According to a memo sent by Town Manager Sam Greenwood on Tuesday, the town’s loan application to BB&T to finance the $1.25 million store in the new Walmart Supercenter Plaza has been denied.
In his memo, Greenwood stated the loan was rejected because of the 20-year length of the loan. “We have been informed by Davenport Associates that our financing package request has been turned down by BB&T, apparently, due to our requirements of (A) the term, at 20 years and (B) that all funds for repayments will come from ABC store revenue, i.e. sales. It is ironic in light of all the false information in the community that the Town would use tax revenue to repay the loan that if the Town had committed to using tax revenue in place of ABC sales proceeds the loan would have had a much better chance of approval. All other major exposures to the Town carrying the loan were covered, such as the now remote chance of state changes to the ABC law including abolition of local ABC systems,” reads the memo. “The merits of the concept aside however, we feel it is now our responsibility to cancel the loan application, notifying Bright-Meyers that we will use the Town's escape clause activated by the loan/financing rejection to void the contract to purchase and notify the ABC commission and Town Board.”
According to Greenwood, at this point, the Town will no longer be pursuing further actions to own the ABC store and the future of the current store is solely up to the ABC board. “Because of the guidelines in our contract with Bright-Meyers, we decided to pull the entire process,” said Greenwood Wednesday morning. “With the current store's lease set to expire at the end of November, it is up to the ABC board to make a decision. I believe that they will be looking at leasing options, either at the current location, a new location or even leasing the property at the new Walmart site.”
Greenwood also stated that he is certain that purchasing a store in the future is now definitely not an option because the Town Board has been adamant in their attempts to not use taxpayer dollars for the store. “To be approved of the loan would require the town to put a tax guarantee in and that is something that the town has been against doing from the beginning.”
Alderman Bob Scott stated that he believes the bank's decision to not grant the town the loan speaks to public opinion. “I am not really surprised because it has never been a sound idea,” said Scott. “The public has been overwhelmingly against it and the Town Board has seemed to repeatedly ignore the public's opinion on the matter.”
According to Franklin Mayor Joe Collins, the next step in the process falls in the laps of the ABC board members. “I understand that the ABC board is in negotiations for an extension on their current lease and I don't expect the Town Board will pursue a new property to purchase,” said Collins. “I anticipate the ABC store will remain at its current location.”
Scott agreed with Collins and said he, too, believes the ABC store will look at extending the current lease or moving to another property in town. “I believe that the store will either be put in an available building in town or keep it where it already is,” said Scott. “The town should not be in the real estate business and I believe that be it is likely that in the coming years the state will privatize the ABC system.”
Alderman Joyce Handley cited her experience as a banker to justify her lack of surprise that the loan was rejected. “Sometimes things happen for a reason,” said Handley. “I was not surprised. Being an ex-banker and knowing the way lending goes and things being so tight, I understand the bank's decision.”
Greenwood stated that the town should be able to cancel the current contract with Bright-Meyers without penalty because the contract was contingent on receiving approval from the bank for the loan.
Alderman Verlin Curtis declined to comment.
As of press time, other members of the board were unable to be reached for comment.