A bill that would suspend principal payments on City-issued loans to The Vestcor Companies for 11E and The Carling Downtown was approved Monday by the Council Finance Committee, but support was not unanimous.
If Council passes the bill, the real estate development company would make interest payments only for the next three years. Jacksonville Economic Development deputy director Paul Crawford addressed the issue to the committee, citing the downturn in the economy as the chief reason for the request. The deferred payments would still be paid once the company maintains profitability, he said.
All finance committee members in attendance spoke on the issue. Council member John Crescimbeni questioned the fairness of such an action given the economic troubles personal businesses are facing. Council member Clay Yarborough agreed with the questioning.
“I personally believe the taxpayers shouldn’t be on the hook for this,” said Yarborough. “It’s not to say there aren’t folks out there who want a vibrant Downtown and want Downtown investment, and I’m not advocating we don’t do that, but in a matter of priorities and in the times we are facing right now with budget cutting, I don’t believe this is in the best interest of our taxpayers. I don’t believe it’s fair.”
Others agreed with the measure, given the alternative.
“The reality is we have to make a responsible fiscal decision based on the facts as they exist today,” said Jack Webb. “As far as being on the hook, we are on the hook. We are the note holder. The decision now is, ‘What do we do?’ The fact is, we are in the (real estate) game, we are in the market.”
Webb reminded the committee that the measure is principal deferment, not forgiveness, and it’s in the best interest of the taxpayers to avoid default. Council member Bill Bishop agreed, comparing the situation to what commercial banks are doing working with clients.
“I think it would be remiss on our part to give up now,” said Council member Don Redman.
The measure was approved 5-2.