AMERICUS — When the Americus Times-Recorder published the announcement of a new industry for Americus back in May 2008, the news was met with great enthusiasm.

That loan, of $400,000, was approved at a called meeting of the Americus-Sumter County Payroll Development Authority (PDA) to Specialized Food Products LLC (Eugene “Gene” M. Smith Jr.) for the purchase of a special “spiral” freezer. The company, which was supposed to be “up and running” in Americus by August 2008, was to initially create 40 jobs in the manufacture of Italian ices and bagel dogs.

The terms of the 5 percent loan called for repayment over a 10-year period. Smith signed a guaranty of payment dated Jan. 20, 2009.

Questions have been whirling around the community for several months, prompting a local businessman to write a letter to the editor of this newspaper, published on Oct. 16, asking questions about the loan.

The Times-Recorder contacted Paul Hall, PDA chairman, about the loan and was referred to the Clerk of Court’s Office. That’s where a petition for repossession of equipment owned by Specialized Food Products was filed. PDA attorney Mike Fennessy confirmed that the company had been served with the summons on Oct. 21 and has 14 days to respond (with Nov. 4 as deadline). Fennessy said the summons was served at the registered address of the corporation, which the Georgia Secretary of State’s Office’s website lists as 518 Ga. Highway 27 East, Americus.

When questioned about the loan, Fennessy said he could not talk about it as he is the PDA’s attorney and not a member of the PDA. He referred questions about disbursement of loan funds to Specialized Food Products LLC and repayment of loan funds to the PDA, to B.T. Johnson, a local CPA, who is accountant for the PDA. Johnson told the newspaper that he is not member of the PDA and could not answer any questions. “I have no authority to discuss anything,” Johnson said. “I’m just a paid accountant.”

Fennessy was contacted again and asked to give the answers to three questions: Did the PDA require a financial statement from Smith prior to approving the loan? How was the loan paid out to Smith, for how much and when? How much of the loan has been repaid and when?

Fennessy told the Times-Recorder that he would get the answers to these questions.

David Garriga, executive director of the PDA, contacted the Times-Recorder by phone the following day and was asked about the loan.

“This was a good project,” Garriga said, “We went to the bankers; we felt good about this project. It was a very detailed application process he (Smith) had to go through. It was a good project; it had a lot of support.”

Garriga was asked to answer the three questions, and continued to hedge the answers. He had told the Times-Recorder last summer, when first asked about the loan, that it was “not legal” for him to give any information on the repayment of the loan.

“Nothing illegal or unintended went on. It was a good project to create jobs,” he told the newspaper Wednesday. “It was not done overnight. It was a long, arduous process.”

Again, the Times-Recorder requested that the three questions be answered.

On Thursday, Garriga sent the following e-mail to the Times-Recorder.

“The PDA sent a check for $200,000 made payable to Specialized Food Products and Doug's Industrial Refrigeration on 10/6/08. Doug's Refrigeration is the company from which the processing equipment was purchased. The amount was invoiced and equipment was inspected.

“The second check was written for $200,000 made payable to Specialized Food Products and Doug's Industrial Refrigeration on 1/20/09. This second check was sent only after verification that the primary equipment was installed. Again, the funds were used to purchase and install very large frozen foods processing equipment. The equipment is in place in a building owned by Tape Specialist and leased to Specialized Food Products owned by Gene Smith.

“The company was awarded the loan after completing a very comprehensive application process. Additionally, three interviews were completed by PDA Committees and staff. The PDA Board approved the project after several months of analysis. The Board required that the equipment valued at over $400,000 be used for collateral and that personal guarantees from Mr. Smith be provided.

“The entire U.S. economy tanked at the same time Specialized Food Products was to open its doors.

“Presently, litigation is taking place. To my knowledge there has been no additional exchange of funds between the company and PDA.

“The job production was expected to reach 135 within three years

“This was a project that any community would be proud to have. Others wanted it.”

The next day, Friday, Garriga sent the following e-mail to the Times-Recorder.

“Gene Smith, Specialized Food Products, Inc. paid accrued interest of $2,898.81 on January 20, 2009.”

The specific question regarding the requirement of a financial statement from Smith prior to loan approval remains unanswered.