Supes plan to sign lease-purchase for Pass It On building

The Pass It On building will soon become expanded court space for Clay County
Staff Writer

Some Clay County residents may still have questions about lease-purchase financing, but it's a popular tool for constructing public buildings, according to lawyers and elected officials who have used it. That includes officials in Starkville and Webster County.

Clay County supervisors plan to sign a lease-purchase with the Golden Triangle Public Buildings Leasing Corp. for the justice complex proposed for the old Pass It On Building on West Point's Main Street.

Golden Triangle Leasing is a non-profit, tax-exempt arm of the Golden Triangle Planning and Development District. All but one planning district in the state has established similar agencies and dozens of local governments across the state have used them to facilitate new construction and still take advantage of the low tax-exempt interest rates that apply to government-issued general obligation bonds.

Under the pending local deal, Golden Triangle Leasing would design and oversee renovating the Pass It On building to include three courtrooms, secure holding cells, offices, security cameras, video conferencing and other tools to meet Clay County's standards. The county would then lease the building for up to 20 years from Golden Triangle Leasing at a fixed rate.
Golden Triangle Leasing and its proposed contractor, Benchmark Construction based in Jackson, will bear the expense of unforeseen cost overruns, leaving the county with a fixed payment that makes budgeting easier.

"One of the biggest advantages is that fixed amount. The county supervisors and county taxpayers know what the cost is going to be when they sign the lease," explained Lucien Bourgeois, an attorney with Butler Snow in Jackson and one of the special bond counsels on the project.

One downside is the lease-purchase deal is not subject to a referendum. That is what has Clay County contractor Mike Henson upset.

"The number one reason for doing a project this way is to avoid a public vote on it, to avoid the will of the people," Henson said. "It's the procedure of taking it out of the hands of the people.
"It's obscene. We have no way of knowing whether we as taxpayers and citizens of Clay County are getting the best deal, the biggest bang for our buck. The only way to do that is to have open public bids and that's not happening," Henson continued in a phone conversation with the Daily Times Leader"I might be for it, but I have no way of knowing under these circumstances and I don't know that our supervisors do."

But others say safeguards are in place.

"Even if something requires a millage increase, the governing body can only increase within what the law allows. Anything beyond that is subject to a referendum so the public is protected," said Troy Johnston, another Butler-Snow attorney involved in the project.

"And supervisors have the final say in the costs and the contracts and by acting as  construction manager, we get the best deals, the best prices on every phase of the work. And this law was set up to take the politics out of it and to help get the best deals," added Rudy Johnson, executive Director of the Golden Triangle Planning and Development District, the parent of Golden Triangle Leasing.
At the Oct. 5 Clay County Board of Supervisors' meeting, Henson questioned the process and the lack of input and transparency in the deal. Supervisors backed up and asked Bourgeois to draft a request for proposals to be sent to a variety of potential contractors to act as construction managers. Those responses were opened Monday and Johnson said only one local firm -- Southern Roofing -- put in a correct proposal, although it was not large enough to handle the project.

"The supervisors did the right thing. They agreed Mr. Henson had some valuable concerns and points and they listened to them. That's why they stepped back and took more time to take requests for proposals. I don't think anyone has intended to hide anything," said Chancery Court Clerk Amy Berry, who acts as the administrator for the Board of Supervisors.

In the end,  Benchmark, which has built numerous jails, police stations, fire houses and similar projects across the state, is the apparent best offer.

Benchmark is expected to solicit local companies for sub-contract work. That's an important fact, Johnson said.

"We'd love to hire every contractor in Clay County to be involved in this project. That includes Mr. Henson and everyone else. One of the ways we get the most for taxpayer dollars is bidding out small sections of the work and controlling every phase of the costs," Johnson said of the construction manager role.

"We've got a lot more contractors in Starkville and we didn't receive any complaints about how that was done," he added of City Hall.

Roger Pryor of Columbus-based Pryor and Morrow Architects is finishing up plans for the project.

Johnson says he hopes to have those plans signed off on by Clay officials by the end of January. He expects Benchmark to quickly have a cost estimate. Clay supervisors then will get a proposed lease agreement.

Construction is expected to take about a year.

Supervisors have said they hope the deal can be done for $2.5 million to $3 million. Others have said it could cost as much as $5 million.

"Everyone still is waiting for the final plans so they can get a final cost. The process has gotten slowed up a little bit but that's been more time for the county to get and give input," Bourgeois said.
"Clay County has the final say. If they don't like the numbers, they tell us to go back to the drawing board to get within the numbers they can afford, within their budget. They ultimately are in control all the way, from the plans to the costs," Johnson noted.

Henson still isn't convinced. 

"It's just not the way you do business. And once they sign the contract, the damage is done. You can't go back and stop making payments if the public changes its mind or figures out it wasn't a good deal. It's just not good common sense," he stated.

Clay County supervisors may discuss the next steps at their meeting Thursday, Nov. 30.

Starkville built its new City Hall, which opened two years ago, through a lease-purchase agreement with Golden Triangle Leasing.

"It has worked out well so far," Starkville Mayor Lynn Spruill said of the arrangement.

Webster County supervisors signed off two months ago on a similar arrangement to lease-purchase its new courthouse to replace the historic one destroyed by fire almost five years ago.

Clay County plans to turn the 25,000-square-foot former Jitney Jungle grocery store and Pass It On thrift store into offices for the Justice and Circuit courts, and the Election Commission which falls under the Circuit Court. The building would house three courtrooms, one to seat up to 240 people and a second with a 100-person capacity. Both would those would be for Circuit Court.

The third courtroom seating 75 to 100 people would be for Justice Court. 

Sheriff's deputies would bring prisoners to and from court through an enclosed "sally port" and house them in secure male and female holding cells.

Meanwhile, Chancery Court and the Tax Assessor would remain in the downtown Courthouse, which opened in 1957 after the original courthouse burned.

The Board of Supervisors offices may stay in the courthouse or move to the old Daily Times Leader building just to the south.

The annex to the west of the courthouse currently houses some chancery offices, election materials and other services. It likely would be torn down to make way for parking, which is at a premium when court is in session, and green space.

The county also may buy some other property in the area of the courthouse for parking.