Columbia releases records about embattled loan program
Tue, 06 Mar 2012 03:18:29 GMT —
COLUMBIA, SC (WACH) - Since former Columbia loan officer Scott Blackmon left his city of Columbia job last June, the ex-banker has been telling anyone who will listen there are big problems with a city loan program that has the attention of the federal government.
City and federal dollars go into a program the U.S. Department of Commerce has been reviewing since last spring. The Commerce department has frozen all loans issued from its grants until they get a better idea of how the money is being accounted for. The Department of Housing and Urban Development has put the city's books under the microscope.
Blackmon called the shortcoming of the program "uglier than ugly" shortly after the ex-banker walked off the job, convinced he could do nothing to fix the problems he saw.
According to documents released to WACH Fox News Monday, 5 of the city's 32 active commercial loans are in default. Six months ago it was closer to a dozen. There is roughly $140,000 owed to the city by borrowers.
Blackmon says those are only the figures released, pointing out there could be even more money owed from loans that have been written off as uncollectable.
"It's just wrong," said Blackmon. "At some time you have become a banker and say it's time to do what you need to do."
Officials confirm some loans closed before 2006 have been written off.
Columbia's community development office says they have beefed up efforts to recoup cash in recent months by re-organizing the office, reviewing procedures, and improving communication with attorneys and lenders involved in the loan program.
"We have been able to bring our default ratio down," said Tina Herbert, director of Columbia's Office of Business Opportunities. "So we are currently going from fund to fund to and reaching out to those borrowers to see if there's any way we can work out their loans with them."
The city loans are geared to businesses that would not normally meet muster with traditional banks and are aimed at creating economic development in the community.
"We're not just looking at money coming back in," said Herbert. "We're looking at criteria such as job creation, we're looking at elimination of blight."
In July 2010, city leaders cut the ribbon on the crown jewel of the empowerment zone loan program along North Main Street. A Cici's pizza restaurant opened its doors. A little more than a year later it was gone and owed hundreds of thousands of dollars. The city pursued legal action to resolve the issue.
Recently, officials also filed a lawsuit against Vista Lady, LLC. That group owes more than $50,000 and hasn't paid the city since February 2010. Vista Lady's Lincoln Street building sits largely vacant.
"We want to be good stewards of the city's money and of taxpayers' money," said Herbert.
Still, critics like Blackmon want to see better safeguards in place to ensure there is a better return on taxpayer dollars.
"I understand you have be lenient because these are not bankable clients and I understand you have to careful with them," said Blackmon. "But, there's no reason in the world you can just give money out and not worry about it and expect the taxpayers to pay for it."