ART-related business loan program ends quietly

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Copyright © 2019 Albuquerque Journal

Approximately 50 companies along the Albuquerque Rapid Transit System corridor received loans from a special fund created to survive the construction of the project. (Jim Thompson / Albuquerque Journal)

Two years ago, Albuquerque announced the launch of a special loan program to help companies affected by the construction of the Albuquerque Rapid Transit, which tore open Central Avenue and changed traffic behavior.

The Central Loan Fund “holds approximately $ 700,000 in donations from the McCune Foundation and private donors and continues to grow,” announced a press release by a spokeswoman for then Mayor Richard Berry on April 21, 2017. The city said some recipients may eventually be forgiven for their funds.

Although ART is not slated to go live until next year, the loan program is complete, according to WESST, the organization that managed it.

But it never loaned out $ 700,000.

WESST ultimately distributed approximately $ 490,000 to 47 companies through the Central Loan Fund, according to Kim Blueher, WESST vice president of lending.

Most of the other details about the program remain secret.

Berry said in 2017 that the city – which swapped some of its financial interests into a development deal to fund the loans – would publish the names of the companies that received the loans for transparency reasons. But when the Journal filed a public record request for a list of these companies, the city said it did not have such a document and referred questions to WESST.

Blueher declined to identify all loan recipients, saying WESST, a nonprofit small business development and training organization, was keeping such information secret.

“The details of the program were all confidential,” she said.

When asked about the $ 200,000 discrepancy between the $ 700,000 originally announced and the $ actually distributed, Blueher referred questions to Synthia Jaramillo, director of the city’s economic development department.

Jaramillo said $ 50,000 was spent in fees and administrative costs to run the program. WESST returned $ 150,000 in unspent money to the city a few months ago at Jaramillo’s request.

But Jaramillo said she couldn’t say why more money wasn’t pouring into loans.

“That is a question for WESST,” she said.

Blueher said the $ 490,000 covered loans to every company referred to WESST through the program, but a separate entity was responsible for accepting applications and determining who qualified.

That group of city-funded business consultants, the now defunct Small Business Resource Collaborative, referred 47 companies to WESST, Blueher said.

But have more applied and turned down?

Vanessa Roanhorse, who ran the SBRC, did not respond to messages from the journal about application numbers.

Some officials remain skeptical of the scope of the loan program.

Councilor Ken Sanchez – an accountant whose office is in the ART corridor – said he was not aware of any companies that had received an ART loan and he believed the “bureaucratic paperwork made it difficult”.

“They donated $ 490,000 in loans to various companies, but that was nowhere near enough for the time it took to build ART,” he said.

In fact, the city had announced that it had four times as much money at its disposal.

Drivers negotiate orange barrels during construction of the Albuquerque Rapid Transit project. The city announced a new loan fund to help companies affected by the ART construction in 2017, saying it has $ 700,000. The program now completed ultimately lent approximately $ 490,000. (Adolphe Pierre-Louis / Albuquerque Journal)

Officials announced in 2016 a goal of raising approximately $ 2 million for a new loan fund “to support small local businesses along the Central, particularly in areas affected by development projects such as Albuquerque Rapid Transit.”

The then director of economic development, Gary Oppedahl, later made it clear that the city intended to raise $ 1 million for the “guaranteed loans” – loans granted to recipient companies that met certain conditions.

But when the program finally kicked off in 2017 after months of delays – and six months of construction for ART – the city announced the $ 700,000 figure and announced that it “worked with WESST to manage the loans.” The state’s anti-donation clause prohibits the city from using public funds for individuals or corporations.

But the city played a key role in building the fund.

The McCune Charitable Foundation granted WESST $ 600,000 as part of a major deal in which the city released the Historic Downtown Improvement Co. from some financial obligations under downtown development agreements for buildings McCune owns.

Berry administration officials said in 2017 the deal was bigger than any future payments the city expected under those agreements.

But McCune’s money was limited.

It could only help companies in “metropolitan redevelopment areas” – districts that the city has identified as ailing. That would exclude most of Nob Hill and the University of New Mexico area.

“We knew there were a limited number of companies under the MRA, and the chances were they would not use all of the funding for loans to be diverted to another project,” said Henry Rael, McCune’s program director .

According to Jaramillo, the city of WESST recently asked for the balance and will be spending it on programs like Business Navigators and Incubators.

But Blueher – who said the loan fund also included money from the Albuquerque Community Foundation – managed loans to companies outside of the MRAs.

As described at the time, qualifying Central Avenue businesses could obtain loans of up to $ 15,000 at 3% interest. If they met certain conditions and were still in business for a year after construction was completed, they would be forgiven their balance.

Blueher said she couldn’t tell how many beneficiaries had their loans canceled or how many were in default. Some of them are closed, she said, but she couldn’t give a number.

She called it a “great program” and said WESST was happy to be part of it as she worked with the SBRC to provide advice and training in addition to the credits.

“To date, WESST has worked with a handful of these small companies,” she said.

The Bhava Yoga Studio in East Downtown was one of the Central Fund loan recipients. Co-owner Marisol Brito said the money helped cover basic operating costs during the ART construction and to help them recover from vandalism that occurred during that stretch. She said the free advice that WESST provided as part of the program was also valuable.

She said she and her business partner Mimi Ludden continue to meet with WESST on a monthly basis and expect the advice to help with further customer recruitment and retention.

“The fees for this type of advice would be something we, as a small business, couldn’t afford,” she said. “The loan gave us the ability to keep operations going and cope with unexpected costs, but also access to first-class advice.”

Brito said she looks forward to a possible surge in business once ART actually gets going, although it won’t be very soon.

Due to problems with the buses originally ordered for the route, the S-Bahn service is not expected to start until 2020 – more than two years later than originally expected.

Although the road on it was completed a year ago, some companies are still struggling along the route, although their main concerns now are crime.

In response, Sanchez and fellow councilors Isaac Benton, Pat Davis and Klarissa Peña are pushing for a proposal to invest up to $ 1.5 million along the central corridor to invest up to $ 1.5 million in fiscal 2020, which begins July 1, along the central corridor to help Bring customers back to the region.

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