Oliver Jones, of the Cutliff Grove Family Resource Center’s board, speaks to the Albany City Commission Tuesday.
ALBANY, Ga. — Cutliff Grove Family Resource Center officials have asked Albany city commissioners to cut their debt on a low-income housing project by 50 percent and to allow that lowered debt to be repaid over 30 years with no interest.
Speaking to the commission Tuesday, Oliver Jones, a board member at CGFRC, and Juanita Mixon, the group’s program manager, said that the need for roughly $448,000 worth of repairs to the Nativity housing complex on South Madison Street is placing a financial strain upon the organization.
The original loan granted to CGFRC in February 2008 was for $1.5 million, with a 3 percent interest rate for a term of 30 years. Loan payments were deferred for three years.
A recent audit by Brown and McDaniel CPAs, however, suggests that the organization isn’t solvent enough to make the necessary repairs without a modification to the loan.
The group is asking the commission to lower the principal to $716,759 at zero interest for the next 30 years. If approved, it would lower the group’s monthly payments from $6,324 to $1,191.
“Many repairs are needed,” Jones said. “We’re in dire need of help, to put it plain and simple.”
Jones says that the repairs that were done to the 42-unit site were not done properly and Mixon said that the three years’ worth of rent the group collected without having to make a payment to the city went partially toward repairs, with the rest going to pay for taxes and insurance on the building.
“If we want Albany to be a place where we can truly say it’s the Good Life City, we have to continue to have living accommodations that is suitable for people who want a safe and sanitary place to live,” Jones said.
Commissioners appeared cold to the idea of completely modifying the terms of the loan, but also seemed hesitant to leave the organization to its own devices — a move that could end up with a default on the loan and the city getting a 42-unit complex to operate.
“The city doesn’t need another piece of property,” Ward VI Commissioner Tommie Postell said. “We don’t need to be in the landlord business. I say we do what we can to help keep this building in their hands rather than have it fall into ours.”
Albany Mayor Dorothy Hubbard wasn’t as convinced.
“The thing that worries me is lowering the principal,” Hubbard said. “It’s one thing to lower in the interest rate, but lowering the principal doesn’t seem like a good idea to me.”
And then there is the legality of the matter.
City Attorney Nathan Davis said that the request may violate the gratuities clause of the Georgia Constitution, which bans the state or other local government entity from giving anything away to for the benefit of a private organization.
City Manager James Taylor said that the request gives him “great concerns” over the organization’s ability to carry the note.
“I have grave concerns. It is not certain to me that they can ever generate sufficient revenues to settle the note,” Taylor said.
According to a letter sent to Taylor by W.D. McDaniel, a CPA for the firm that audited CGFRC’s books for 2008, 2009 and 2010, the organization averaged in revenues of $200,000 per year in rental payments with expenses of $165,000 per year.
The remaining $35,000 in cash flow would not meet the $75,000-per-year note obligations with the city, McDaniel says.