On Monday, City Council took up a measure regarding a $75,000 lien on the current location of the SAFE Homes-Rape Coalition building. The group recently purchased a new building that sits outside city limits and provides nine additional beds to shelter victims of domestic violence and sexual abuse. The $75,000 lien stems from a grant provided by the city 19 years ago to the group to purchase their current building. The terms of the original grant provided that SAFE Homes would have to repay the grant if the original building was sold or if the group failed to provide services to city residents.
SAFE Homes Executive Director Lynn Hawkins said the group was unaware of the exact terms of the original agreement until after speaking with attorneys when preparing to sell the group’s old property. The property is expected to sell for around $300,000 She asked council to forgive the $75,000, and for their “support†on the matter stating that 1,300 city residents were helped by one of the group’s programs last year and that the new location, though outside city limits, would continue to serve many people living in the city.
Councilman Junie White moved that the city forgive the original loan, noting that the amount of the grant when spread out over 19 years amounted to around $4,000 per year. His motion was not seconded.
City Manager Ed Memmott then provided council with an alternative that would allow council to transfer the existing lien to the new location. When questioned about transferring the lien for a city nonprofit to a location outside the city limits, Memmott said that although the new location was outside city limits, the transfer is acceptable because the group will still be providing services to city residents.
Memmott’s proposal passed 5-1 (Councilwoman Renee Cariveau was out of town on business) with Mayor Barnett voting against the measure saying that he was concerned about the precedent that would be set by transferring the lien.
City Council also voted unanimously to on to approve the first reading of a development agreement for the redevelopment of the former Abby’s Grill location on Morgan Square.
The measure passed provides Calvert K. McCorkle Revocable Trust with a development grant for 10 percent of the redevelopment costs up to $10,000. The building’s future tenant Cornbread to Caviar LLC can receive up to $20,000 contingent on certain job creation requirements the specifics of which are to be added as an amendment to the measure’s second reading.
City Manager Ed Memmott said the building is a “key location†on Morgan Square and that the new restaurant should provide around 20 full-time and 20 part-time positions when it opens in the fall.
Christopher George
I think I get the Mayor’s point. If every group the City works with transferred their debt in this way, it easy to see how it would start to become an issue. If I understand correctly, it could be easily abused by groups that get City’s financial help to get a downtown building and renovate it, then essentially flip the space for a profit and transfer the lien to a new property. That’s almost like the City paying for someone else’s mortgage on an investment property, effectively making the lien into an asset rather than a debt. And while that might be OK within the city limits, what’s happening in this case is that the city is funding a building outside of the city — investing in the county — with city funds. That’s not something you want happening regularly.
I understand the point, but at the same time it’s not as though you’d HAVE to make the same deal for every nonprofit. City Council still gets to decide those things on a case by case basis. $75,000 from 19 years ago that the city was never planning on getting back in the first place isn’t exactly what I’d call a big deal when we’re talking about the SAFE home. I’d feel differently for some groups, but then again I got the impression that this wouldn’t have sailed quite so easily if it had been another group.
I agree with Mr. George. Our city is not so large and overrun with bureaucracy that it cannot tackle such issues on a case by case basis. (And I certainly don’t think anyone would argue that SAFE Homes is seeking to profit in any underhanded way.) I would have been very disappointed in our city had they failed to pass this proposal.
I’m not trying to imply that they were doing anything shady at all. I’m just saying that I see the Mayor’s point about the precedent. SAFE getting a break here could very well encourage other groups to ask for the same consideration. In some cases, it would be justified, but it’s not difficult to see how it could be abused should it become a standard thing for the city to do.
But I agree that it’s perfectly appropriate to make this kind of call on a case-by-case basis. Now that it’s happened once, however, there might be many more such requests. Not a bad thing, but definitely something to be handled carefully.