The Register-Herald, Beckley, West Virginia

Local News

December 4, 2008

Talk continues over future of Tamarack

Privatization revisited as bond debt remains at issue

By Mannix Porterfield

Talk is growing, at least with one member of the West Virginia Parkways Authority, of a possible move to see if some private interest might be interested in leasing or buying Tamarack rather than see it turned over to the Commerce Department.

Once again Thursday, at a combined meeting of the authority’s committees, board member Victor Grigoraci intimated a request for a proposal should be sought to see if Tamarack, the popular mecca for home-grown artisans in Beckley, could be run in the private sector.

Before that could occur, or even a transfer to the Commerce Department, the authority must position itself for a defeasance of outstanding bonds, Turnpike Manager Greg Barr emphasized.

Right now, the debt stands at $7.1 million. The authority has some $7.4 million in hand, but the numbers can be confusing, he said.

“If you call them early, it takes extra money to do that,” Barr said.

“You have to pay people a premium. If they bought a longer term bond, you just can’t call it back right now. With all these calculations that the bond counsel and underwriters do, it takes a deposit of about $7,650,000 to properly defease the bonds.”

Interest rates at the moment are inverted, he said.

“Short-term rates are half a percent. They used to be 4 or 5 percent. That makes defeasance more complicated and more costly.”

Grigoraci told fellow authority members it might be wise to see if some private entity would assume Tamarack so the governing board doesn’t lose its $27 million investment.

“I don’t see giving up an investment that cost us $27 million without being reimbursed,” he said.

No action was taken by the committees, but before the meeting, Barr noted Gov. Joe Manchin mentioned the Grigoraci suggestion recently.

“That probably will become more and more talked about and may occur,” Barr said. “If we could recover that $27 million, that would make a big dent in our expenses.”

A legislative audit report showed that $2 million has been dedicated to Tamarack in all 12 years of its operations to keep it afloat. While the money came from concessions rather than tolls, the auditor’s office said the $20 million could have been applied to road maintenance.

Manchin retooled the authority with a more narrow mission of taking care of the road only and removing the board from the economic and development concerns that were added to its agenda in 1989 by an act of the Legislature.

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