The state audit shows that last year, $697,637 and $142,105 were used from the county fund to make two separate bond payments. So it looks like LCA owes the county just over $1 million with the latest shortfall.
LCA officials could not be reached for comment.
Each month, LCA takes in revenue from two sources, a facilities charge from commercial activity and a property assessment charge. Those revenues are designed to provide the funding necessary to cover bond payments. The county TIF is only used if those revenues are inadequate.
The audit shows revenues from those sources totaled $1.376 million last year, and the bond payments due were about $2 million.
RELATED: ‘Too many land mines’: Liberty Center payment shortfall explained, new fee coming
The change of management teams appears to have caused an issue in collecting assessments from property owners. Apollo Commercial Real Estate Finance Inc., which provided a $165 million construction loan for the mega mixed use project, switched management of the retail side of the development from Steiner + Associates to JLL last fall. Steiner is continuing to develop about 60 acres adjacent to Liberty Center.
Mall Manager John Taylor said previously that officials have faced challenges gaining access to all the financial information they need from a “lock box” account of revenues coming in.
“We don’t have the online access to drill into it,” Taylor has said. “We have the overall statement that we have a total amount each month that we have been getting via mail from Steiner.”
The LCA board passed a resolution in June to levy a “core retail valuation” charge on Liberty Center property owners to cover a $140,000 shortfall from December, about which board members said they did not receive notice.
When county-appointed members of the volunteer board said they were surprised by the shortfall, John Turner, a consultant for Apollo, expressed disbelief.
“This is what I’m a little confused about is all the surprise, because there is amortization kicking in on the bonds that had nothing to do with the revenue stream,” Turner said.
Board member John Kirsch noted members of the board are all volunteers. The structure of the massive development deal is extremely complex, and members need others to help them keep track.
He said the board had asked Steiner to help them understand the “waterfall” of funding mechanisms, but apparently that never occurred.
“We had requested from Steiner, help us understand the waterfall of the cash flow for all the bonds this authority is responsible for, we have a limited scope of authority here, it’s not universal,” Kirsch said.
The board also approved expanding the role of accounting firm Clark Schaefer Hackett.
“This has gone on for awhile, and we keep finding land mines,” Chairman Phil Morrical said at the meeting. “I don’t know why we keep finding land mines, but they are hindering our operations as a board. Again I’ll say what I’ve said three times already, I’m uncomfortable with it, I think it will be more stabilizing for us to what we’re proposing here.”
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