Huntley responds in battle over bonds

If you live in Huntley and you've noticed more junk in your mailbox lately, you can thank Horizon Group Properties and the village of Huntley.

Horizon started the mail feud with a series of mailings late last year seeking to undermine the village's position on Horizon's offer to pay off $16 million in bonds.

One of Horizon's postcards, I'm told, featured an image of a $16.4 million check, implying the village was turning down an offer of $16.4 million from the developer.

As I pointed out in an earlier comment, this was misleading. Under Horizon's proposal, the company would pay off the $16.4 million in bonds so that it could get paid for a class of bonds Horizon holds.

Horizon would give the village $200,000 under the proposal, not $16.4 million.

In October and November, I reported Huntley's reluctance to accept the offer.

At that time, Huntley officials said they didn't have enough information to evaluate the proposal. Basically, Huntley wanted to know, what's in it for us?

In a response letter Huntley sent out to village residents in December, the village's arguments for rejecting the offer are much more fleshed-out.

After reading the letter, it seems to me that the central issue in this dispute is whether Horizon, in paying off the $16.4 million in bonds, would cause the bonds to lose their tax-exempt status.

That sounds like inside baseball, but basically it means the bond holders would have to pay taxes on their investment.

And this matters because it violates a contractual agreement between the village and the bond holders. That means the bond holders would have recourse to sue the village.

It is the village's position that "if the village accepts Horizon's payment, a strong possibility exists that the tax-exempt status of the bond will be lost."

A secondary point the village makes in its letter is that "a wrong move by the village on Horizon's request could adversely impact our ability to obtain future bond proceeds."

This suggests that Horizon's proposal could damage the village's credit rating or scare off potential lenders, making it more costly and more difficult for Huntley to borrow money for future infrastructure needs.

Back in October, Horizon Vice President Phillip Waters complained that the village "rejected us and didn't give us a reason why."

The village's December letter sheds some light on why Huntley's legal counsel advised against accepting the offer and why the village continues to oppose it.

I haven't yet heard of additional volleys fired by Horizon or Huntley, but when I do, I'll let you know.