HUDSON—F. Michael Tucker, the new interim executive director of the Columbia Economic Development Corporation (CEDC) reported to the Economic Development Committee of the county Board of Supervisors this week on his review of CEDC operations. He also asked that the board restore the agency’s funding for this year and continue its support in 2016, proposing that the CEDC reimburse the county for a controversial land deal.
Earlier this year supervisors cut off funding for the CEDC, budgeted at $437,000 per year paid quarterly, pending a review along the lines of the one Mr. Tucker unveiled at Monday’s meeting.
In a presentation that ran almost 90 minutes, Mr. Tucker included a detailed review of business loans made by the CEDC revolving loan fund and federal Small Business Administration loans that the CEDC administers in Columbia and Greene Counties.
Of 26 CEDC loans, totaling $1.1 million and on the books since 2009, six are in arrears, ranging in amounts from $368 to $39,684. That largest amount is past due from Greenport Crossing, the gas station and small plaza with a proposed hotel on Route 66. That project received a $35,000 grant and a $150,000 loan at 3% from the CEDC but has since declared bankruptcy.
Interest rates for the CEDC loans ranged from 3% (on three loans) to 8.5% (on two loans). “I sat through a Loan Committee meeting,” said Mr. Tucker, “and there was a lot of dialogue, and questions,” but no system for setting interest rates, in his observation. Setting rates cannot be random, he said, “there has to be a system.”
Of 30 SBA Micro-Loans, totaling $387,404 and on the books since 2009, three businesses have amounts past due that range from $223 to $1,244; the total is $1,828. CEDC staff calls those in arrears, and they come in with partial payments, said Mr. Tucker.
The total loan balance is $1.9 million.
Under grants, the fish farm Local Ocean, to which CEDC granted $167,500, has gone out of business. The other three grantees are still actively in business.
“The only loans in trouble are the big ones,” said Mr. Tucker, referring to Greenport Crossing and the Local Ocean grant. “So maybe on the big ones, get some outside analysis,” by commercial lenders in the area.
Mr. Tucker, president of Tucker Strategies in Albany, then reviewed loan applications and the process for dealing with them. Between January 2010 and June 2015, he reported, 56 businesses applied for loans from the CEDC and of those, 43 were approved.
Staff, in the form of the CEDC’s loan officer with oversight from its executive director, at that time county Planning Director Kenneth J. Flood, reviewed the applications and staff turned down 13 applications and sent the other 43 to the CEDC’s Loan Committee. The committee–a minimum of five people–recommended all 43 applicants to the full CEDC board, and the board approved them.
It sounded like “board was influenced by leadership,” said Supervisor Arthur Baer (D-Hillsdale), “that there wasn’t a lot of independent thinking on the part of the board.”
Mr. Tucker wound up his presentation by asking that supervisors restore currently budgeted CEDC funding and allocate $437,000 for the agency next year. The agency currently has $550,000 in unrestricted funds and $500,000 in restricted funds to replenish the revolving loan fund. Its expenses currently are $40,000 per month above its income from sources other than the county. “Without your support,” Mr. Tucker told the committee, “in 15 months we’re out of money.”
In exchange for this commitment, Mr. Tucker said he would ask the CEDC to reimburse the county $116,000 for the land sold to Ginsberg’s Institutional Foods for $1 for the company’s expansion. Further, he said, he would ask the boards of the CEDC and the Industrial Development Agency to each pay the county $25,000, the county’s $50,000 share of the $2-million bill from McKinsey & Co. for consulting on the regional Upstate Revitalization Initiative. He said that amount is related to economic development.
He said that in seeking the restoration of CEDC funding, “I put two pieces of monetary value on the table.”
Concluding his presentation Monday, Mr. Tucker noted that the CEDC had made some 50 small business loans in the last five years. “These are loans that no one else makes,” he said, and “most got in and out and paid their bill.” He said he now wants to help the CEDC focus on attracting new business and preparing the region for growth.
Supervisor John Reilly (R-Gallatin) chairs the Economic Development Committee. In addition to Mr. Baer, members are Sarah Sterling (D-First Ward, Hudson), Ellen Thurston (D-Third Ward, Hudson), Erik Tyree (R-Taghkanic), Art Bassin (D-Ancram), Joel Craig (R-Germantown) and Robert Lagonia (Austerlitz), who was the only supervisor absent from the meeting.