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City assumes responsibility for $21 million ‘Creek’
To repay $15.5 million loan over 30 years, get $5.5 million free
Creek Project location.jpg
The red outline shows the footprint of the Creek on the Blue Mile Project that will encompass approximately 36 acres in the midtown area of Statesboro.

Agreements that Statesboro City Council approved Tuesday make the Creek on the Blue Mile completely a city project in regard to $21 million in state financing, up to $15.5 million of which, plus low interest, the city will have to repay over 30 years.

With a series of three unanimous council votes, the city took responsibility for repaying the $15.5 million line of credit from the Georgia Environmental Finance Authority for constructing the approximately 25-acre reservoir and transforming a drainage ditch into a creek. Not spelled out in these documents but now expected to come directly to the city, instead of to the Development Authority of Bulloch County, is a $5.5 million grant, or “state direct investment,” that won’t have to be repaid. That portion of the funding will be for the reservoir alone, city officials say.

“It’s not actually a grant. It’s a state direct investment, which would mean that they would be entitled to the entire water yield that comes from the impoundment of Little Lott’s Creek,” City Attorney Cain Smith said after Tuesday’s meeting.

The rationale for this is a state program that encourages communities to create reservoirs for times of drought, he explained.

If the $5.5 million “grant” isn’t exactly a grant, the “loan” isn’t a simply a loan, either, but a line of credit for up to $15.5 million. The city is not required to borrow the full amount.

“The costs of the project are obviously not determined at this point,” Smith said. “The intent would be that the state direct investment would cover the costs upriver from the impoundment dam and then the loan proceeds would pay for (the project) downstream from the impoundment dam.”


DABC steps back

One of the agreements approved Tuesday night took the Development Authority of Bulloch County, or DABC, which the state originally chose to be the recipient of the loan, out of the picture for repaying the loan and overseeing the project.

The “city is the entity with the resources and capacity to undertake a project of this scale, therefore, the need for this assignment,” Smith stated in a memo to the mayor and council. The Development Authority’s board had voted unanimously Feb. 12 to approve the same agreement.

City officials noted that the DABC has a two-member staff, in comparison to the city’s resources.

“We were happy to be in a position to support what was being done and to help secure the funds for the project, but once we were told that the funds were going to be allocated through us, that’s when we started trying to figure out how to get the funds to the right place, and I think the process everybody’s going through now is getting to that end,” Development Authority CEO Benjy Thompson said Wednesday.


Blue Mile Foundation

Meanwhile, the Blue Mile Foundation Inc., where the concept of a scenic creek was fleshed out after being suggested by Market District developers Andy Burns and Doug Lambert, will continue to have role through an advisory committee and the project coordinator.

“The Blue Foundation is still going to be very active in this project because it was our signature project, so we’re very excited about partnering with the city of Statesboro. …,” said Blue Mile Foundation President Keely Fennell. “And since this has always been a city project – we were just community leaders working within the city – there’s really no surprise that the city would take on the leadership of this.”

Then-Gov. Nathan Deal brought word of the state’s funding commitment during a December visit to Statesboro.

In the overall vision, the “creek,” will be an expansion of the drainage canal that crosses under South Main Street, with linear park features linking the reservoir west of South College Street to Fair Road Park east of South Main Street, also known as the Blue Mile.

One agreement approved by the council Tuesday evening identified the Blue Mile Foundation as “manager” of the project, under contract to the public Development Authority. But this provision was mostly undone by the “assignment” or “assumption” agreement, under which the city took over responsibility of the loan from beginning to end.

To do so, the city will pay a 1 percent origination fee of $155,000 and then is required to withdraw “some amount” of money within six months of closing on the loan, as summarized in the council agenda.

The annual interest rate will be 2.25 percent over the 30 years, said City Manager Randy Wetmore, who did not attend Tuesday’s meeting but was interviewed Wednesday.

The only portion of the Blue Mile Foundation’s management contract that survived the transfer to the city was the city’s promise to pay, for at least one year, a project coordinator hired by the foundation, Smith told the council.

City Council had voted in January to pay half of the expected $100,000 one-year cost of employing the coordinator, with the other $50,000 to be paid by the Development Authority. Now the city will pay the full $100,000, but the ultimate source of that second $50,000 remains the same, the state funding.


Advisory committee

An attachment creates a Creek District Oversight Committee with up to seven voting members. It will be limited to making recommendations on development, zoning and design standards for the “Creek District” to City Council, which will make final decisions.

The committee as originally proposed would consist of a City Council member appointed by the mayor, a city staff member appointed by the city manager, two members appointed by the Blue Mile Foundation, one appointed by the Bulloch County Board of Commissioners, one appointed by the Downtown Statesboro Development Authority and one appointed by the Board of Education contingent on its participating in the “Blue Mile” Tax Allocation District.

However, the Board of Education so far has not agreed to participate in the Blue Mile TAD with a share of the school system’s property tax revenue growth. After a suggestion from District 1 Councilman Phil Boyum, District 3 Councilman Jeff Yawn, who made the motions on the agreements, stipulated that City Council will appoint the seventh member until the school board agrees to join the TAD, if it ever does.


Flood control?

Flood prevention and runoff control are the purposes local officials are emphasizing in regard to the state funding. However, the vision set out by Blue Mile volunteers emphasized economic development purposes and recreational uses at least as much, as have city officials.

“We’re really pushing, through a public-private partnership, economic development not just for the city but for the region as well, because this really positions us to become that economic hub that I’ve talked about over the year that I’ve been mayor,” Mayor Jonathan McCollar said after Tuesday’s meeting.

Portions of the plan that do not touch on storing and channeling water will probably have to be funded from other sources than the state loan and grant, Wetmore said Wednesday.

Both Wetmore and McCollar describe the city’s stormwater utility fee as one potential revenue source for repayment of the loan. The fee, imposed on almost all city water customers by a 2015 council action, currently nets about $1 million a year for drainage improvements and maintenance.

Private development that the project spurs should also increase property values and retail sales so that the project can help to pay for itself through tax revenues, McCollar said last week.


Herald reporter Al Hackle may be reached at (912) 489-9458.


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