The Mexico City Council is discussing how to best respond to a company’s failure to make its annual payment as part of a neighborhood improvement district.

Mexico nearly 11 years ago established a neighborhood improvement district with Mid-America Brick and Structural Clay Products to promote improvements at the property that was once housed A.P. Green, a major brick producer and local employer.

Mid-America Brick purchased the property after its closure in 2001. The property has since been owned by Shamrock and is now owned by Abacus Financial Member LLC, a Scottsdale, Arizona, based company that bought the A.P. Green property within the last year, said Mexico Economic Development Director Russell Runge.

“[The city] issued the bond with the acknowledgment the [improvement district] property owners would pay an annual assessment to the city, equal to the need of the annual bond payments,” Mexico Deputy City Manager Roger Haynes said.

The district offers property tax relief to owners while they conduct improvements. The program functions like a loan from the city that has to be paid back by the property owner, with annual payments made through a limited general obligation bond. The related financial responsibility for the improvement district falls on the property owner.

Audrain County County Treasurer Patty Meyers contacted the city in early January informing staff the annual assessment payment was not yet made, according to the Feb. 10 Mexico City Council meeting packet.

“[Mid-America] did certain improvements [10 years ago]. With those improvements being made, they made a commitment to pay annually special assessments for the [district],” Haynes said.

Haynes attempted to contact Abacus Managing Director John Pacheco multiple times about the timing of the assessment payment, which is due March 1. Pacheco informed Haynes on Jan. 16 that the payment would not be made.

The council met in a closed session Monday to discuss litigation, but no decisions were made.

City staff have budgeted funds since 2010 to make up for a potential missing payment. The council approved a budget amendment Monday to transfer up to $154,740.86 from the Economic Development Fund to the MAB NID fund to make the payment.

“We felt that was the best one to draw the funds from since the [improvement district] was an economic development project back in 2010 when it was funded,” Haynes said.

The city still is seeking payment from Abacus, Haynes said.

Pachecho had planned to raze the buildings on the A.P. Green property to offer separate plots for other businesses, Runge said.

Abacus representatives refused to comment on the situation.

“[Pachecho] also said he intended to upgrade the rail service to [the property] and make that as a selling point,” Runge said. “That is what he told us. It’s to be taken with a grain of salt, I suppose.”

The city is looking for alternate funding sources for the next fiscal year to make the annual payments for the improvement district if the city ultimately is not able to receive payments from Abacus.

cdunlap@gatehousemedia.com