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Gloversville will sue to control $2.5 million loan fund

Thursday, October 11, 2012
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— The city will sue the Fulton County Regional Center for Economic Growth to gain control over a $2.5 million revolving loan fund the center has administered for years under contract.

City attorney Anthony Casale said he will file the civil suit soon in State Supreme Court in Fulton County. The Common Council authorized the action Tuesday night.

“The contract has expired and we are trying to get control of the loan fund,” Casale said. “We have been trying to facilitate the transfer of those funds and the EDC is treating it more as a negotiation.”

The Fulton County Economic Development Corp. was operating the loan fund until that function was taken over by the CRG, the newly formed parent corporation of the EDC and its sister agency, the Crossroads Incubator Corp.

Casale said the economic development agency has placed “too many protective provisions” in legal agreements to transfer the loan fund to the city. He would not provide details of the provisions.

“Given the extensive negotiations we have had and given the length of time we have given the EDC to transfer the funds, litigating is the final resort,” he said. “We are seeking immediate transfer. We want the funds without having to agree to the terms the EDC seeks.”

Mayor Dayton King had earlier said the city had been worked with the CRG for nearly a year to facilitate the transfer of the loan fund. “We have been met with resistance at every stop with representatives telling us that they need to check with the Buffalo office of [the federal] Housing and Urban Development Agency and their attorney is working on the language to make this happen,” he said. HUD provided the original funds to the city some 30 years ago.

He said he has grown frustrated over the process and that the delay in transferring the fund to the city is hampering economic development. “This will provide more places for people to dine, shop and work as well as provide increased sales tax for the city and county, while potentially decreasing homeowners’ property taxes,” he said.

“The one thing that stands in the way of all of these businesses is that the CRG continues to hold on to the city’s Urban Development Action Grant Loan Pool money.” CRG President Michael Reese was not available for comment.

 
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