CATSKILL — They’re supposed to help small local businesses grow, but the Greene County Legislature is in the process of liquidating more than $500,000 in Community Development Block Grant loans at a considerable loss.
The amount forgiven by the county on the 14 loans is close to $200,000.
Some county lawmakers are fuming over what they say is a waste of taxpayer money and blame the problem on a state mandate.
The Economic Development and Tourism Committee approved the liquidation of the latest and final Community Development Block Grant loan on Monday. The resolution, which authorized the county to buy back the $10,000 loan at $5,605 from Atina Foods in Catskill, passed the committee in a 7-2 vote.
The state is requiring all municipalities that use Community Development Block Grant funds to convert the loans into cash and use the money for eligible projects by March 31. To receive future funding, the county must form a nonprofit local development corporation to apply for the grants. A resolution to do that passed the full Legislature in November in a 9-5 vote.
Legislature Chairman Patrick Linger, R-New Baltimore, and legislators William Lawrence, R-Cairo, Harry Lennon, D-Cairo, Linda Overbaugh, R-Catskill, Larry Gardner, D-Hunter, Patricia Handel, R-Durham and Ed Bloomer, R-Athens voted for the loan buyback resolution Monday.
Legislator Michael Bulich, R-Catskill, opposed the resolution. Legislator James Thorington, R-Windham, was absent, which is counted as a no vote.
“This is nonsense,” Bulich said. “Be careful what you wish for when the government is where businesses go to for money. It’s such sheer stupidity at the state.”
A workshop for the Economic Development and Tourism committee will be scheduled to address these concerns, Tourism and Economic Development and Planning Director Warren Hart said.
The legislature previously liquidated 14 other loans from 12 businesses in November in a 9-5 vote. All the loans were liquidated at a considerable loss to the county.
Former Legislator Lee Palmateer, D-Athens, is a vocal opponent of the liquidations.
“Mr. Hart promised oversight,” Palmateer said in November. “This is our first chance to show oversight and we turned a blind eye. We’re authorizing a loan at $52,000 for a $144,000 loan. We’re giving away $92,000 of taxpayers’ money to one borrower.” Palmateer was referring to New York Spring Water’s $146,195 loan, which was forgiven after $52,312 in repayments had been made.
The other liquidations granted include a $31,866 loan to Just Pull Inn at $17,051, a $33,573 loan to C&C Excavating at $17,458, a $15,666 loan to New York Restaurant at $11,938, a $5,000 loan to Pippy’s Food Truck at $3,565, a $6,250 loan to Verdigris Tea at $4,133, a $7,143 loan to Marylyn Sewing at $4,482, a $26,429 loan to The Reed Street Bottle Shop at $17,112, a $20,600 loan to HiLo Cafe at $12,160, a $9,552 loan to Jagerberg LLC at $5,261, two loans for $18,803 and $9,763 to Cat Trax at $10,458 and $5,325, respectively, and two loans for $34,603 and $9,552 to Nordic House Owner LLC at $20,023 and $5,261, respectively.
The amount forgiven by the county on the 14 loans totals to $182,042.Two new grants
The committee also passed two new grants using the liquidated CDBG funds. The grants were awarded to The Tasting Lab and The Woodhouse Lodge, both located in Greenville. The Tasting Lab receives $80,000 and The Woodhouse Lodge $40,000.
“These are grants from the liquidation of projects,” Hart said. “Any uncommitted project income would be remitted to the state. These projects have been pre-approved by the state.”
Bulich asked about the applicants for the grants.
“Are these locals or transplants?” Bulich said.
“These are good economic development projects,” Hart said. “The owners of The Tasting Lab are locals. The people that bought the Woodhouse Lodge moved here and are making investments in the county. I consider that a good thing.”
Bulich inquired about any requirements the businesses have to fulfill.
“The main thing is a job-creation program,” Hart said, adding if that condition is not satisfied, the businesses could risk losing their funding.