Both spar over deal to sell and leaseback Public Safety Facility
Gary 411
After gaining city council approval for her financial recovery plan, Gary Mayor Karen Freeman-Wilson is getting pushback from her successor, Jerome Prince, who will be the next mayor January 1 after a Republican opponent failed to run against him in the November election.
Freeman-Wilson is excited about plans to sell the Public Safety Facility and lease it back from the buyer, but Prince is calling it a bad deal.
Prince issued a statement saying the $35 million the city will receive from its sale leaseback of the Gary Public Safety Facility “…is like trying to close a wound with a Band-aid. I cannot in good conscience recommend this to the taxpayers of Gary.”
Mayor Freeman-Wilson has said her recovery plan would place the city on a solid financial foundation for years to come instead of being broke at the end of 2019, leaving the incoming administration with no ability to meet payroll, insurance, utility and other vendor payments.
Prince came up with different figures than the mayor on the proceeds and the payback of the loan. “Over $31,121,328 in interests is too much to pay for a loan that only financially helps the City get through the remainder of 2019, and it would obligate and limit the City’s use of casino revenue and local income tax revenue for the next 20 years.”
Following the Prince press release on the sale leaseback, Mayor Freeman-Wilson issued this statement. “I am very disappointed at what seems to be political posturing at a time when governance of the city is critical. Despite repeated attempts by me, the Gary Common Council and members of our administration to provide detailed financial information, Mr. Prince has refused to engage in a meaningful dialogue for the purposes of making an informed decision.”
Terms of the loan call for the city to pay $3.5 million a year for the next 20 years. The debt will be repaid with revenue from Lake County’s Local Income Tax. The city’s share of LIT revenue yearly has come in close to $4.7 million.
“That is more than sufficient to cover the annual loan repayments,” Mayor Freeman-Wilson said. “The casino revenue is not a primary source of repayment but additional security for investors. Casino dollars would still be available for use by the Prince administration. This is not an additional property tax burden to homeowners or businesses.”
