AMERICAN FORK -- A 12-year-old fund set aside to help local businesses has had little activity -- although one businessman who was approved for the low interest loan has yet to receive it.
Businessman Bill Jacob brokered a 3 percent, $48,000 loan for six businesses that the City Council recently approved but won't release, resulting in a tug of war over the money. The city wants more information before releasing the funds. Jacob, meanwhile, is reluctant to furnish more data. "I don't know what more they want," he said.The Revolving Development Loan Fund originated with the sale of the old Chipman Warehouse in 1987. The interest rate can range from 3 percent to 5 percent. In more than a decade the money, now totaling about $61,000, has sat in an interest-bearing account and has been tapped only twice, in 1992 and 1993.
Those two loans, totaling $23,125 at 3 percent interest, went to Cindy Pack, who owns Little Things Mean a Lot, a factory outlet store. She has since repaid the loans, City Administrator Carl Wanlass said, but Jacob contends the loans were wrongly made to Pack. He says the money was earmarked for the central business district south of the post office on Merchant Street. Little Things Mean a Lot is outside that area.
However, Councilman Don Hampton said in a recent council meeting that a search of council minutes revealed no reference to City Council action limiting the scope of the area where the money could be loaned. Yet a memo Wanlass wrote to the city finance committee on Oct. 12, 1992, regarding Pack's request indicated the money had been limited. It said in part: "The funds she is requesting are those that were set aside from the sale of the old Chipman Warehouse and were originally intended to benefit the property owners to the South of the new Post Office."
At that time no other business had requested the money, Wanlass wrote. The council approved the first Pack loan of $8,600 at 3 percent interest on Nov. 10, 1992. The loan was for sumps, concrete, curb and sidewalk improvements and landscaping planter areas.
A second loan of $14,525 to Pack for property improvements was made the following year.
Limiting the funds to the area south of the post office was never discussed in council meetings, Wanlass said, so it wouldn't be in the minutes. Rather, his memo was based on discussions with former mayors. "Nobody (except Pack) had an interest in the money until Jacob brought it up," Wanlass said.
Loan criteria developed in February this year makes no reference to limiting the funds to the central business core south of the post office on Merchant Street, only that a business owner's property be in the central commercial zone or a zone with an historical preservation overlay. Applications are to be submitted to the city's finance committee. Only one other application has been received. That one was from Daniel Copper, who wants to refurbish the historic Star Mill into a conference center. The Star Mill isn't in the central business district but is in an historic preservation overlay zone.
Jacob owns Commercial Properties Inc., a central parking lot and a building he leases to Six Star Factory Outlet, all in the central core area south of the post office. His application said he wanted the money to repair an inner city parking lot, fencing, gate and Dumpster and put in a new concrete curb cut. The money would also be used to refurbish several downtown buildings that would include roofs, air conditioning, heating, painting and remodeling. The detail he submitted was deemed unacceptable.
Wanlass said officials have questioned whether the money should be brokered, although the council approved it on that basis. He said the council wants detail on how the money will be used from each business. It may have been better if each business had applied on its own, he said. The businesses are Alpine Lock & Safe, All Star VCR, Six Star Factory Outlet, The Yogurt Parlor, Christensen's Department Stores and Coast to Coast Stores.
It's not the first time Jacob has requested and not received a loan from the fund. Jacob said he made his first attempt for a loan in October 1992, another in September 1993 and a third try in December 1997 that was granted but never received. He applied again in March this year and again in April after the City Council said it wouldn't grant any loans until it received a redevelopment report from a local steering committee on upgrading the central business core.
Once that report was in, the council approved Jacob's loan request, providing he furnish more information on its use. Jacob still hasn't received the money. Recently he sent the city a demand letter, which failed to produce results. His next step, he said, may be to sue.