VBT LDFA gets update on loans from VBT, progress of Visteon suit

At a 21-minute Zoom meeting Sept. 8, the Van Buren Township Local Development Finance Authority discussed
its proposed budget for 2021, current budget for 2020, and the progress of the law suit against Visteon.
VBT Deputy Treasurer Sean Bellingham sent a memo to the LDFA updating members on the loan agreement with the township.
He said the township loaned the LDFA $900,000 in March and another $800,000 in September to meet the Visteon bond obligations due on April 1 and October 1.
He said going forward the advances will be made on these dates each year until the bond obligation is fulfilled.
As detailed in the loan agreement, the LDFA has agreed to pay interest on the township’s shortfall payments until they are reimbursed at an annual interest rate equal to the average interest rate that the township is earning on the investment of its general fund monies.
As of September 2020, the LDFA owes the township with interest, $2,409,541.67.
The Sept. 8 meeting was also the twice-annual public informational meeting in accordance with Public Act 57 of 2018.
Dan Selman, executive assistant to the township supervisor, explained the primary focus of the LDFA at this time is the payment of the debt obligations as a result of the public improvements for the Visteon Village project completed in 2004.
In order to finance the construction of the public improvements, the LDFA issued bonds to cover the costs of the improvements and those bonds were guaranteed by the township’s ability to tax.
Selman said due to economic conditions the LDFA will not capture sufficient tax revenue to cover scheduled debt service and due to the shortball, which occurred Oct. 1, 2019, the LDFA was loaned $700,000 on Sept. 4, 2019 by the township to assist with the bond payment.
Selman said the LDFA will continue to pursue legal action against the original developer pursuant to the shortfall.
VBT Supervisor Kevin McNamara said the lawsuit against Visteon is in the interrogatory stage, where VBT is asking them for information and Visteon is asking the township for information.
He said some of the things they are asking for are not pertinent to the question and would take years to assemble.
He said they are bringing in an independent judge to determine what each side would have to provide.
“My hope was to have a trial next year,” Supervisor McNamara said.
He said in the next six to eight months the courts will clear up the criminal trials waiting and then get to the township’s case.
LDFA member John Delaney said his guess would be 2022.
LDFA chairman Michael Dotson said there still is action, still is movement.
“And billable hours for both sides,” Delaney said.
McNamara said the township put money aside for this, “So, we’re a step ahead.”
In other business at the meeting, the LDFA:
• Heard Delaney say he wanted the LDFA to be kept aware of the loans as they are being made from the township. McNamara said Dotson called when he saw what was on the agenda to ask about it. “Communication is key and you can’t communicate too much,” Dotson said. “I’m getting notice when the money is due”; and
• Heard Delaney say he didn’t want to blow off the celebration of 9/11 next year so he is starting to plan. Delaney and the LDFA sponsored a special event last year on 9/11 and Dotson thanked him again for that. Delaney said he was thinking about it last January and then the coronavirus came. He said now he is thinking about next year. Dotson said they could honor first responders and the hospitals next year, as well.