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Downtown Development Authority requests up to $300,000 loan; council presses for documents and contingency planning
Summary
The Downtown Development Authority asked the city for a short‑term loan of up to $300,000 to cover debt service and operating costs tied to the city center project; DDA cited unexpected remediation and legal costs and said proceeds from a planned property sale (expected July/August) would repay the loan. Council members demanded greater transparency, written contingency plans, and more regular DDA briefings before approving any loan terms.
The Downtown Development Authority requested a short‑term loan from the City of Chamblee of up to $300,000 to cover debt service and operating expenses tied to the city center project.
The DDA chair told council the shortfall stems from unanticipated transaction costs associated with the Pierce properties, including higher legal fees and the discovery and removal of underground storage tanks during remediation. The DDA said it expects to repay the loan from proceeds of a sale of the city center properties, which the DDA anticipates will close in July or August; the DDA framed the shortfall as a unique event it does not expect to repeat.
Council members pressed for detailed documentation and contingency planning. One councilmember said the DDA employs an expensive outside lawyer and asked for records showing the decisions and cost drivers that led to the shortfall; another emphasized this is "the people's money" and said the council could not authorize a loan without a paper trail and clearer answers about what would happen if the sale does not close.
The DDA said monthly interest‑only debt service on its two loans amounts to slightly less than $30,000. Staff told council the city attorney is drafting an intergovernmental/loan agreement (IGA) and that staff proposed a 5% interest rate with installment payments of $50,000 per month until the $300,000 cap is reached.
Council members asked for more frequent DDA updates at council meetings, greater involvement of city staff (including the economic development director), and a written plan spelling out options if the anticipated sale is delayed. No loan agreement was adopted at the work session; staff will return with contract language and documentation for council consideration.
