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In 2022, Century Lost Bond Deal That Made Them $1.8 Million; Now, They’ve Hird A Law Firm
October 16, 2024
In 2022, Century lost a deal that earned them nearly $1.8 million since 1999, with most of that coming in just the latter six years of an agreement.
Now, Century has hired a law firm to apparently pursue litigation or take other action against the group with which the town worked on big dollar finance deals as partners with the City of Gulf Breeze.
Tuesday night, the Century Town Council voted to retain the Morgan & Morgan Business Trial Group for contingency-fee litigation against the Capital Trust Agency and the Capital Trust Authority and other potential defendants. The town council approved hiring the law firm on a recommendation by interim town manager Howard Brown with no discussion or explanation.
Before the vote, council president Dynette Lewis asked Brown, “Why is it dated July 11?”
“Because it has been going on since July 11,” Brown responded with no further comment.
Under the contingent fee contract, which does not include personal injury or property damage, Morgan & Morgan will earn a fee of 40% of any gross amount recovered.
What Is Capital Trust?
On the surface it might seem unlikely that Century, one of the poorest small cities in the state, could have ever played a part in the bond financing of dozens of multi-million projects including the Community Maritime Park in Pensacola, $439 million in hotel and convention centers for the Seminole Nation, airport cargo terminals, schools and apartment complexes. The bond money was not from municipal funds of either Gulf Breeze or Century.
The town has served an integral role in the tax-exempt financing of nearly $4 billion worth of projects, including affordable housing projects, airport facilities, hotel and convention developments promoting tourism, health care projects, and K-12 educational buildings.
The approvals were granted by Century and Gulf Breeze as members of the Capital Trust Agency (CTA), an independent public body for the purpose of financing or otherwise accomplishing development programs. Century entered into the Capital Trust Agency with Gulf Breeze in 1999 with Century essentially serving as the “second signature” for CTA, certifying that the projects meet a public purpose under IRS rules and regulations.
The City of Gulf Breeze later partnered with the newly formed Capital Trust Authority (referred to hereafter as the “Authority” in this article). The new Authority reached a deal with Quincy, Florida, as their second signature for all new bond issues. With no involvement, Century would receive no income from the new Authority.
In 2019, a scathing grand jury report found that Century was in a state of financial emergency, and that the council and administration failed to act in the best interest of the community. “Town officials have shown a clear lack of knowledge and understanding as to the operations of a governmental organization,” the grand jury found.
About the same time 2019, Century pushed CTA for the first rate increase in about 20 years, from $350 for each $1 million of bonds issued with a $2,500 minimum per issuance. An agreement was reached to up the payment to $400 per million up to $50 million and $325 for each additional million.
By 2021, Century was looking for another fee increase to $775 per million. And the old CTA was facing increased difficulty in getting bonds approved smoothly by the Century town council. Due to the lack of a quorum, some Agency bond projects were delayed, and CTA faced growing discord between council members.
The Authority’s new deal with Quincy will set to pay that city $400 per million in bonds, with a minimum of $5,000 per deal.
“The Capital Trust Agency (the “Agency”) is still in existence and will continue to administer the outstanding bonds that have been issued dating back to 1999,” Denis McKinnon told NorthEscambia.com in 2022. He was the executive director of both the old Agency and the new Authority. Century only received payment upon the issuance of bonds, so their income from the CTA was zero as all new bonds were issued by the Authority with Gulf Breeze and Quincy.
The CTA paid Century a total of $1,789,828.52 with more than $1 million of that since 2016.
Pictured top: Interim Century town manager Howard Brown at Tuesday night’s council meeting. Pictured first inset: Capital Trust Agency Executive Director Denis McKinnon addresses the Century Town Council in 2022. Pictured lower inset: (L-R) Capital Trust Agency bond counsel Kareem Spratling, Executive Director Denis McKinnon and Gulf Breeze Mayor Cherry Fitch met with the Century Town Council on October 14, 2021. NorthEscambia.com photos, click to enlarge.
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