Montgomery Co. Bolsters Industrial Bond Oversight

Montgomery County is overhauling its Industrial Development Bond (IDB) program, enacting stringent new oversight measures following the unanimous rescission of a $10 million loan agreement with Blackfin Enterprises. The Commissioners Court voted 5-0 on July 18, 2023, to pull the funding, prompting a significant push for transparency and accountability in local economic development initiatives.

The controversy centers on Blackfin Enterprises, a company led by Robert Black, which applied for the loan in November 2022. The Industrial Development Corporation (IDC) board initially approved the bond on December 20, 2022, despite some board members reportedly raising questions about Blackfin’s exact business model. Industrial Development Bonds are typically issued to finance projects that promote manufacturing, create jobs, and stimulate the local economy, often offering tax-exempt financing to qualifying businesses.

However, the agreement began to unravel in March 2023 when County Attorney B.D. Griffin intervened. Griffin reportedly flagged serious concerns about Blackfin’s operations, specifically questioning whether the company was genuinely involved in manufacturing, which is a core requirement for IDB eligibility, or if it leaned more towards speculative real estate ventures. Throughout the process, Blackfin Enterprises reportedly failed repeatedly to provide necessary financial documentation and meet deadlines required to secure the funds.

In an attempt to allow Blackfin to rectify the issues, the county granted a 90-day extension in April 2023 for the company to submit required documentation and meet compliance. With the extension expired and issues unresolved, the IDC board convened again on July 11, 2023, and unanimously recommended rescinding the loan agreement. That recommendation led to the final vote by the Commissioners Court a week later.

The “dust-up,” as county officials described it, has galvanized efforts to implement stricter procedures to prevent similar situations. County Judge Mark Keough emphasized the critical need for “close oversight” to ensure such an incident does not recur.

Commissioner James Noack, who was instrumental in bringing many of the initial concerns to light, affirmed his commitment “to ensuring complete transparency and the strictest level of oversight” for all future bond programs.

The newly implemented procedures include:
* **Full Commissioners Court Approval:** All future Industrial Development Bond agreements will now require direct approval from the full Commissioners Court, elevating oversight beyond just the IDC board.
* **Pre-IDC Review by Commissioners:** Before an application even reaches the IDC for initial consideration, the Commissioners Court will review all related documents and proposals.
* **Enhanced Transparency for IDC Meetings:** Industrial Development Corporation meetings will now be live-streamed and recorded, significantly increasing public access and accountability.
* **Front-Loaded Financial Due Diligence:** Rigorous financial due diligence on all applicants will now occur before the IDC even begins to consider a proposal, aiming to ensure financial stability and legitimate business operations from the outset.

Even Blackfin CEO Robert Black acknowledged some operational challenges during the process. He reportedly admitted to issues with “timely documentation” but maintained that his company’s business model would have created jobs and aligned with the program’s intended goals.

County officials underscored that the primary objective of these new measures is to protect taxpayer dollars and ensure that bond programs are utilized precisely as intended – to foster legitimate local industry growth and job creation, rather than supporting speculative ventures that do not meet the strict criteria for public funding. The move signals a clear message that Montgomery County is committed to fiscal prudence and accountability in its economic development endeavors.