ELYRIA — Remember that $3.4 million windfall the city received in 2013 when the Ohio Department of Commerce hailed Elyria as the recipient of the largest amount of unclaimed funds in Ohio’s history?
Well, the city has about $900,000 of it left, and Mayor Holly Brinda wants $500,000 of it to go to the city’s Community Improvement Corporation that possibly will loan it to a company that wants to move its headquarters to Elyria. The company, which has not been publically named, is eyeing the former Macy’s department store for its new location.
The leftover money came from funds released with the completion of the state Route 57 reconstruction. The city’s share was less than originally thought, which gave the city the funds for the CIC donation.
Brinda said the money will help finance the purchase of the building and any renovation needed to make it viable for the company.
“This was one of the main reasons for the creation of the CIC, to meet this need for gap financing for projects that otherwise would not get funding,” Brinda said. “This is an example of how we can leverage our ability as a city to help create a prosperous business.”
Once the city makes the donation to the CIC, city officials no longer will have control over the money, and the CIC will be able to use it in perpetuity to advance economic development efforts.
This worries some City Council members.
City Councilman Marcus Madison, D-5th Ward, questions if checks and balances would be lost with turning the moving over to the quasi-public entity.
Madison also wants to know what would make this gap financing loan program different than the revolving loan program Elyria has that is geared toward the downtown area.
That program has not been widely successful.
Brinda said the revolving loan fund uses Community Development Block Grant funds, which come with guidelines and reporting standards that are spelled out by the U.S. Department of Housing and Urban Development, and is smaller in scope. Both factors play into how local businesses can use the program.
Beyond Brinda, Councilman Jack Baird, R-at large, also is on the CIC board and acts as the voice for Council. Pete Duffield, chief finance officer for R.W. Beckett Corp., also is a board member.
Council members heard more about this project during a recent executive session, which also is shielded from public purview. When questioned about the company Brinda said she could not answer any questions as she signed a confidentially agreement as president of the CIC that bars her from discussing the matter.
Despite reservations, some Council members seem open to gifting the funds.
“I know it’s a big chance to take, but it’s a good way to utilize these funds,” said Councilman Vic Stewart, D-at large and chairman of the Finance Committee.
Brinda said the company has promised at least 22 new jobs to start and if they qualify for the loan — its not a given until the CIC vets the entire proposal — employment goals and terms of repayment will be in the contract.
Brinda said the company already has some financing in place for their project, which is help in qualifying for the gap financing loan.
“In this particular project, we think it will be a catalytic project in the Midway Mall area, which is what we need right now,” she said.
More about the project will come out in recent weeks when Council discusses the creation of a enterprise zone agreement as a part of the deal.
Enterprise Zones are designated areas of land in which businesses can receive tax incentives in the form of tax exemptions on eligible new investments. Enterprise Zones are not part of the traditional zoning program — which limits the use of land — instead they allow local officials to negotiate with businesses to encourage new business investment in the zone.
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