City set to sue to force transfer of EDC loan fund
GLOVERSVILLE The Fulton County Economic Development Corp. and the city are continuing their verbal sniping over who’s stalling transfer of a $2.5 million loan fund from the EDC to Gloversville, even as the matter appears headed to court.
The city plans to file a civil suit in state Supreme Court next week to seek the immediate transfer of the fund, which the EDC has administered for more than 25 years. City Attorney Tony Casale said the EDC is seeking to place terms on the transfer that the city finds unacceptable and that the city wants the EDC to immediately transfer the funds to its control.
Mayor Dayton King said the city has “met with resistance at every step” in efforts to obtain the fund and that the impediments are delaying economic development efforts in Gloversville.
Mike Reese, president and CEO of the Fulton County Center for Regional Growth, the parent corporation of the EDC, said the city’s characterization of its efforts are false and that the EDC has negotiated in good faith with Gloversville officials over the transfers.
“We could literally write them a check today for the balance” in the loan fund, Reese said.
King said the Urban Development Action Grant loan fund has a balance of approximately $940,000. He said the EDC has made 14 separate loans totaling more than $1.5 million, including a $750,000 loan to Crossroads Incubator Corporation for the Estee Commons project. CIC is also a subsidiary of the CRG. King did not provide the time frame for the loans.
Reese said public comments by city officials over the negotiations “do not paint a fair picture of the work we have been doing together to transfer the Gloversville UDAG loan fund balance to the city.”
Reese said the EDC’s agreement with the city would spell out who is responsible for serving and collecting on existing loans. “Once it is out of our hands, we have little control over what happens,” he said.
Neither party would describe details of the contract and what the sticking points are between them.
Casale said Friday that he and the EDC’s attorney have been working on several draft agreements, with the most recent draft agreement changing hands two weeks ago. He said the city told the EDC it has rejected this proposed agreement and that city officials were waiting for EDC to respond. “Here is what is the frustrating part of this is: They had it on Oct. 2. On Oct. 3, I read that the EDC was saying we are holding up the process,” he said. “We were waiting on them. They have the city’s terms in hand and we have not received any counteroffer.”
Casale said the city is filing suit as a last resort to obtain the funds and does not consider negotiations to be a requirement of the process. “We are very far apart and I cannot see any reason for the city to accept the [EDC’s] terms,” he said.
Reese said the EDC is still willing to talk to the city. “We have not stopped negotiations,” he said.
Gloversville requested the return of the loan fund at the end of April. Upon this request, the EDC contacted the federal Department of Housing and Urban Development, which issued the loans years ago, to ensure officials were following guidelines in the transfer process.
Reese said once this step was completed, EDC drafted a contract that assigned the loans to the city and provided for the transfer of the loan fund account. After meeting with city officials, the EDC agreed to revise the contract.
“We have since forwarded a third revision of the contract for the city’s review,” he said. “Upon signature of this contract the loans will be assigned and the funds transferred immediately. It is in the best interest of everyone for the EDC and city to come to agreement so that economic development continues in the city of Gloversville.”
Reese said the EDC “is proud of its record of economic development success in the city.” Since 2005, the EDC has made 32 loans worth $3.5 million and has helped develop more than 470,000 square feet of new buildings in the Crossroads Industrial/Business Parks within the city of Gloversville. These projects generated $294,000 in property tax last year and have created and retained hundreds of jobs, he said.
“We are currently working with a foreign company that has an interest in locating a manufacturing facility in the city of Gloversville that will create new jobs and investment,” Reese said.