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Story Archives: Tightlipped over money — OEDC Land Corp. mum on bank records


Tightlipped over money — OEDC Land Corp. mum on bank records
by Michael DeVault - posted Wednesday, April 23rd, 2008 @ 10:03 pmE-mail Story E-mail Story | Print Story Print Story 
Officials with OEDC Land Corp. refused to disclose the names of the financial institutions that are holding some $3.5 million the land corporation received from the sale of the old State Farm office building and property in Monroe.

The land corporation sold the State Farm building and site to the state of Louisiana in 2006.

Ben Peters, president of OEDC Land Corp., said the land corporation is a private, non-profit entity. He said it is not subject to public records laws. Furthermore, he said it is not required to reveal the names of the financial institutions in which OEDC Land Corp. deposited its money.

"We have a written investment policy and a committee which reviews standards and financial statements of depository institutions making recommendations to our board," said Peters.

Peters e-mailed that statement to The Ouachita Citizen earlier this week.

"The treasurer is in charge of placement and generally seeks rates from several institutions doing business in Ouachita Parish, placing funds as available with the highest rate provider," Peters stated in the e-mail, while noting six banks in Ouachita Parish are holding the land corporation's money.

David Woolridge, general counsel for the Louisiana Press Association, disagreed with Peters' position.

"It is my belief that OEDC Land Corp. is required to comply with La. Revised Statute 33:9024 E(2) and make available for inspection and copying all of its books and records with respect to the use or receipt of any public funds," said Woolridge, who works in the Roedel, Parsons law firm in Baton Rouge.

"It is also my belief that any meetings held by OEDC Land Corp. with respect to the receipt or expenditure of funds received from the state must comply with the Louisiana open meetings law," Woolridge said.

"Any failure by OEDC Land Corp., after having received state funds from the sale of the State Farm property, to comply with La. Revised Statute 33:9024 E(2) does not pass the smell test," Woolridge said.

OEDC Land Corp.'s treasurer is Malcolm Maddox. Maddox is regional manager of Capital One Bank for northeastern Louisiana.

In addition to Peters and Maddox, OEDC Land Corp.'s board of directors consists of a number of area business and civic leaders.

They include Wade Bishop, V. Gerald Dean (secretary) Joe Holyfield, Otis Jones, Bill Kight, Bill Nelson, Van Pardue, Pat Regan, John Schween and Isaac White.

Interest income earned from the $3.5-million sale of the State Farm building is being used to fund a significant portion of operations at Ouachita Economic Development Corp.

The OEDC Land Corp. actually possesses the money generated from the sale of the State Farm site. The money currently is yielding about $120,000 a year in interest income.

The OEDC Land Corp. is a separate entity of OEDC. The land corporation was created after State Farm donated its building and property to OEDC a couple of years ago. OEDC later transferred ownership of the State Farm building and property to the land corporation.

Shortly after State Farm announced in 2004 it was closing the doors on its Monroe operations, representatives of OEDC met with State Farm executives. They wanted State Farm to donate its building near Interstate 20 in Monroe to a local concern, namely OEDC.

Former OEDC president Joe Holyfield said the idea to acquire the building from State Farm for OEDC developed after he saw news reports concerning State Farm's plans for the facility.

"It hit the news and I was thinking about how -- when I went to the (OEDC) meetings -- there was no funding in OEDC," Holyfield said.

Holyfield said he and other members of the OEDC board felt the facility could be used to provide stability and independence to OEDC's funding sources, either through leasing the building to potential employers or by selling it outright.

Shortly thereafter, members of the OEDC board of directors met with business and government representatives at a conference at the University of Louisiana-Monroe. Conference participants included then-Gov. Kathleen Blanco, the mayors of Monroe and West Monroe and a number of other political and business leaders.

At the conference, OEDC leadership laid out their proposal to pursue the donation of the State Farm building to OEDC for economic development purposes. The plan was met with optimism.

Holyfield said convincing regional business and political leaders of the value of donating the building to OEDC was a first step.

"Once they bought into it, we sat and met with the State Farm people," Holyfield said. "Obviously, they were a little reluctant at first, but they eventually saw it was the right thing to do."

State Farm announced the donation in late 2004.

In 2005, the OEDC board of directors created OEDC Land Corp., a separate 501(c)3 non-profit Corp. dedicated to managing any proceeds gained from the former State Farm building.

OEDC Land Corp. president Ben Peters said one reason OEDC's board of directors created a separate entity to manage the building is that they did not want the building to become part of OEDC's financially.

Instead, Peters said board members wanted to use the building to support the mission of OEDC -- pursuing potential employers and real economic development opportunities.

"They also did not want it to interfere with existing public funding received by the OEDC at the time the transaction was contemplated and thereafter including annual state funding requests," Peters said.

After the state certified OEDC Land Corp. as a non-profit corporation, OEDC transferred title for the State Farm site to OEDC Land Corp., which held the building until early 2006.

That's when Blanco administration officials announced they wanted to use the site as a permanent home for Louisiana Delta Community College.

The administration said at the time that the State Farm facility would be razed to make way for the construction of a state-of-the-art facility to house Delta.

The state bought the State Farm property for $3.5 million in 2006 to fulfill Blanco's promise of securing a campus site for the community college.

Blanco administration officials planned on demolishing the 25,000-square-foot building and construct an entirely new campus on the property.

That proposal ran into opposition locally among some elected and business leaders who argued the State Farm property should be utilized to attract new business and industry to the region.

Also, Blanco's own secretary of economic development Michael Olivier came out against tearing down the building to make way for Delta.

Olivier said he had been working with a number of potential tenants for the building and felt, with time, one of those employers would locate there.

Under pressure from members of the local business community, Blanco shelved plans to demolish the structure.

In late 2006, the state, in conjunction with the city of Monroe, announced Accent Marketing had selected the site to house a call center operation, bringing with it the possibility of creating some 550 new jobs. Accent is operating in the old State Farm building today, employing roughly 400-450 people.

In the meantime, officials with OEDC Land Corp. looked for avenues to use the $3.5 million it received from the sale of the State Farm site.

The land corporation pledged $500,000 of the money as incentive to secure the Accent Marketing call center.

OEDC Land Corp. has not turned over the $500,000 to the state for the Accent incentive package because the state has not requested, according to an official with the Louisiana Economic Development Corp.

OEDC Land Corp. also offered to assist the Greater Ouachita Port in its attempts to secure funding to buy a crane for the West Monroe port.

Though the land corporation offered to underwrite a $500,000 line of credit for the port to buy the crane, Regan said the loan was never made because port officials secured the loan from a traditional lender. The Ouachita Parish Police Jury also contributed money for the port to buy the crane.

Meanwhile, OEDC representatives are constantly searching for potential economic development opportunities throughout northeast Louisiana, Peters said.

While the search for potential employers continues, the $3.5 million has been deposited in a number of area banks in interest-bearing accounts, Peters said.

Also, the majority of expenditures of funds held by OEDC Land Corp. have been limited to operational expenses for OEDC, according to independent audits of OEDC.

Peters said that was the idea behind placing the money in interest-bearing accounts.

According to the bylaws of OEDC Land Corp., all expenditures of OEDC Land Corp. money must be approved by its board of directors, including any budgetary contributions to OEDC.

Holyfield said OEDC Land Corp.'s board of directors always intended to provide assistance by funding OEDC operations.

"We've helped OEDC itself through yearly operating funding," Holyfield said.

Regan said OEDC Land Corp.'s contributions will account for some 44 percent of OEDC's 2008 budget.

Apart from the annual contribution to OEDC operations, Holyfield said OEDC Land Corp. would wait until the right time and for the right opportunity to spend the $3.5 million.

"I'm sure when the time comes and the opportunity is there, we'll do something very affective with it," Holyfield said.


(Sam Hanna Jr., publisher of The Ouachita Citizen, contributed to this report.)
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