Eastman — In an unusual land deal with a local development authority, state Rep. Jimmy Pruett managed to acquire a $500,000 taxpayer-funded building and other improvements free of charge on an industrial site in his home district.
In addition, Pruett, R-Eastman, did not pay local taxes on the property for nearly a decade. Despite being one of Dodge County’s most powerful figures, Pruett told the AJC he was unable to correct a clerical error that caused the property to remain off the county tax rolls until last year.
Pruett and other local officials say the land deal was an effort, which ultimately failed, to lure new business to Dodge County. The deal played out from 2000 to 2003, when Pruett was a Middle Georgia businessman who was not yet in the Legislature. But the transaction has come up in recent months as part of a local political squabble.
Dodge County-Eastman Development Authority Chairman Jack Burnham joined the authority in 2012 and began digging into the land deal. Burnham says the property never should have been handed back to Pruett.
“The development authority should have that building by rights,” he said.
The political warring in Eastman concerns the operations of the development board and the related Heart of Georgia Airport Authority. Last month, Pruett pushed two bills through the General Assembly abolishing the airport authority and dramatically reshaping the development authority.
House Bill 636 would abolish the airport authority, transferring its powers to the development authority. House Bill 635 would reconstitute the development authority, ending the current authority members’ terms at the end of the year; Burnham, however, would be required to resign immediately.
HB 635 also would allow Pruett and the Dodge County commissioners two immediate appointments to the development authority to replace Burnham and another member who would be required to resign. Both bills passed in the final days of the legislative session and await Gov. Nathan Deal’s signature to become law.
The Dodge County Commission supports the legislation. Chairman Dan McCranie said the airport authority has not cooperated in strategizing with the chamber of commerce to attract development.
But Burnham and Airport Authority Chairman Eddie Driggers claim Pruett is misusing his power as a legislator to settle scores and silence their dissent. The chairmen said Pruett’s bills represent a conflict of interest because of his various entanglements with both authorities.
But Pruett said political enemies, including his primary opponent, are using scare tactics.
“They have told everyone in the world that the airport is going to close down, the school is going to close down,” Pruett said, referring to a pilot training school at the airport.
Pruett said he was asked by his constituents, “as a leader of the community,” to address problems with the airport authority.
“There is no conflict,” he said.
Pruett bought the building in Eastman’s industrial park in 1997 for $600,000, selling it three years later to the development authority. The sale price was $2.1 million, but as part of the deal, Pruett deferred payment for three years.
Pruett was not in office at the time, but he was a key figure with the local Chamber of Commerce and a member of the airport authority, a prime economic driver for the region.
After acquiring the property from Pruett, the development authority used a state grant to make a number of improvements to the tract, including building a second building.
In 2003, before the deferred payments came due, the development authority transferred the land back to Pruett at no cost. Pruett resumed ownership of the property, renting it out to various industrial clients.
John Harrington, attorney for the development authority and for the county government, said the development authority improved the property to lure an industrial client to Eastman.
“Unfortunately the business did not survive,” he said.
Without a tenant, Harrington said, the development authority could not make the deferred $2.1 million payment to Pruett. Rather than let it go into foreclosure, the authority decided to transfer the land back to Pruett at no cost, he said. The result was the Pruett received the state-funded new building and other upgrades for free.
In addition, the property — which was tax-exempt while the development authority held it — was never restored to the county tax roll. The county should have started assessing the property again when Pruett took it back, Harrington said.
Pruett paid no tax on the building until 2012 after new officials on the development and airport authorities began bringing it up.
Initially Pruett said he was aware of the taxes owed and said he planned to pay them back. Later he clarified that the back taxes owed on the industrial park building are “not in my hands. I do not own that company that owes those taxes.”
Pruett said that when his wife became sick with cancer, he transferred Pruett Holdings, the corporate entity that owned the parcel, to his children. His wife died in 2001. Records filed with the Georgia Secretary of State show the property currently is owned by Mosquito Creek Properties, which itself is owned by Pruett Management Services, which lists Pruett as its registered agent.
The city of Eastman wants $36,360 in back taxes and the county tax bill is more than $140,000.
Burnham and Driggers began looking into the land deal early in 2012 when Pruett was running for re-election. Pruett’s primary opponent was John Clements, co-chair of the airport authority, who Pruett thumped by a 3-1 margin.
Clements said the land issue was one of the main reasons he ran against Pruett.
“I pay my taxes,” he said. “And he hasn’t paid his taxes on that (land).”
Pruett’s critics say the bills to abolish the airport authority and remake the development authority will result in ending a lawsuit the airport authority has filed against three local banks, one of which has Pruett on its board of directors. Pruett said the legislation has “nothing to do with dismissing any kind of lawsuit.”
McCranie, the commission chairman, said the suit has divided the community.
“In a small town like Eastman, the banks have to be a part of industrial recruitment,” he said.
The Eastman City Council has not taken a position on either bill, but Chairman Bobby Slye said he is curious about the bills.
“Is this being done to stop a suit or to help Eastman?” he said.