SARA debt plan OK’d

Published 12:00 am Wednesday, July 20, 2011

The Andalusia City Council suspended the rules twice Tuesday night, first to approve an ordinance for the refinancing of South Alabama Regional Airport’s debt, then to adopt an ordinance selling approximately 15 acres of the city’s Snead-Kennedy property to PowerSouth.

The ordinance related to SARA Authority debt relates to up to $7.5 million in financing from the Royal Bank of Canada to refinance old debt and pay for construction of Vector Aerospace’s expansion. In the ordinance, the city agreed to be responsible for 37.5 percent of the debt if the authority could not make the payment. The county would be responsible for 37.5 percent and the City of Opp, 25 percent.

Councilman Kennith Mount questioned the percentages, pointing out that previous agreements required the county to secure 50 percent of the debt; Andalusia 30 percent and Opp 20 percent.

“In the big picture, Andalusia benefits more,” Mayor Earl Johnson said, adding that he doesn’t anticipate the airport authority defaulting on the note. Johnson said all parties have been working on the refinancing for almost two years.

Meanwhile, the council agreed to extend for 60 days short-term financing it secured from Whitney Bank to begin the Vector Expansion project. When the larger financing project is completed, the Whitney Bank note and interest will be paid by the Airport Authority.

The council also agreed to sell PowerSouth 15 acres that abuts the campus north of town.