go for it. This is not the Linger Longer convention center," said Hooks. "It's something the whole park needs."
Ok, so the guy who is in charge of the body that manages the publicly owned state park is basically saying that it's more important for a private developer to make a 300% profit rather than renegotiate a deal where said developer makes less (but still way better than average) of a profit so that the state wouldn't have to issue bonds. That 300% profit is more important than renegotiating so that the people of Georgia, who own the island, can use their share to outright pay for a new convention center rather than borrow unnecessarily.
Rep. Terry Barnard, R-Glennville, and chairman of the House State Institutions and Property Committee, said Chapman might have a valid point, but agreed with Hooks that it was probably too late to change course.
"I think we have gotten the best deal we can get," Barnard said. "There is no one else knocking at our door."
Yeah, it's not like you could just ask one of the other 2 developers who submitted proposals on the original RFP to take a crack at a better deal for the state.
It's not like Linger Longer was the only developer interested. They were just the only ones with lots of political dough. And the only ones the JIA, appointed by Governor Purdue, seriously considered.
Look, it would be understandable to ask for the bonds if Jekyll and the state were getting a better deal. Then again, as Chapman argues, we might not need the bonds if Jekyll were getting a better deal.
Call your state Senator and Representative. Ask 'em.