Saturday, August 10, 2019

Mi-Connection albatross is about to be lifted...towns receive $80 million offer

Friday afternoon saw some of the biggest news in recent years for Davidson as the Town  announced Mi-Connection (doing business as Continuum) had received an $80 million offer for the sale of the company.

Save Davidson broke the news on its blog and with a newsflash email.  Re-printed below with the group's permission.

NEWSFLASH: Continuum Cable Company (Formerly MI-Connection) Sale Moves a Step Closer to Reality Towns of Davidson and Mooresville set to enter a contract to sell Town-owned Continuum Cable Company. 

A buyer has been identified and the Towns of Davidson and Mooresville are set to enter into an agreement to sell the cable company owned through an interlocal agreement between the towns. According to the Town of Davidson, the contract price is $80 million. The sale is contingent upon citizen approval via referendum on the November 2019 ballot.

Details of the Deal
Commisisoners David Sitton and Matthew Fort were instrumental in the negotiation process. The pair have worked for more than 18 months with the larger team including Mayor Knox of Davidson, Mayor Atkins of Mooresville, legal teams, the Royal Bank of Canada (RBC) team, as well as Continuum representatives.

David Sitton brings business accumen to the project as CEO of a global logistics company he co-founded in 2002. Matthew Fort brings a host of corporate finance experience to this project. Together, they played a significant role in negotiations with the Town of Mooresville to agree to sell, the selection of RBC; a preeminent investment bank, and ultimately shaping the structure of the deal.

Background Information
In August 2007, The Davidson Town Board: Mayor, Randy Kincaid, Commissioners Cary Johnston, Bruce McMillan (absent), Evan Webster, Margo Williams, and John Woods voted to purchase the recently bankrupted Adelphia Cable Company despite strong citizen scrutiny and opposition. As concerned citizens suspected, the Town has incurred more than $1M annually to subsidize Continuum's debt service. For a town the size of Davidson, that debt represents nearly 10% of the Town's $12M budget and has hindered capital improvements, parks & recreation endeavors, staffing, and other important Town initiatives.

The Numbers 
In addition to the Continuum subsidy paid by taxpayers over the last 12 years, as of July 31, 2019 the total outstanding debt principal is $60.4 million. Davidson's share of the debt is 30% of the total amount. Davidson also owes a deferred liability of approximately $1.8 million to Mooresville.

Citizen Action Required on November 5
Moving forward, while a referendum was not required  to purchase the company, it's important that citizens are aware that a referendum is required to sell the asset. Town Manager, Jamie Justice indicates, "There will be a public hearing to consider approval of the sale of the Continuum Communications System. If we vote to approve the sale, eligible voters will have the opportunity to support or oppose the sale at a referendum election on November 5." It will be extremely important that citizens get to polls to vote in favor of selling this asset.

Save Davidson's View
Save Davidson is beyond ecstatic and proud that three of our top tier candidate endorsements from 2017 have worked to make this happen for the all citizens of Davidson. We strongly encourage citizens to vote to sell Continuum on November 5 . Save Davidson recommends the referendum be worded in clear and simple language so that citizens understand what is trying to be achieved.

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