A last-minute payment on the Parkway East Public Improvement District (PID) bonds Friday averted default and gave the struggling PID new life until another payment is due in November.

The payment was made by the bond insurer, Assured Guaranty Corporation, in the amount of $686,096.43. Assured Guaranty is the successor company to Radian Asset Assurance, a Wall Street-based bond insurance firm currently embroiled in a federal lawsuit with the county over the PID.

Mike Espy, attorney for the Madison County Board of Supervisors, said the payment was made around 4 p.m. Friday, an hour before the bonds would have entered default.

"This payment averts default and indicates that the company which acquired Radian is honoring the terms of the bond insurance contract between Radian and the PID bondholders, and the insurance guarantee policy between Radian and the PID, for which the PID paid an insurance premium to Radian at the time the bond was issued," Espy wrote in an email to media and board members.

He added, "Madison County, which is not the issuer of the Parkway East PID bond, and has no connection on any contract with Radian, nonetheless, is pleased that the insurance company is honoring its commitment to the PID and to the bondholders."

The county and Radian are scheduled for an October trial. Last month, a federal judge denied both parties summary judgment requests to end the case.

The lawsuit hovers around who is responsible for making payments on the PID bonds due to shortfalls in payments by landowners.

Espy says the county has met its obligations, including a contribution agreement, which puts taxpayers on the line to cover shortfall payments in the form of bridge loans so long as two years worth of shortfalls don't stack up without reimbursement.

The first shortfall payment made by the county was for $374,000 on Oct. 24, 2011 and have totaled $2 million.

Has Assured Guaranty Corporation reimbursed the county for shortfall payments, the county would be responsible for future shortfalls as long as it fell within that two-year window.

Radian asserts that the county is still on the hook for payments.

In the Parkway East PID, 14 landowners agreed to a special assessment on their property in exchange for $27.7 million in bonds, of which nearly $22 million were used to build the 4.3-mile Galleria Parkway that connects Gluckstadt to Madison and parallels I-55.

Development never materialized on the parkway as expected, due in part to the 2008 financial collapse. Since then, several landowners have defaulted on payments, including:

• Landstock LLC

• 891B Properties LLC

• Madison parkway LLC


• MG Parkway LLC

• YMCA of Metropolitan Jackson

• Landspan

Instead of reassessing the landowners who were making payments, the PID collected what they could.