ATLANTA (AP) For approximately eight years, the state has been getting something for nothing from the Lake Lanier Islands Development Authority.
Recently, the authority sent a letter to Gov. Sonny Perdue asking to stop making $1.3-million annual payments on a loan it paid off in 1997. The agency continued to pay because they wanted to help the state, authority chairman Frank Turk said.
“We really didn’t know that we needed money,” Turk told the Atlanta Journal-Constitution.
Now, the authority does need the money to make infrastructure improvements like widening roads and upgrading the sewer system. The improvements are part of a deal struck with Gwinnett County Businessman Virgil Willliams, who has bought the lease from the state to operate the Emerald Pointe Resort and its golf course, marina and other facilities at Lake Lanier Islands.
Williams wants to turn the $14.5-million property into a luxury resort.
The loan originated in 1987 as part of a state effort to make parks and recreation areas more financially independent. The Lake Lanier Islands Development Authority received approximately $25.7 million from general obligation state bonds issued through the Department of Natural Resources, which was used to build facilities like Emerald Pointe.
The authority managed land, but now manages leases. The land around Lake Lanier is owned by the federal government, but leased by the Army Corps of Engineers to the state through the Department of Natural Resources.
The Department of Natural Resources leases the land to private resort operators, and the Lake Lanier authority administers the leases between the state and private interests.
Ten years later, the loan was repaid using revenue from those resources. The Lake Lanier authority then sold the lease to operate Emerald Pointe to a private hotel firm, and proceeds from the lease’s sale were used to retire the bonds.
Since then, the authority said it has paid $14.4 million more than the $26.9 million the bonds cost the state. In the letter to Perdue, the authority said although it paid off the loan early, it was still obligated to make annual payments through 2010 because the $1.3-million obligation was not written out of state appropriations rules after the bonds were paid off.
Before making his offer, Williams examined the property and discovered much of the infrastructure was seriously in need of replacing or upgrading, which the board confirmed.
Lobbyist Joe Tanner said the Department of Natural Resources (DNR) counted on the Lanier payment as part of its annual budget and would be hurt if the loan ends. The money is 1.4 percent of the state agency’s $95-million funding for fiscal 2005.
“If you just end the payment, then DNR would take a $1.3-million hit,” he said.
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