By CONNIE ESHThe Wilson Post
The confusion surrounding who is responsible for investigating the finances of Bible Park promoters led Ward 3 Lebanon City Councilor William Farmer to ask Wilson County Industrial Development Board Attorney Robert Rochelle to help clear up some of the questions before the issue comes back for a vote of the council.
“I wanted to be sure that I correctly understood the procedure concerning the Bible Park bonds,” Farmer said in a letter to Rochelle dated March 6. “I believe the City Council realizes that the proposed bonds are non-recourse bonds and any failure of the bonds will not fall back on the governments involved. However, there is considerable confusion concerning the duty to perform ‘due diligence’ concerning the feasibility of the subject project.”
First, Farmer said he was concerned whether under Tennessee law Tax Increment Financing, required the IDB, city council or the Wilson County Commission was responsible to review the project and its financing to decide if it was in the best interest of the community.
He said it was his understanding that, “In essence any due diligence concerning the project and its feasibility rest not with the Wilson County Industrial Board, but with the governmental agencies that are requesting or allowing the bonds to be issued.”
Rochelle, in a letter returned March 10, said that as he understood the TIF process the developer was responsible for the feasibility study which is filed with the IDB.
“In Tennessee, a developer initiated study is the only procedure which can be used by a developer to initiate a TIF project,” he said.
He also added that this process involves two major policy decisions to be made by the elected officials involved.
“First is the issue of whether the governments want to use the TIF method of financing community development,” he said.
The second is a policy decision by the governments about whether the proposed project will be beneficial or harmful to the community.
Farmer also expressed concern that the IDB would rely on the economic study that was presented and previously accepted by the governmental bodies, and not ask for any independent feasibility or economic study about the Bible Park
And he added his concern was that the bank or financial institutions who will be involved with the subject bonds may or may not require an economic study and may simply accept the economic study that has been presented to local government.
Rochelle responded, “...credit worthiness is historically determined by the folks putting up the money.”
He added, “If an individual elected official determines to his satisfaction that this project is a fraud or that the developers are crooks, he should vote accordingly.”
However, he said except in extreme situations, “normally credit worthiness is better determined outside the legislative process.”
He added “There is certainly no duty for an elected legislative official to educate himself enough to be able to make such decisions on a par with individuals trained to make such decisions.”
Farmer continued, “... it is my impression that any responsibility for ‘due diligence’ concerning the feasibility or economic viability of the Bible Park project rests not with the Wilson County Industrial Development Board” but with government officials.
But Rochelle said, “The phrase ‘due diligence’ generally refers to the inquiry of a potential buyer of a business or investment having the right and duty to examine confidential information of the business before finalizing the purchase. I do not believe that the phrase is appropriate in describing either the rights or the duties of elected officials in this instance.”
Staff Writer Connie Esh may be contacted at email@example.com.