Commission asks Bells to make good on returned check
Published 10:31 am Thursday, November 29, 2012
By Fred Guarino
The Lowndes Signal
The Lowndes County Commission voted unanimously Monday night to send a letter requesting the Bells (Karl and Helenor) make good a returned check for $500,000 or face legal action.
The checked referred to was dated July 12, 2011 on a Hayneville Plaza LLC, First Citizens Bank account, made to the Lowndes County Commission for $500,000 marked “loan to pay bond,” and signed by Karl Bell. It was returned stamped “insufficient.”
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At the time, Bell was owner of the Hayneville Plaza, which was later purchased by the county for use by the South Central Alabama Broadband Commission in connection with the broadband project for eight central Alabama counties that later had its federal grant terminated.*
“I would like to motion that on the returned check on Bell, the situation, that we get the attorney [County Attorney Hank Sanders] to draft a letter to be submitted to them giving them 14 days to reply. If not take legal action,” Commissioner Brenson Crenshaw said.
Commission Chairman Robert Harris restated the motion, and was seconded by Commissioner Carnell McAlpine, “We go on record asking the attorney to send a letter to the Bells for the check to be made good on within 14 days.”
When asked about the action, Commissioner W. Dickson Farrior said that if the check is not made good, “we’re going to file a civil lawsuit.”
When contacted for comment on the commission’s action, Karl Bell deferred to attorney Michael G. Strickland of Strickland & Kendall LLC to respond on his behalf.
“Per our conversation on November 27, 2012 that I would be responding to the Lowndes County Commission’s vote to ‘write the Bells a letter asking them to make a returned escrow check good in fourteen (14) days or face a civil lawsuit.’ I must point out to you that my clients have not received such a letter so I believe that it is premature to provide an official response,” Strickland wrote.
In June 2011, the Lowndes County Commission voted three to two over the objection of commissioners Farrior and Joseph Barganier to float a $3.5 million bond to purchase the Hayneville Plaza Building, which was appraised at $3.2 million.
The difference between the bond amount and the cost of the building included a deposit into the reserve fund, capitalized interest, a premium for municipal bond insurance, underwriter’s discount, other expenses and insurance and additional proceeds.
The official bond statement was approved subject to two agreements being executed, Sanders said at the time.
Sanders said one was a real estate lease agreement between Lowndes County and the Broadband Cooperative District that will provide for rent of the building to go toward payment of the bond. The other was an agreement between South Central Alabama Broadband Cooperative District, Karl Bell, owner of the building, and Lowndes County that $500,000 of the bond proceeds would be set aside to pay that.
Sanders said at the time that the county would have no responsibility for paying the $500,000 or the interest.
In January of this year, the Lowndes County Commission voted three to two over the objection of Farrior and Barganier to approve a compromise to return a $500,000 check to Karl Bell and reportedly borrow $250,000 in connection with interest on bonds floated by the county to purchase the Hayneville Plaza.
The commission later voted to reconsider that compromise.
*Editor’s clarification: An earlier version of this story and the print edition of The Signal referred to the “now-terminated broadband project.” The federal funding of the project to provide a broadband network to eight south central Alabama counties has been terminated, but the South Central Alabama Broadband Commission (SCABC) is continuing efforts to move forward with the project.