VBT board to announce decision on Visteon bonds, possible litigation

An open work-study session of the Van Buren Township Board of Trustees will be held at 4 p.m., April 2, in the Otisville-Sheldon Room of the township hall to announce the board’s decision on what to do about refinancing of the Visteon bonds.
VBT Supervisor Linda Combs announced the meeting at the March 10 meeting of the Local Development Finance Authority.
She said after that’s held, she’ll give a written report to board members who couldn’t attend.
When asked if there was a public decision concerning possible litigation against Visteon, Supervisor Combs said, not yet, but will be public as of April 2.
She said litigation would just be a decision of the township board and the LDFA would not be involved.
The bonds issued by the township to help Visteon develop Visteon Village were $25.8 million. By the time the bonds are paid off in 2032, the amount for principle and interest will be $56 million, which is guaranteed by the full faith and credit of the township.
In the 2012 Visteon Settlement Agreement there is a provision which was to be assigned to successors or assignees for the Grace Lake Corporation and they agree to come to the table to negotiate any shortfalls in the funds to pay off the bonds.
The Visteon property at Grace Lake has since been sold, although Visteon remains as a tenant.
The township board has been meeting in closed-door sessions to discuss options to the situation which appears to have the township running out of funds to pay the bonds in 2018.
At its Dec. 16 regular meeting, the VBT Board of Trustees voted unanimously to re-pledge the township’s full faith and credit to help refinance the 2006 bonds sold by the LDFA to cut interest rates.
The LDFA would save about $1.8 million since the interest rate would go from the present 8% to 3% or thereabouts.
The 2006 bonds are callable this spring and so they can be refinanced.
The resolution the LDFA passed gives authority to two people – LDFA Chairman Michael Dotson and VBT Supervisor Combs – to be able to act quickly as individuals or together to approve the sale of the refunded bonds over the next few months to take advantage of a low-interest offer.
Although it had not been officially announced, the VBT board members talked about possibly “paying down” the bonds this spring to help reduce bond payments, but that has to be done at the same time the bonds are refinanced
In other business at the 40-minute meeting March 10, the LDFA:
• Heard John Delaney from the audience protest the convening of the meeting since there was not a quorum of proper members;
• Introduced new member Shareen Barker, who replaced Robert Carlesso, representing the Van Buren Public Schools. Barker had not been voted in by the VBT Board of Trustees and Delaney was told that was not necessary. He disagreed;
• Extended the terms of James Williams and Doug Peters to Aug. 12, 2018, although Diane Madigan said they had already had new terms approved by the township board. (The Independent report of the Sept. 16 meeting shows Williams and Peters were reappointed at that meeting to terms ending Aug. 12, 2018.) Jack Knowles, who started in January as VBT director of planning and economic development, said the notes he has say their terms are expired. Supervisor Combs said they will double-check and possibly there was an error in record keeping;
• Re-elected Michael Dotson for another year as chairperson and Leonard Armstrong for another year as corresponding secretary, although Armstrong was absent. Doug Peters was elected vice chairperson to fill the position formerly held by Charles Covington;
• Approved the township soliciting bids for the acre of property on Ecorse Road that the LDFA ended up owning from the widening of Ecorse Road. The long piece of property with a narrow depth has a drain running through it. The LDFA got an appraisal and that is sealed and will be kept sealed until the bids come in by the next LDFA meeting in May;
• Discussed the three LDFA vacancies: Soverign Partners, Ricardo Industries, and Wayne County. When someone asked if Bryce Kelley wasn’t coming, he was told Kelley no longer works for the county due to the new CEO. Combs said she would look into getting representatives from Coca-Cola, Meijer’s, Chase or DTE. “I’ll look at the map and see who adjoins the LDFA area. It’s in their best interest to develop the property,” Combs said, referring to Grace Lake; and
• Heard Delaney state that Armstrong missed 80% of the meetings over the years and now he’s been elected as an officer. He was at the January meeting, but before that he missed three or four. “It needs to be looked into,” Delaney said. The LDFA has a real big problem, he said. He said the bylaws say after two missed excused meetings you’re out. Combs said they could revoke Armstrong’s appointment, but then the LDFA wouldn’t have enough members to have a meeting.
The current eight members of the LDFA are Chairman Dotson, Corresponding Secretary Armstrong, Vice Chairperson Peters, Covington, Chris Hayes, Williams, Barker, and Combs. Under state law, 11 members are needed for an LDFA.
LDFA votes declared void
At Monday’s work/study session of the VBT Board of Trustees, Supervisor Combs said the actions taken at the March 10 LDFA meeting are void and they will be retaken at the next meeting of the LDFA.
“I understood the school appoints their representative, but it was approved by the township board… I stand corrected,” Combs said, adding the votes taken to advertise to sell the property and to elect officers were not proper.
Delaney said since 2006 the board has been appointing people. He said in November, the board did not approve Bryce Kelley’s appointment by the county and asked the county to appoint someone else.
“You have yet to approve the person from the school,” Delaney said, adding Knowles told him the school appoints and you have nothing to say, but that is wrong.
Delaney said, “We’ve been short three for a long time. There are only seven on the list and there should be 11.”
He also said attendance is a big problem, and, “If you don’t attend, you’ve got to go. We’ve got a big problem at the LDFA and need members attending.”
Trustee Jeff Jahr requested a formal legal opinion on appointments to the LDFA and also to the Downtown Development Authority.
Township attorney Patrick McCauley was in the audience and he said he would be happy to do that. Combs agreed with the request.
“It shouldn’t be based on what we’ve been doing in the past,” Jahr said.