Fresh Loaf

Paul Donsky of the AJC reports that Wachovia Bank has filed a lawsuit against Wayne Mason, the Gwinnett County developer who in 2008 made a windfall off Beltline property in Northeast Atlanta. The lawsuit stems from a $7.5 million loan that Mason took out in 2004 to buy three units in Buckhead medical office building.

According to the lawsuit, filed Monday in U.S. District Court in Atlanta, Mason failed to pay $7.07 million remaining on the loan that came due in February. The lawsuit names both Mason and a company he controls, Lone Pine, as defendants.

In a statement issued through a spokeswoman, Mason said he received a copy of the complaint Wednesday afternoon.

“Our lawyers will be reviewing its allegations and we’ll respond accordingly,” he said.

Documents included in the lawsuit say Mason and Lone Pine borrowed the money to buy three units at the Palisades at West Paces, a medical office building near I-75 and Northside Parkway. The lawsuit did not say what Mason did with the property.

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The AP’s Russ Bynum writes an excellent piece that helps explain why Georgia has found itself at the tippity top of a terrible list — the state with the highest number of bank failures:

Experts say it’s a combination of an antiquated state law that favored a plethora of smaller community banks over multi-branch giants; a population explosion in metro Atlanta that fueled massive suburban real estate development and a crush of new banks formed to cash in on the Atlanta boom shortly before the market tanked.

…

Georgia’s diversity of small banks was an asset when the economy was strong, with consumers benefiting from competitive rates and broader sources of credit, said James Verbrugge, a professor emeritus of finance at the University of Georgia’s Terry College of Business. It became a liability when the bottom fell out of the housing market and smaller banks had less capital to weather the crisis.

The excerpts don’t do the article justice. Give it a read for your daily dose of edumacation.

(Hat tip to Travis Fain)

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In late 2007, Georgia Tech professor Dan Immergluck released a study that added numbers to a sneaking suspicion: Property taxes were rising fast along the southern half of the Beltline, the 22-mile loop of parks, trails and transit planned to circle Atlanta’s urban core, and posing a problem for longtime residents unable to afford the uptick.

The study served as a reminder that for all its promises of parks, streetcars and smart-growth development, the Beltline could potentially cause displacement and gentrification — and have a negative impact on the neighborhoods the project is designed to help.

Immergluck’s followed up the study with Foreclosed!, a new book about the origins and aftershocks of the nationwide housing market meltdown.

(more…)

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Travis Fain, one of The Macon Telegraph’s best muckrakers who also blogs at the hilarious Lucid Idiocy, has parachuted into Atlanta for the legislative session. Fain ran into some Houston County bigwigs and asked why they think Perdue took out a $21 million loan last September.

Today I spoke to one man who I consider just about as plugged into the business establishment in the Warner Robins area as you can be. And he said he’s talked to everyone he can think of, and can’t get a whisper of fact about what that loan was for.

Since taking office, the governor has both managed the state and his two agribusinesses. Last month, the AJC reported Perdue secured the loan for his two agribusinesses on pretty extraordinary circumstances just as credit markets were tanking. He’s declined to tell the public why he took out the loan or how he plans to repay it.

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Remember the AJC’s story about Gov. Sonny Perdue’s $21 million loan? He borrowed the cash from a small bank in Perry, Ga., for his two agricultural businesses, which, unlike previous governors, he’s opted to continue running while he also manages a state of 9 MILLION PEOPLE. Repayment of the loan, the article said, is due in March.

Perdue’s office told the AJC that he wouldn’t disclose the specifics of the loan. The Athens Banner-Herald’s editorial board has laid down the funk on Perdue for his tightlipped behavior.

Retrospective, you say? I love retrospectives!

(more…)

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It’s not just the state’s $2.3 billion budget deficit that’s giving Gov. Sonny Perdue a headache.

The AJC’s Alan Judd reports that the clock is ticking for the governor to repay a $21 million loan given to him last September by a small bank in Perry, Ga. Perdue borrowed the money for his two agricultural businesses. (Since taking office in 2002, the governor has differed from his predecessors in that he still operates his businesses rather than placing them in a blind trust. The strategy seems to have paid off — according to Judd, Perdue’s financial holdings have risen in value since he took office.)

But…(cue ominous tone)

… public records and interviews suggest the governor got the loan under remarkable circumstances.

The lender — a farm credit bank based in Perry — allowed Perdue to put up collateral worth less than 20 percent of the loan’s value, according to a security deed filed in Houston County Superior Court. Commercial lenders typically insist on a far greater level of collateral, and the federal agency that regulates farm banks requires strict underwriting standards to guarantee loan repayment.

The bank, AgGeorgia Farm Credit, focuses on real estate lending and carries just $55 million in business loans on its books, according to its latest quarterly report. Now a large proportion of that portfolio is devoted to the governor, who is a familiar figure to AgGeorgia’s leaders: Eight of the bank’s 23 directors contributed to Perdue’s re-election campaign in 2006.

Oh, and what was the loan for? Perdue won’t say.

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