By Kevin Hogencamp
Albany Mayor Willie Adams’ campaign manager and a business partner received a letter from City Attorney Nathan Davis this month – the second such letter in five months, ordering them to immediately repay $500,000 loan it received from the city for a failed housing development. Already, the developers have continually ignored the city’s request for required documentation on how the loan was spent on the project, which never got off the ground.
Davis gave Rod Mullice and Davey Gibson, developer of the proposed University Gardens apartments at the sand dunes on East Oglethorpe, 10 days to pay the entire loan amount to avoid attorney’s fees – and 30 days to pay to avoid a lawsuit. It is the second such letter that Davis sent to Mullice and Gibson; Davis sent an identical letter on March 10, saying in both letters that developers also must pay 12-percent interest on the otherwise low-interest loan due to its delinquency.
The $500,000 was loaned to the duo four years ago, about two years after Adams was elected, public records show. The loan terms required annual principal and interest payments, which have not been made.
Davis’ Aug. 9 and March 10 letters followed a Dec. 23, 2009 letter that he sent Mullice and Gibson demanding that they disclose how they spent the $500,000; upon request, City Manager Alfred Lott has not disclosed any records indicating that the city has received to response to any of city’s demand letters to Mullice and Gibson.
University Gardens was to be a companion project to the duo’s Enclave at Oglethorpe Development at the sand dunes. That project is off Frank Postell Drive, which was named after father of City Commissioner Tommie Postell after Tommie Postell aggressively pushed the project to fruition, and like Adams cast votes for the public financing and the project’s rezoning.
The loan and rezoning were recommended by Lott; the project is not related to the Cutliff Grove low-income housing development, which cost Albany taxpayers $364,000 — $136,000 less than the University Gardens project – also without getting off the ground.
Mullice, of Atlanta, was paid by Adams to run his successful 2004 mayoral bid over incumbent Tommy Coleman. Mullice then worked at city hall, helping Adams with the mayoral transition. Mullice also obtained consulting fees from the city shortly after Adams’ election.
Former City Commissioner Bo Dorough, who along with his colleagues did not object to Adams’ conflict of interest in voting to loan public funds to Mullice and to rezone property for his projects, raised the issue in 2007 when he resigned his seat and ran against Adams for mayor. Adams responded to Dorough’s questioning during a City Commission meeting by falsely claiming that Mullice did not work for him; public records say otherwise.
Following is the Aug. 9 letter Davis wrote to Mullice and Gibson:
The City has placed the above note with our office for collection. The City is the payee on the note. This is in response to University Gardens LP’s failure to make the June 30, 2010 payment.
Paragraph 4 of the note authorizes the City to declare the entire balance and accrued interest immediately due and payable upon a failure to comply to provisions. City does hereby exercise its option and declares the entire balance and accrued interest through date at the rate of 12 percent per annum to be now due and payable. The note makes time of the essence in the contract.
This notice is given to University Gardens LP pursuant to the provisions of OCGA 13-1-11, as amended to notify University Gardens LP that the provisions relative to payment of attorney’s fees as set out in the note in addition to the principal and interest will or shall be enforced and that University Gardens LP under OCGA has 10 days from receipt of this notice to pay the principal and interest without attorney’s fees.
In accordance with the provisions of the Fair Debt Collection Practice Act, we will assume the debt to be valid unless University Gardens LP sends us within 30 days of receipt of this letter written notice of its dispute of the debt of an portion thereof. Such notice should include specific information as to the nature of the dispute and the amount that is disputed. We will then obtain and mail University Gardens LP a verification of the debt or, if applicable, a copy of the judgment evidencing the same.
Please be further advised that should payment in full not be made, suit will be instituted against you for the amount claimed plus attorney’s fees and all cost of court. Finally, we may file suit against University Gardens LP prior to the expiration of the 30-day debt verification period noted above.
Please give this matter your IMMEDIATE ATTENTION.
Following is Davis’ Dec. 23 letter to Mullice and Gibson:
Re: University Gardens LP promissory note with The City of Albany, Georgia, dated June 30, 2006 and collateralized with 8.743 acres more or less, located in Land lots 239 and 240, First Land District, Albany, Dougherty County Georgia.
The above-stated promissory note to University Gardens LP in paragraph four provides that University Gardens LP will provide and furnish “… financial reports, statements, records and other documents which may be required …” by The City of Albany. Pursuant to said provision, on behalf of The City of Albany, I hereby request and demand that you provide documentation as to the expenditure of the $500,000 loan proceeds. A summary statement will not be sufficient. We require that you produce original documents showing the use of the said $500,000 loan proceeds. Such documentation must include canceled checks and invoices.
Article 3, Section 3.01 (a) and (b) of the Loan Agreement, executed by University Gardens LP in connection with the aforementioned loan, provides that University Gardens LP will execute such documents and other items that may be reasonably necessary as The City of Albany may require. In this regard, there is an error in the original promissory note executed by University Gardens LP. The promissory note provides that interest shall be paid annually and that the principal payments shall be made bi-annually. This is obviously an error, because the repayment schedule should be for annual principal and interest payments.
In March 2008, you were provided with a new promissory note to replace the prior one, but you never executed and returned the replacement note. I am again sending a revised promissory note, which I request and demand that you execute and return to me immediately.
A records check at the Dougherty County Courthouse indicates that University Gardens LP has executed a second security deed in favor of Capitol City Bank. I assume that this additional security deed was given for the purpose of securing an additional loan with Capitol City Bank. In this regard, please provide immediately the complete terms of any and all loans which University Gardens LP now has with Capitol City Bank, including documentation which will show the balance owed under any such loan or loans.
Please be advised that your failure to comply with the requests which I have made in this letter will constitute a default under the terms of the University Gardens LP promissory note and loan agreement with The City of Albany, and may result in foreclosure proceedings being instituted against the real estate covered by the City’s security deed.