Mike Klein Online

Washington, Georgia Hotel Project Will Get No Public Money

Mike Klein

The Washington, Georgia city council has decided it will not appeal a circuit court judge’s ruling that prevented the city from selling $8.1 million in municipal revenue bonds to finance construction of a hotel alongside its under-performing Pope Center. The city would have been obligated to $17 million in principal and interest repayments over 30 years.

The project was controversial from its outset. Washington city officials said bond debt would be retired by revenue from the hotel – conference center. Opponents said the project would not break even.  They feared that the city’s general revenue fund would be stuck with the bill, meaning local taxpayers.

Toombs Judicial Circuit Judge Harold A. Hinesley strongly agreed with the citizens group when he ruled in late October that the city “abused its discretion in relying on an obviously flawed feasibility study.” Hinesley said “glaring deficiencies” in the city’s proposed model resulted in “defective and unreliable” conclusions about “the feasibility of the project.”

Washington could have appealed Hinesley’s decision to the state Court of Appeals but last week it voted 4-0 to forego an appeal. “There are some fairly relieved people over in Washington,” said William deGolian, one of several attorneys who represented the citizens.

DeGolian said Hinesley’s ruling was so strong that reversal would have been unlikely. “The other factor had to be cost,” he said, adding, “It would have been very, very expensive” for the city to file a challenge before the state Court of Appeals.

Washington could still pursue construction of a conference center hotel financed with private capital but Hinesley’s ruling and the council decision to forego an appeal means the small community will not be allowed to obligate public monies to a seriously flawed business venture.

Mike Klein is Editor at the Georgia Public Policy Foundation.

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December 13, 2010 - Posted by | Uncategorized | , , , ,

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