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The Board of Mayor and Alderman recently passed a $200,000 loan through the city’s Commercial Revolving Loan Program in a mixed vote of four to two.

In a memo from Finance Director Susan Wilson, it was outlined that the applicant was Northgate LLC requesting the loan for renovation and updates to Northgate Mall.

“The Loan Committee has reviewed Northgate LLC’s application packet and financial documentation and provided a positive recommendation,” stated the memo.

Wilson also outlined the Urban Development Action Grant (UDAG) Revolving Loan Program.

“The UDAG Revolving Loan Program was established in 1981 through an Urban Development Action Grant from the Department of Housing and Urban Development. The city has made 40 loans through this program, primarily for industrial job creation or retention. Loans are for up to 10 years at 4% below prime, adjusting annually, with a 1% floor,” the memo stated, along with detailing that “All loans are subject to credit check, financial and legal review, and must be secured. Loan payments are returned to the fund. Due to the size of the loans, the UDAG revolving loan program requires real property for collateral or some combination of real property and other assets.”

Mayor Pro Tem Jerry Mathis made the motion to approve, and Alderman Kurt Glick seconded. Before the item went to a vote, both Alderman Daniel Berry and Alderman Bobbie Wilson said they had aspects of the item they wished to discuss.

“Our packet doesn’t say what this is being used for,” said Berry. “I’ve done a couple of these before. None of them have had the application included, but they’ve always said ‘This is what we’re using that money for, this is how it either adds jobs or it impacts the economy.’”

He said there wasn’t a specific plan for use of the money outlined in their packet with the Northgate LLC application, and said he’d like to postpone the approval until they could get further information about how the money would be used.

Knowis quoted the memo’s statement that “the improvements will provide for additional employment, as well as generate additional sales tax and property tax,” but Berry said he felt that sentence was generic, not specific.

Bobbie also expressed her concern at the lack of detail in the memo, and that she agreed with Berry in hoping for further information.

She asked City Administrator Jason Quick if he could explain who is on the Loan Committee, and how they function. Quick deferred to Sue Wilson.

“The Loan Committee is currently comprised of the Finance Director and the Economic Development Director and two citizens with financial background. In this case, that would be Pat Williams and Dwight Miller,” she said. “We currently have a vacancy for a Mayor’s appointment there, too.”

She said they haven’t found someone who has a financial background that doesn’t have a conflict of interest, which is why the spot has remained unfilled.

“We evaluate different businesses’ confidential finances and we also make sure the loans are secured and then we go through an attorney to close the process.”

Bobbie Wilson said her initial concern regarded the loan going defunct, and asked how collateral worked. Sue said that the committee only accepts real property as collateral for a larger loan, and that there is a piece of property pledged in the application for the loan. She added that if a business does become delinquent on their loan, they will initially work with them since the whole idea is to foster economic development, but if they have issues, they work through their attorney.

Bobbie Wilson asked how many jobs would be created with the projects the loan would be used for.

Northgate LLC representative Linda Hawkersmith said she was not aware how many jobs the projects would create, but explained that a lot of maintenance goes into the upkeep of the mall.

Quick added that he understood from one of the owners that they were planning to do something with the courtyard which housed a fun tunnel, but that he was not sure what their exact plans were.

Berry said he still did not feel like they did not have a clear picture of what exactly the $200,000 would be used for.

Sue Wilson said they do not do specific employment tracking, but that they check on the projects and make sure they are progressing, and she said she watches the property tax, because typically they get more back, as the businesses have had growth.

Berry asked Hawksmith what the specific project is. She said remodeling for new tenants was part of the cost, since Northgate LLC has to do that on the front end.

Berry then made a motion to postpone until the next meeting in order to get further detail on what the money would be used for.

Glick seconded Berry’s motion, because he also would like further information.

The motion failed three to three, with Berry, Glick and Bobbie voting for postponement and Knowis, Mathis and Alderman Derick Mann voting against.

The original motion was made again by Mathis and seconded by Glick. It passed four

 to two, with Berry and Bobbie Wilson voting against.