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Ellis, Loans, County Commission And Blue Origin.

Yesterday, the County Commission took up an interesting topic of whether it could borrow $8 million dollars to give to Blue Origin as an incentive to establish a facility here in Brevard County.

Via Wikipedia:

Blue Origin is an American privately funded aerospace manufacturer and spaceflight services company set up by Amazon.com founder Jeff Bezos with its headquarters in Kent, Washington. The company is developing technologies to enable private human access to space with the goal to dramatically lower costs and increase reliability. Blue Origin is employing an incremental approach from suborbital to orbital flight, with each developmental step building on its prior work. The company motto is “Gradatim Ferociter”, Latin for “Step by Step, Ferociously”. Blue Origin is developing a variety of technologies, with a focus on rocket-powered Vertical Takeoff and Vertical Landing (VTVL) vehicles for access to suborbital and orbital space. The company’s name refers to the blue planet, Earth, as the point of origin.

(Bezos himself is the richest man or second richest man on the face of the earth (depending on the value of stock he holds). In December, his net worth passed the $100 billion mark but has since dropped to just below the $100 billion level.)

When Blue Origin was looking for places to establish a facility, the North Brevard Economic Development Zone (NBEDZ) hopped up and said “pick us.” To make the move, Blue Origin wanted $8 million dollars.

There were several problems. First, the NBEDZ didn’t have $8 million laying around. They would have had to borrow the money to pay Blue Origin. Problem 1A was that no financial institution would loan the NBEDZ the money. The NBEDZ came to the County Commission and basically said “Got $8 million to pay to Blue Origin?”

Therein lies problem two: The County didn’t have $8 million but because of their credit rating, they could get it by borrowing the money.

Because nothing is ever easy, getting the money set off two problems. (Well, one problem and one “what the heck?”)

The “what the heck?” moment was that the public never got to see the contract between the County, NBEDZ and Blue Origin. There were no public comments, and no one outside of the parties were able to see the terms.

County Attorney Scott Knox said that the Blue Origin could request to keep the terms of the contract private and if the terms were disclosed, the person disclosing the terms was subject to criminal penalties. (Criminal as in “do not pass Go. Do not collect $200. Go directly to Jail.“)

To some extent we understand not requiring a company to disclose in a contract proprietary information, even when contracting with the government. But frankly, public funds going to private companies without any public input seems wrong. Redact what is proprietary out of the contract and let the public have a look at what their tax money is going toward.

It just seems like a statute that needs to be reviewed and changed to allow the “transparency” that public officials campaign on, but seldom want or exhibit.

The next problem was Clerk of the Courts Scott Ellis.

Brevard County Clerk of Courts Scott Ellis — who would among those to have to sign the paperwork for the deal — said he questions the legality of the county borrowing money to pay the incentive to Blue Origin. Ellis plans to challenge the plan in court.

“It is unlawful for a government in Florida to issue bonds for operational expenses,” Ellis said. “The ‘grant’ is clearly not a capital expense. The county has no property interest in the Blue Origin facility.”

Ellis also said that, when the County Commission approved the incentives for Blue Origin in 2015, “there was no mention of issuing debt by either the North Brevard Economic Development Zone or Brevard County. Neither can issue debt for grants or operating expenses. Had debt been mentioned at the meeting, much more would have been debated a few years ago.”

At yesterday’s Commission meeting, Ellis made the point that the Commission can borrow money for capital expenditures but not for “operational expenses.”

Knox countered with the idea that a third “category” or expenditures was allowed: those that serve a “paramount public purpose.”

“Since the $8 million in borrowed funds would be payable to a private company as an economic incentive grant, the Florida Constitution require the county to establish … whether the project to be funded serves a paramount public purpose,” Brevard County Attorney Scott Knox said in an agenda report memo to county commissioners in advance of Tuesday’s meeting.

That determination would be made by a Circuit Court judge, Knox said.

To have a judge determine whether $8 million of borrowed money would meet the definition of “paramount public purpose” takes the specialized services of a “bond counsel” firm to press a lawsuit. The cost of the services is not to exceed $25,000.

One would think that determination would have been made before offering the $8 million to Blue Origin. As we understand the contract as explained by Knox, the County is obligated for the $8 million no matter what. It is the method of providing the funds that is the issue. If the judge says the County can’t borrow the money, the County will have to look for the funds within it’s budget.

(Wonder how many roads $8 million plus potential interest plus $25,000 would fix?)

However, as the debate over the money was taking place, we were struck by the three Commissioners who made rather substantial comments on how nice the Blue Origin building was, how it was larger than originally planned, and how it looked like Blue Origin was going to hire more people than initially thought. Even a staff member made a similar comment.

Frankly, the comments either seemed like a deliberate distraction aimed at the public or an example of officials being distracted by “shiny objects.”

It’s almost as if the discussion went this way:

We need to talk about the loan…..:

“But look at the BIG, SHINY BUILDING!!!

“No, we need to talk about the loan…..”

“But look at all the SHINY EMPLOYEES!!

“Seriously, we need to talk about the LOAN…..”

SHINY REDEVELOPMENT!!

It is so infuriating when members of a Commission or a Council go off topic like that. The whole agenda item was whether the loan is legal and the need to hire a firm to get a judge to agree or disagree with the idea that the loan is of “paramount public importance.”

It’s almost as if politicians deliberately say “don’t look at what is happening over here with our decisions….look here and marvel with us at how things are shiny and watch as we pat ourselves on the back.”

Ooooooooooooh…..shiny!



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