VBT LDFA sets closed session in January for update on Visteon bonds

By Diane Madigan
Independent Special Writer
At the Dec. 10 regular meeting of the Local Development Finance Authority (LDFA) member Doug Peters said he would like a closed session as soon as possible to get a report on how long due diligence on the Visteon bond problem is going to take.
Peters also said there is no reason for a closed session until Attorney Kaveh Kashef from Clark Hill law firm can tell the LDFA when he is ready to file with the bankruptcy court to reopen Visteon’s bankruptcy.
Peters, an attorney, said he wants to hear Kashef predict Van Buren Township’s chances of success.
As in previous meetings, Peters said time is of the essence. He said until there is pending litigation, there will be no mention in Visteon’s annual report and the shareholders won’t know about the potential jeopardy to Visteon.
VBT Supervisor Linda Combs said a closed session will be scheduled for the regular 2 p.m., Jan. 14 meeting.
At its October meeting the LDFA asked the VBT Board of Trustees to instruct its counsel to file a petition to re-open the bankruptcy and initiate other legal action by November 30, 2013
Supervisor Combs said she has spoken with attorney Kashef, who is still gathering information.
She said, “Right now the ball is in Visteon’s court.” She said Kashef has asked Visteon what makes them think the shortfall isn’t going to be as great as VBT thinks it is.
Peters asked if LDFA Chairman Michael Dotson had made a presentation to the township board. He had not.
Supervisor Combs said she presented the LDFAs resolution to the board and they said, “Thank you very much.”
Peters said, “If Visteon is worried about overfunding, we can provide in the agreement that at the end of the bond term, any overfunding of the bond obligation will revert back to Visteon. We’re not trying to make money on the deficit.”
Plan B
LDFA member Richard Gavalier asked, “Is there is a Plan B should the litigation not get us what we need?”
Combs responded, “At this time we are pinning our hopes on negotiations and litigation.”
She said the funds run out with the first payment in 2018 and there is no backup
plan.
Gavalier described the situation as he knows it: The revenues that VBT was looking to offset the bond payments with were supposed to be coming from real and personal taxes collected on that campus.
Gavalier asked if VBT has given any thought to raising revenues by helping the current owners?
“This could be a win/win situation,” he said.
At this time Sovereign Partners, the current owners of former Visteon Village, has said the property is 100% leased, but it is not 100% occupied because Visteon has some space it is not using right now.
Peters suggested the VBT assessor look at the leases for hopefully a higher appraisal.
Gavalier asked the LDFA to start thinking about a Plan B before it’s too late.
Combs said the original intent was to have more buildings out there. She said the Wayne County EDGE people are looking for development on the township’s behalf and the Michigan Economic Development Corporation is also on board to assist the township.
Arthur Mullen, VBT Director of Planning and Economic Development, said “There’s been some interest but I’m not sure how serious it is and at what level I can even speak about it. I need to circle back with the contact person to see where they are and how the township can help them.
“That facility is a world-class facility,” said Chairman Dotson referring to the former Visteon Village. “It’s in the backyards of our residents. It’s all of our responsibilities to make sure everyone is aware that that facility is there and a great opportunity for any organization that wants to relocate into a wonderful location in a wonderful community. That is an absolute jewel in this community. We do need to look at the other side of the coin.”
Peters asked if Sovereign Partners has a broker that is marketing the property. Supervisor Combs said she would check and also check on whether the assessment is based on property or leases.
Peters said he hopes the community doesn’t look at Plan B as much as they look at pressuring Visteon to keep its word.
Budgets
The 2013 amended and 2014 proposed budgets were reviewed. In 2013, there is a decrease in interest income from the Visteon bankruptcy settlement. Also in 2013 there is deficit of $547,121 in revenues.
Due to an anticipated increase in property tax capture, in the 2014 proposed budget, there is only a deficit of $477,496 expected.
The LDFA fund balance, which includes the one-time Visteon bankruptcy settlement, totaled $7,778,231 in 2010 and is projected to be $5,767,201 after the 2014 bond payments.
Gavalier, financial controller at Ricardo Inc., headquartered in VBT, asked how the LDFAs fund balance funds are being invested and at what interest rate. Gavalier suggested the township bring someone in to review the account to see if they could get the considerable balance into a higher yield account.
Supervisor Combs said she will check with the township treasurer for the current rate of return and to see if it would be possible to transfer the funds.
Gavalier said a 1% increase on the return would get an additional $50,000 and reduce the amount the LDFA would need to take from the fund balance. Gavalier also suggested the LDFA get an appraisal on the Visteon site (now owned by Sovereign Partners) to see if it is assessed under fair market value.
Supervisor Combs said the assessor was working on that in September and October and she will speak with her.
The proposed 2014 budget was approved conditionally with the carryover of any unused 2013 attorney and consultant budgeted amounts. A modified budget is expected to be approved at the next meeting.
Change From Monthly Meetings
The LDFA discussed Director Mullen’s suggestion to amend the bylaws, changing the required monthly meetings to bi-monthly or quarterly.
Chairman Dotson said he’s done some research looking at the VBT LDFA agendas compared to other LDFAs that have a lot of projects, with continuous reviews and requests for approval of the projects and those LDFAs are meeting monthly or quarterly on an as-needed basis.
Dotson said the main item on their agendas has been the Visteon bond payments.
“I think it will be possible to give the supervisor and Mr. Mullen time to focus the majority of their time on that main item, working behind the scenes with the attorneys, as opposed to every month getting the agenda together,” Dotson said.
He proposed bi-monthly meetings and Chris Haynes agreed with bi-monthly.
Peters said bi-monthly instead of quarterly meetings are needed because if people are sick they may have a quorum issue. Missing a quarterly meeting would put the meeting off for half a year.
“I’d rather meet a little too much, than a little too little,” Peters said.
Supervisor Combs said she supports the bylaw change and Director Mullen will place the item on the next agenda for ratification.
Walking Trail
At past meetings, resident Barbara Miller had asked about the use of the public walking trail at Visteon Village (now called Grace Lake Corporate Center).
Miller had acquired documents under the Freedom of Information Act and found that the trails were supposed to be public, but were not noted in the township’s park listings as public trails.
Combs said she spoke with Sovereign Partners who told her the walking trails at Grace Lake are available for public use. Any complaints about usage should be addressed to Supervisor Combs’ office. She said details will be placed on the township website.
Dotson asked Director Mullen to make sure the trails are well marked for parking and entrance.
Attendance
The 50-minute meeting on Dec. 10 was called to order with a bare quorum.
Director Mullen announced that David Tyler is no longer working for Wayne County and no longer qualifies as an LDFA member.
Marcus Leon, a representative from Van Buren Public Schools, announced he was leaving VBPS for a position in Holland, MI, and would no longer be on the LDFA.
In 2013 there were five LDFA meetings. LDFA member Leonard Armstrong was absent three times and Charles Covington missed them all. In 2012, there were six meetings and Armstrong and Covington were both absent for four of those meetings.
There are ten members of the LDFA:
• Chairman Michael Dotson – Western Campus President, WCCCD
• Vice Chair Christina Hayes
• Leonard Armstrong, VBT business owner
• Charles Covington
• Richard Gavalier — Ricardo Inc.
• Marcus Leon – VBPS representative
• Karen Moffitt – VBPS representative
• Doug Peters – attorney, VBT resident
• David Tyler – former Wayne County employee
• Linda Combs, Supervisor VBT