The new Ball Ground Recycling plant on Ga. 5, financed by more than $18 million in tax-free industrial development bonds, is free to go ahead and take another business loan for its operation.
The bio-fuel and landscape material operation, owned by Jimmy Bobo, has drawn down just about all of the bond proceeds issued by the Cherokee County Resource Recovery Authority (CCRRA) in order to buy land and equipment to begin operation. That land and equipment are secured by the bonds – Bobo makes lease payments on the property equal to his debt service payment. The property remains the county’s until the debt is paid off.
Recently, Ball Ground Recycling asked to take out another loan, from Bank of North Georgia, to buy packaging equipment for its Wood-Tech operation, and Bank of North Georgia asked the county for permission to access the property to make sure equipment securing that new loan was tagged and marked.
The CCRRA, which is made up entirely of the members of the county Board of Commissioners, surprised that Bobo was asking for another loan, asked for an accounting of what Ball Ground Recycling had used proceeds from the industrial development bonds to buy.
On March 4, the CCRRA voted to issue permission for Bank of North Georgia to access the property to mark what its loan secures, after receiving a report on the operation from County Manager Jerry Cooper. The vote was 3-0, with members Buzz Ahrens and Derek Good absent from the meeting.
Bond counsel Earle Taylor, who originally issued the bonds two years ago, said he talked with Cooper and attorney Paul Dzikowski, of Jarrard & Davis, the county’s contracted law firm.
“The lease agreement says Bobo’s company can buy additional equipment and put it on leased land,” Taylor said.
Cooper showed authority members a spreadsheet that delineated how bond proceeds were allocated: Total spent on land was $3.7 million; total on closing costs was $903,523; total on site engineering, preparation and design was $2.7 million; total on miscellaneous landscaping, irrigation and dust control, $235,098; total on site work such as grading, paving and infrastructure, $4.6 million; total on buildings, $884,226; total on the fixed plant equipment, $4 million; total on portable equipment, $839,840; and total pre-bond interest carry, $323,765. The grand total is $18.3 million.
“This frees Bobo Grinding to finance some other equipment through other means,” said Harry Johnston, who serves as Post 1 commissioner. “The report is what we expected, there were no surprises, but we didn’t have a good list. This gives us a clear inventory.”
Cooper told commissioners that, right now, in a worst case scenario, if the business were to fail, it probably is not worth as much as has been spent on it to date.
“There’s always a risk with economic development projects,” Johnston said. “We knew that going in, but this business is solid, and the risk is low.”
Johnston noted Ball Ground Recycling already is bringing jobs. Both Bobo and Cooper have estimated the business eventually will employ around 100 people.
Johnston said moving the mulch off of Bobo’s former Wood-Tech site on Ga. 92 near Acworth is “slower than we like, but he will get it off there.”
The Development Authority of Cherokee County has bought that 53 acres as a future industrial park site.
“(The industrial park) is a great economic development venture,” Johnston said. “It’s a stone’s throw from the only Interstate 75 interchange in Cherokee County, and I think it will be the premier economic development site in Cherokee County.”
