Tuesday, November 6, 2007

11/06 - Senator calls for investigation of Jekyll deals

The Atlanta Journal-Constitution
Published on: 11/06/07

Sen. Jeff Chapman, whose district includes Jekyll Island, has asked fellow legislators and Georgia's attorney general to investigate financial deals between the coastal state park's governing board and developers.

In a letter to Jekyll's legislative oversight committee Monday, Chapman (R-Brunswick) wrote that a tax break given to one developer, and bond financing provided to another, may violate the state constitution.

He asked that the committee and Attorney General Thurbert Baker determine if the Jekyll Island Authority violated its mandate by allowing developers to build hotels and condos "priced beyond the means of most Georgians."

The Jekyll authority's plans "would eliminate a large segment of Georgia's population from enjoying their state park," Chapman said in a phone interview Monday. "They're proposing a big development scheme [that] is not the purpose of Jekyll Island."

Senate Majority Leader Tommie Williams (R-Lyons), a member of the oversight committee, hadn't seen Chapman's letter Monday. But he doubted his colleague's claim that the island's governing board violated the constitution.

Told of the letter's charges, Williams said "it sounds like what the board has done is in order. ... They did a great job in negotiating, and I don't see it as a gift to anybody."

Chapman has long opposed plans to heavily develop Jekyll. During this year's session, he shepherded legislation to protect the park's southern end. Monday's letter, Chapman said, lays the groundwork for another legislative challenge come January — if neither the oversight committee nor the attorney general sides with him.

Jekyll, a 7.5-mile long barrier island with modest accommodations, a convention center, historic district and 650 homes, is poised for roughly $750 million in development — hotels, condos, shops, parks and restaurants. Trammell Crow, one of the nation's largest developers, announced in August a $90 million hotel and condo project on the site of the Buccaneer Beach Resort.

The authority granted the developer a $10 million "rent abatement," which prompted one board member to label the tax break a "sweetheart deal." Chapman said the board may have violated a clause of the constitution prohibiting government agencies from giving "any donation or gratuity." He added that the authority will not receive "a value equal to the benefit granted" by the tax break.

David Egan, co-founder of the nonprofit Initiative to Protect Jekyll Island, agreed. "That's a highly attractive piece of land and very profitable," he said. "Supply and demand alone ought to tell you that we should not be handing out rent abatements on this piece of property that, quite frankly, a developer should pay a premium for."

Willliams, echoing comments made earlier by authority Chairman Ben Porter, defended the deal as common industry practice.

"Almost every new development will offer a graduated lease in order to get the tenant in and established," Williams said.

In September, the authority selected Linger Longer to develop a $352 million "town center" project. The Greensboro-based upscale builder proposes 1,100 hotel, condo and time-share units fronting the Atlantic Ocean. The authority would cover $84.5 million in bonds for new roads, parking and a convention center.

Chapman said the gratuities clause also prohibits state agencies from forgiving "any debt or obligation owing to the public." He wants the attorney general to determine the legality of selling taxpayer-backed bonds that would benefit a private developer who leases land from the authority.

"There is no justification for such a financial proposal in view of the attractiveness of the site to be redeveloped [and] the size of the profits to be enjoyed by Linger Longer in selling condominiums on publicly owned land," he wrote.

Chapman's goal, he said, is to ensure that the state park remain accessible to "average Georgians," as state law dating to the 1940s mandates.

Linger Longer's plans to include only 125 (out of 725) "economy" hotel rooms defies the state park's mandate, Chapman, Egan and others say. So does Trammell Crow's plans for hotel rooms that could top $250 a night during peak season. Board members say more affordable rooms will be built, but not necessarily on the beach.

"I get the impression that the authority wants to fine-tune an economic engine as opposed to managing and preserving a natural resource for the recreation of all Georgians," Chapman said.