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News Jackson County approves loan for purchase of WRGC

Jackson County Commissioners approved $179,000 in Economic Development Commission (EDC) funds and $110,000 in Revolving Funds Loan (RFL) to be loaned to Roy Burnette to bring the WRGC radio station back to the air. According to Jackson County Manager Chuck Wooten, Burnette approached the county four or five weeks ago requesting a loan, as did other residents. “We had a couple of inquiries about a loan ... however, those parties chose not to pursue the purchase of the radio station,” noted Wooten.

Burnette, owner and CEO of newly-formed 540 Broadcasting Co. and Jackson County resident, approached the board in November with a proposition to keep a county tradition alive. He expects the station to be up and running by mid-February. “I am glad that the commissioners see the radio station as an opportunity to stimulate the economic development in the county,” said Burnette.

According to Wooten, Jackson County commissioners recognize the importance of the radio station and want to work with Burnette to keep the tradition going. “The commissioners have stated that a radio station is needed to provide a community service, to provide an emergency communication outlet, and to serve as an economic development opportunity,” said Wooten.

The radio station unexpectedly went off the air on Aug. 30, and station management posted a message on its website to inform listeners it was uncertain if or when they would return.

The notice cited that the “incredibly difficult economy has made it impossible for us to secure the local advertising support needed to continue providing Jackson County a full service community radio station.”

The notice also informed listeners that although the station had been successful in maintaining a large radio audience throughout the coverage area, the station had to discontinue operations until the economy improves. “With these uncertain times and the fact that our studio/office/transmitter site lease is set to renew at the end of 2011, we did not feel it was prudent to commit any more of our company resource to subsidize the station’s operation.”

Art Sutton, owner and CEO of Georgia Carolina Radio, the same company which owns both of Franklin’s radio stations, currently owns 680 WRGC. The three-year permit between WRGC and the Federal Communication Commission (FCC) is set to expire in late December, so commissioners have to act fast. If the permit expires, the frequency will no longer be available. Burnette had requested an extension from the FCC in the hope that with the help of commissioners, all parties will be allowed to continue the process without interference. The extension was denied, but the FCC has allowed Burnette to more forward in the process.

Burnette’s loan from the EDC was approved last week and was contingent on an additional loan from the county’s RLF. Commissioners voted to approve the RLF during a special called meeting on Monday despite the county’s reservations on approving the loan. “The decision was made to move forward with the loan contingent upon getting the paperwork prepared to protect the county’s investment as much as possible,” said Wooten Monday afternoon.

According to Wooten, one stipulation of the $110,000 loan from the RLF is that Burnette will create 11 jobs for the community. “We have a limit of $10,000 per job created from the RLF so the $110,000 is based on anticipated jobs to be created,” said Wooten. The loan request is intended to cover the purchasing cost of the frequency, which is listed at $250,000.

The county carefully considered granting another RLF loan because according to Wooten, the county’s loan history has not been beneficial for the county, with the majority of current loans in default status. “Unfortunately, the county’s track record for the revolving loan program is not very positive so we want to make sure we have every chance possible to cover our investment in the event things don’t work out,” said Wooten. “ Obviously, we would much prefer to collect our loan over the next ten years because that would indicate the station has been successful.”

According to Burnette’s presentation to commissioners, the station would no longer operate on the same WRGC frequency, but instead will broadcast on 540 AM. The revamped station, which will have a 5,000-watt transmitter, is expected to have a larger coverage area spanning throughout Jackson County and touching as far as Canton and areas of Cherokee County.

Wooten believes that the transition to a 5,000-watt transmitter will help the station prevail during the county’s struggling economic condition. “The radio station has a strong track record of success and it was only the last couple of years in a very difficult economic situation that the station began to struggle. Increasing to a 5000-watt station will substantially expand the listener area and most importantly the opportunity for new advertising.”

In addition to the new name and the station expanding the transmitter, Burnette said that the new radio station will work to meet the criteria of the targeted audience. “Our main focus is going to be on trying to keep our listeners posted on what’s going on dayto- day in the community,” said Burnette. “The majority of our programs will be informative. We will be covering local sports; just really keeping our coverage local.

Burnette stated that the station will be similar to WRGC in the fact that they will continue to play a broad range of music spanning over tunes from the last 50-60 years.

To prevent the county from suffering negative repercussions in the event Burnette defaults on the loan, Wooten said county attorney Jay Coward has begun working out the legalities on the county’s behalf. “Our attorney was working with the attorney for Carolina-Georgia broadcasting to work out the license transfer to make sure Jackson County has the collateral we need to protect our investment,” said Wooten. “Mr. Coward is also utilizing outside counsel who has substantial experience in radio stations.”

According to Coward, he had begun discussions with FCC lawyers regarding possibilities for the county being named as a lien-holder on the frequency in order to protect the county in the event that Burnette should default on the loan.

“The county commissioners have taken action subject to a major caveat: the county must get an adequate lien position. I have discussed the matter with two FCC attorneys, but no action has been taken to employ one of them yet,” said Coward. “So the process is an attempt to figure out how a FCC license transfer works, how long it takes, how much work is required, what it costs, how the taxpayers are protected, etc. and we’re only at the beginning stages of all that now.”

After consulting with the FCC, the county learned that they were unable to be named as a lien-holder, but have identified other options to prevent the county from being liable. “We cannot be a lien-holder against the FCC license; however, a purchase agreement can provide us protection,” said Wooten. “The actual transfer of the FCC license will take 60 to 90 days so this will provide adequate time to get all the paperwork prepared to the satisfaction of the commissioners.”





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