VBT board approves Visteon settlement at special meeting

After a 35-minute closed-door session on June 13 with attorney Rick Berg, the Van Buren Township Board of Trustees voted unanimously to approve a resolution to settle the year’s-long dispute between the township and Visteon Corporation.
No details were available yet, but Resolution 2023-13 read: “To approve the Term Sheet settlement between Van Buren Township and Visteon and authorized legal counsel to negotiate the provisions of the final Settlement Agreement and the Supervisor to execute the Settlement Agreement.”
The settlement came after court-ordered mediation. Supervisor Kevin McNamara said he and Trustee Bryon Kelley, an attorney, were part of the mediation team.
“It’s been a long road and we’ll keep on” moving forward, Supervisor McNamara said after the brief public meeting, referring to the work that still needs to be done by the attorney.
He said details of the settlement will be announced as soon as possible.
The township’s Local Development Finance Authority (LDFA) was formed to finance and construct eligible public improvements for the Visteon Village project which was completed in 2004. In order to complete the public improvements, the LDFA established a development plan and tax increment financing plan which identified the improvements, estimated the costs of the improvements and estimated the amount of tax revenue the authority would capture based on the proposed improvements.
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. Those public improvements have been completed.
The primary focus of the LDFA now is the payment of the debt obligations as a result of those public improvements.
Due to economic conditions the LDFA will not capture sufficient tax revenue to cover scheduled debt service and due to the shortfall, which occurred on Oct. 1, 2019, the LDFA was loaned $700,000 on Sept. 4, 2019 by the township to assist with bond payment.
In accordance with the loan agreement between the township and the LDFA, $900,000 was loaned to the LDFA in March, 2020. An additional $800,000 was loaned to the LDFA in September, 2020.
Also, $1 million was loaned to the LDFA in March, 2021 and $775,000 more on Sept. 1, 2021. Another $1 million was loaned to the LDFA in March 2022 and another $1 million in September 2022. The agreement calls for additional loans each April and October going forward.
As of Dec. 31, the township had loaned the LDFA $6,175,000 and accrued $100,058.85 in interest. It will more than $8 million in October.
The LDFA and township pursued the legal action against Visteon because of this ongoing shortfall. It began in 2018 when it was obvious there was going to be a shortfall, the cases went to the Michigan Supreme Court and back. The problem was the courts saw no damage to the township until the shortfall kicked in.