Respectfully submitted for your considerationI find very interesting the reaction to the story in last week’s Courier about the financial problems of Jerry Hunt, the former head of Savannah Industrial Development Corporation (SIDC) and former CEO of Team Hardin County.
Some have commented that this is a personal matter, hinges toward gossip and criticize The Courier for even printing it, let alone on the front page.
Well, excuse me. When a public figure uses public dollars for a personal project and then that project goes belly up in six months, for whatever reason, I think The Courier has an obligation, as a newspaper, to give a heads-up to the public. The public is entitled to know if it was a good loan, that was really a bad loan to start with, or to know why it went bad.
These are tax dollars, folks.
Hunt made himself a public figure in Hardin County a long ago and has now used his current employment with the state along with his knowledge and experience on how to get a loan of public funds from the SIDC, a component of the city of Savannah government and a member entity of Team Hardin County, which is a component of Hardin County government. So far, there is nothing improper about that, at all.
But it turns out all Hunt had to do was tell the SIDC the loan package had already been approved in Jackson, it just needs to be funded by the SIDC, because Hunt worked for those folks that approved it in Jackson. One of those conflict of interest things, you know.
One has to wonder what happens if "the loan package" that was approved in Jackson, was not the same "loan package" presented to SIDC "for funding." What happens when the current CEO of SIDC doesn’t bother to check the details or verify and document the information in accordance with the SIDC and statutory requirements? You end up where they are today.
At the request of the chairman of the SIDC board, over a two or three month period last year, I worked with a team of volunteers to complete a little audit or records research project on this loan. What we found is not a very pretty picture.
There were so many administrative mistakes made by SIDC, SWTDD and the USDA in Jackson that one must conclude that they could not have all been just mistakes. Some of them had to be "just didn’t do their jobs" kind of mistakes and Hunt was less than truthful as to his financial conditions and/or his intent to actually operate a bed-and-breakfast and to create jobs.
To make a long and convoluted story short, the day the SIDC board approved the funding of the loan, a few of the members were heard to comment, after the meeting, that, "We should have never approved that loan. It’s going to come back to bite us."
History has proved those folks right.
The details of how the loan was processed, or not processed as the case may be, is beyond the scope of what can be covered here in this forum, but the big picture should be clear enough—had the current CEO of SIDC, Steve Bunnell, verified the information in the IRP application for completeness and accuracy, the loan would have been a borderline project, at best, for an IRP loan.
Oh, that’s right, the final version of the IRP loan application didn’t get signed by the Hunts until almost 90 days after the IRP loan closed and only a week or two before the Hunts requested SIDC release their second mortgage on nine acres and a reclassification of the loan from an IRP equipment and working capital loan to a real estate loan. SIDC and those folks in Jackson says, OK with us.
SIDC released over $112,000 in real property collateral and tried to release the SIDC lien against all of the furnishing belonging to the Hunts and the B&B. Hunt’s estimated value of these furnishing was $160,000, including an estimated $26,000 in new furnishing in B & B project.
SIDC received no consideration for releasing their collateral or reclassification, but the Hunts picked up about $19,000 in cash and got a $10,000 car loan paid off. The rest of the proceeds of the sale went to principal and interest on Hunt’s past due first mortgage on the real estate.
One might challenge that when one lays this "small or minority business IRP loan" over the statutory template, this loan should have never been made. But, SIDC went completely out of bounds when they agreed to reclassify the loan from an IRP equipment and working capital loan to basically a second mortgage real estate loan and still use the IRP revolving loan funds.
These funds were provided to SIDC by the federal government, with restrictions and requirements, for relending for the benefit of economic and community development Even if the funds were initially loaned for the benefit of economic and community development, within three to four months the Hunts asked for, and everybody else agreed, to reclassify the IRP loan from an equipment and working capital loan, which, if properly structured, could be a qualified IRP project, to a second mortgage real estate loan, which could not be a qualified IRP project.
Where are the checks and balances? Who is minding the store? The total project cost was suppose to be $150,000. A $75,000 IRP loan and $75,000 equity. Where is the equity?
The questions are voluminous, the direct answers from the current CEO, Bunnell, have been avoided or answered as "I don’t know."
As a side note, if one thinks that Hunt and Bunnell have kind of messed up things with this loan, just wait until the research is published locally that shines a bright light on what kind of a mess Hunt, along with some of these same players, managed to leave for Team Hardin County.
Of course, the current group at Team Hardin County, which includes Mayor Kevin Davis among others, doesn’t seem to mind, as long as they don’t have to admit they just went along with Hunt and Bunnell. There is a real mess to be straightened out.
Remember folks, this all involves tax dollars and oversight.
Ted
Ted G. Cook
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