Explanation
BACKGROUND: The Economic Development Division has had a small business loan program since the early 1980's. The program includes the Business Development Fund Loan (BDF), the Working Capital Loan (WC), the Neighborhood Commercial Revitalization (NCR) Loan Fund and the Urban Site Acquisition Loan (USAL). This loan program has been funded by both Community Development Block Grant (CDBG) and Urban Development Action Grant (UDAG) funds and $3,422,260 of Capital South revenue monies authorized under ordinances 2494-2000 and 1173-2001. Over 341 loans have been closed with small businesses located in the City of Columbus, totaling over $34,500,000 and creating over 900 jobs. Since its inception the Economic Development Division has not written off uncollectible loans each year. Now, some 27 plus years later, eighty-three (83) uncollectible loans totaling $6,936,007.66 plus accrued interest needs to be written off the City books. This averages out to 3 uncollectible loans per year. A complete list of the uncollectible loans is attached as Exhibit 1.
In 2004 the City of Columbus contracted with Community Capital Development Corporation (CCDC) to under-write, service and monitor the economic development loan programs. The City began to work with the CCDC to market the loans as part of a unified, one-stop, financing mechanism for businesses. CCDC has successfully closed over 30 City of Columbus loans since 2004 creating over 90 jobs. None of the eighty-three (83) uncollectible loans are attributed to loans under-written by CCDC.
This legislation authorizes the City Auditor to write off, as uncollectible, eighty-three (83) loans and to release any mortgages associated with these uncollectible loans.
Emergency action is requested to allow the loans to be written off the City books by the end of 2009.
FISCAL IMPACT: $6,939,007.66 in uncollectible loans plus accrued interest needs to be written off the City's books.
Title
To authorize and d...
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