- Paris Flash
- Real Estate
By CHARLES RICHARDS
A potential hang-up in the pending sale of the Sara Lee facility to a new buyer disappeared Tuesday when Liberty National Bank of Paris officials agreed to handle the financing without requiring that the Paris Economic Development Corporation guarantee much of it.
The PEDC had agreed in a special executive session Monday morning to approve “a guarantee and payback agreement — a guarantee of a portion of the loan, a little over 50 percent,” PEDC executive director Steve Gilbert said.
“The PEDC exposure would not exceed $1 million,” Gilbert said.
As attorneys from all sides worked on the details remaining before a probable Friday closing on the deal, it was discovered that the Paris City Council would also be required to sign off on the loan guarantee.
Mayor AJ Hashmi said the council was concerned because incentives to new companies are supposed to be linked to new jobs, and as a redevelopment company the new owner would not itself bring any new jobs to Paris.
In an executive session at the end of its meeting Monday night, the council agreed to call a special meeting at 11:30 a.m. Friday to act on the PEDC’s loan guarantee – a promise to assume the debt obligation should the new owner of the Sara Lee facility default on its loan to Liberty National Bank.
But the council also told Gilbert it wanted “further information about jobs creation from this potential source that is trying to acquire the Sara Lee Plant,” Mayor AJ Hashmi said in an interview with eParisExtra! On Tuesday night.
During the day Tuesday, as Gilbert sought to come up with a business plan from the new buyers, Liberty National Bank informed the PEDC that it would handle the financing without requiring a loan guarantee from the PEDC.
Friday’s special meeting of the council was then canceled.
The sale should be complete by Friday, and company officials will make themselves available at that time — perhaps by a conference call — to talk about who they are and what their plans are in the immediate and long term for the facility,” Gilbert said.
“The company we are working with, they have a lot of experien ce at re-developing property just like this, and they indicated to us this property is in excellent shape. It’s a facility that’s at the standards of a Fortune 500 company,” Gilbert said.
“So we’ve been working with the company in anticipation of them buying this, and connect them with potential tenants. This is all ongoing.”
Although the new owners won’t themselves provide new jobs in Paris, they will own the Sara Lee plant and will find as tenants one or more companies who will provide jobs, Gilbert said.
“Everybody’s first choice is to find a tenant that could come in and operate this facility in food process — bakery or bread-making, that type of thing. The company that’s purchasing the facility understands that, and they’re working to try to achieve that.”
The search for tenants could take “six months or eight months or 12 months,” Gilbert said, “but the company’s objective will be to find a tenant or multiple tenants — which ultimately will be jobs. And we’re very positive about that,” Gilbert told eParisExtra! on Monday.
Hashmi said the PEDC’s success in attracting a new owner for the Sara Lee plant is good news for Paris.
“Down the road, if they show (the new owners) show they are doing something for the city and make improvements … I think if they need a guarantee or some other incentive, then they should get it,” the mayor said.
The Sara Lee facility on the north loop at Northwest 19th Street shut its doors in November of 2010 — eight months after announcing that it was planning to lay off 260 employees, more than half its Paris workforce.
“Since the Sara Lee Corporation announced the last round of layoffs in the plant closure, it’s been very difficult to have any communication with their corporate headquarters,” Gilbert said.
Then, several months ago, Sara Lee listed the property with a commercial real estate broker, Collier International, out of Dallas.
The PEDC immediately began working with that broker to try to market the facility, Gilbert added.
“When Colliers listed the facility, that put it in the marketplace with nationally corporate real estate, so it popped up on people’s radar, and there were numerous interested buyers that came in, and we hosted them, and we did walk-throughs, and all of those things, working with the broker, trying to find a tenant for the facility.”
Last month, the PEDC met with Liberty National Bank representatives regarding the acquiring company’s financing.
“And so the PEDC was asked to approve a guarantee of collection for the financing of the Sara Lee acquisition,” Gilbert said.
“In the last week, we reviewed everything, and we basically have reached agreement with the bank and all the parties. In all, there are about seven or eight agreements.”
Attorneys still have a few things to work out “between all the lawyers,” Gilbert said.
Later this week, “they’ll give us the OK and then the PEDC can execute the agreement,” he said.
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