Omnicity offers settlement (02/26/08)

Negotiations are under way between Jay County Development Corporation and Omnicity in an attempt to resolve delinquent loans totaling $494,000 made by the county to the wireless Internet provider with economic development income tax funds.

JCDC executive director Bill Bradley outlined a settlement proposal from Omnicity for Jay County Commissioners Monday.

That proposal, which Bradley said will serve as a starting point for continuing discussions, calls for:

•A cash payment of $150,000 from Omnicity.

•An agreement by which JCDC would receive a portion of monthly Omnicity subscriber fees, starting at $2.50 per month per subscriber for the first 299 Omnicity subscribers and rising to $5 per month up to 1,000 subscribers.

•A release of JCDC's liens on existing Omnicity equipment.

Bradley told the commissioners the proposal raises a number of questions, including the need to assure that subscriber fees would continue to be paid to JCDC even if Omnicity were to be sold.

It's also unclear how the funds would be routed back to the county. Though county EDIT funds were the source of the loan, the actual loan agreements are between Omnicity and JCDC.

Bradley stressed that the proposal represents a starting point and that any agreement would require final approval by the commissioners.

"It's not perfect," commissioner Gary Theurer said Monday afternoon. But he noted that while the county wants the loans re-paid, it doesn't want to force the company into bankruptcy. "It's going to take time," he said.

Bradley also presented a series of proposed changes in policy and procedures for the distribution of EDIT funds to local cities and towns and for how future EDIT loan requests will be handled.

Among Bradley's proposals, which will be reviewed by the commissioners over the next two weeks, are procedures that would:

•Require each community to present plans to the county council outlining their intended uses for EDIT funds.

•End the practice of distributing EDIT funds directly to local economic development corporations as has been done in the case of Dunkirk, Redkey, Pennville, and Bryant in the past. Instead, funds would be distributed to local government, which could then opt to place them with local development corporations if they chose.

•Establish an EDIT loan review committee and a detailed new application process.

•Rule out EDIT loans for the refinancing of debt, acquisition of rolling stock, soft costs such as design and promotional activities, and venture capital.

•Set a range for EDIT loans of $15,000 to $200,000 at an interest rate two-thirds of the Prime Rate.

•Require collateral as reasonable security.

•Require that at least one full-time permanent job be created for every $40,000 loaned.

Commissioners expect to re-visit Bradley's proposals at their March 10 meeting.

"We're getting it resolved," commissioner Milo Miller Jr. said. "We'd like to get back to what EDIT's all about: Jobs."

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