Tag: business park loans

The Six Million Dollar Land

The LEDC will meet Wednesday for their usual monthly meeting. They will be discussing the most inefficient way to incinerate millions of tax dollars with their “business” park project.

In honor of this, I want to summarize the big-ticket loans they have either taken out or are about to take out for this never-ending boondoggle.

Oct 2003 – LEDC purchases land for $909,000. To do this, they took out a loan from First State Bank of Central Texas for $1.1 million for 15 years at 4.95% [see page 14]. If you use an amortization calculator, you see the total cost for the land was $1,560,000. That works out to approximately $9,500 per acre. Loan matured in November 2019.

March 2015 – LEDC takes out a loan for $1,345,000 for 15 years at 3.35%. The loan is written by First State Bank of Central Texas. This money was mainly wasted putting a bunch of pipes in the ground and running electricity to the site (roughly one million dollars). Loan is SUPPOSED to mature in March of 2030. Thanks to Misti Talbert and TJ Monroe [page 4, item VI], loan will be extended to March 2040 – costing the taxpayers an extra $207,000. TOTAL cost of this loan (principal and interest) $1,925,000.

Spring 2021 – LEDC fails to pull off their Covid money scam. Local scumbag Mike Cour turns out to NOT actually be a viable tenant. In fact, he had his hand out for roughly $1.85 million from the taxpayers. Of course, Mandy Walsh, Misti Talbert, TJ Monroe and the rest of them were strung along and CONNED by this weasel for a YEAR before it all fell apart.

So NOW they have to do it the old-fashioned way – go to the banks and take out a loan. BancorpSouth [which acquired First State Bank of Central Texas at the end of 2019] has agreed to back the loan (but only if they agree to extend the $1.345 million loan for another TEN YEARS (see above).

The BancorpSouth loan is for $1,500,000 for 21 years at 3.2% (according to LEDC packets – pages 9 and 10). With interest added in, that will cost the taxpayers $2,061,000.00 after all finance charges. Oh, plus a $15,000 loan origination fee. Total of $2,076,000.

Add up all the loans, and you get $5,561,000 after financing charges.

Pope Eckermann himself pegged the cost of Phase II Phase I at around $1,900,000 back in early 2020. Given the inflation we have seen in the last 18 months, I highly doubt that figure is still valid. It will be at LEAST $2.2 million. Subtract out the $1.5 million borrowed, and the LEDC will be on the hook for another $700,000 if they are lucky.

New total? $6,261,000 if my estimates are correct and just under $6 million if The Pope’s numbers from early 2020 are still valid.

That works out to roughly $37,000 per acre.

Number of tenants recruited for the “business park” since 2004: 0

Number of jobs created: 0

*UPDATE* – LEDC Loan Costs Now Much Higher For Taxpayer Thanks To Idiotic Extension Of Original Loan

So, I have the NEW amortization schedule in my hands, thanks to a very efficient City secretary.

As I stated before, the OLD loan only had about $133,000 remaining in interest payments over the next 9 years (total interest of $377,000 minus the $244,000 already paid over the last 6 years).

That is now out the window. The balance of the ORIGINAL loan ($885,652.00) will now be re-amortized at the old interest rate of 3.35% and extended another ten years – which will cost the taxpayers $340,882

So the LEDC went from only owing another $133k to now owing $340k in interest over the life of that $1.35 million dollar loan- thus fattening bank coffers by an additional roughly $207,000 in tax dollars.

Thus, that original loan for “pipes in the ground” of $1,340,000 will NOT cost the taxpayers $1,722,000 as originally stated back in 2015. It will now cost the taxpayers very close to $2 million total, after all is said and done.

Why would the LEDC just bend over and take it up the pipe like this? Why put the taxpayer on the hook for ANOTHER $207,000 in interest payments for no reason whatsoever?

Well, for starters, morons like TJ Monroe and Misti Talbert sit on the LEDC board. I mean, you couldn’t try to NEGOTIATE a bit? Maybe say “Hey, we agree to all your terms EXCEPT the loan extension – we don’t want to keep shelling out money for an extra TEN YEARS”.

Nah. Nobody negotiates anything when it comes to tax dollars. It’s all play money to imbeciles like TJ Monroe.

Let’s not forget that the NEW $1,500,000 loan from BancorpSouth will cost the taxpayers roughly $560,000 in interest payments over the life of THAT loan.

So we are now looking at $4,000,000.00 to get the ‘business’ park “shovel ready”, apparently, if you just look at the cost of those two loans taken out since 2015.

But there’s more!

Pope Eckermann himself guestimated the cost of Phase I Phase II to be around $1.9 million – with a 10% contingency thrown in there. Those numbers were arrived at in Jan 2020 (see page 4) – 18 months ago! I GUARANTEE you the new cost will be north of $2.3 million before all is said and done.

[** UPDATED Feb 2022: new cost was $2.75 million**]

Guys like Pope Eckermann are not stupid. Once the big $2 million dollar project is well underway, the LEDC and City council will not even blink at a few “cost increases” of $60,000 here and $86,000 there. That’s how these things work. He knows that morons like Chuck Williamson and Total Joke Monroe will fall victim to the Sunk Cost Fallacy, because they have done so repeatedly in the past.

So, the LEDC is on the hook for the difference between the loan amount of $1.5 million and the actual, final cost of construction – which could be $2.3 million or more.

If history is any guide, it will be more. Much more.

So that’s ANOTHER $800,000 thrown in for good measure. We’re at $4.8 million now.

The original cost of the 150 acres was $909,835 as well – back in October of 2003. Terms of THAT loan (see page 14) were to borrow $1.1 million for 15 years at 7% (later refinanced down to 4.95% but not sure when that happened).

Why borrow $1.1 million when the land cost $909,835? Well, probably for some pocket change!

THAT loan matured in November of 2019 and over the course of the loan, the LEDC paid approximately $460,000 in interest payments. So the land they bought for $909,835 ACTUALLY cost the taxpayers $1,560,000.00

Roughly $6.3 million is what this debacle will have cost the taxpayers by the year 2040, JUST from these loans. I have no doubt they will decide in ten more years that they need a Phase III or Phase IV.

I’d love to hear what City council thinks about this absolute waste of money. Not TJ Monroe, of course. I couldn’t care less what she thinks, as she has shown herself to be a fool over and over and she sits on the LEDC board.

Maybe the NEW council members could chime in on this at their next meeting.