A wireless Internet provider has asked the county for the largest loan that any entity has requested in many years.
Asheville-based VistaNet has requested $1 million from the county’s revolving loan fund; the company says it hopes to provide underserved and unserved areas of the county with high speed Internet.
According to its website, pricing begins at $85 per month and tops out around $155 per month, depending on bandwidth (Internet speed), and installation and setup fees are tacked onto that. The per month rate decreases with multi-year contracts.
Commissioners will want to avoid the “Metrostat effect,” county Manager Chuck Wooten said by telephone Aug. 6 – a reference to the defunct telecommunications provider that defaulted on a $250,000 loan leaving the county with assets it eventually sold for $50,000.
In recent years, officials have become strict about ensuring adequate collateral for entities seeking county loans.
Many loans issued prior to the current board’s tenure were not repaid, and the county was left holding few assets.
In 2002 the county loaned QC Apparel some $300,000 on top of a previous county loan. By 2010, with interest, the unpaid balance was $410,000.
After QC defaulted, the county was left with a few thousand dollars of sewing equipment, which was sold as scrap metal.
VistaNet’s loan application doesn’t create the required amount of jobs – one new job per $10,000 loaned – meaning VistaNet would have to create 100 jobs for the million dollars it’s requesting. On the application, the company said seven jobs would be created.
The county does not even have $1 million in its revolving loan fund.
If leaders agree to the VistaNet loan, funds would have to come from somewhere else to support the request, Wooten said.
Currently the RLF sits at $537,764. The county does have $414,188 in economic development funds it could partner with RLF funds, still falling short of the $1 million requested, should the loan be granted.
The county combined RLF and ED funds in granting radio station WRGC’s loan.
County officials took extra precaution regarding that loan by securing a leasehold on the business, a security interest in all its equipment and a claim on any accounts receivable as collateral should WRGC default.
Wooten said commissioners would consider VistaNet’s loan application during an Aug. 19 work session.
“It’s pretty optimistic to ask for this amount of money,” Wooten said.
Commissioners’ Chairman Jack Debnam, who sits on the Revolving Loan Committee, said the county hasn’t had good luck with technology firms in the past and would require a “substantial amount of security” for a large loan.
Telecommunications provider AT&T has already been researching wireless Internet in the area and Debnam said he thinks they’ll be attempting something similar, without asking the county for a loan.
“We’ll take a look at anyone that wants to make an application (to the RLF). We’re going to be very judicious about looking at assets and liabilities,” he said.