Nonprofit Newswire | Failed Community Center Receives Unusual Reprieve

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September 8, 2010; Source: The Chronicle-Telegram  | In Lorain, Ohio, the St. Joseph Community Center is apparently too important to fail and so the city has devised an unusual “ownership” structure to keep it open. The center ran into problems early this year when its parent organization, South Shore Community Development Corporation, ran out of money and agreed to have the city take it over.

Now the city wants to give it back, but before it does the South Shore board must resign. A controlling number (5) of seats on the board will be given to a California based for-profit developer, Industrial Realty Group (IRG). The city will take 3 seats and the county will assume the last.

As far as we can discern from the article, the board will then contract to IRG (with contract approval being required by city and county) for management of the facility. IRG has a local track record for developing and managing old facilities, among them an old Ford assembly plant which is being converted to an industrial park and a luxury community on the site of an old quarry.

As part of the scheme, the state has agreed to forgive half of a $2.7 million loan to South Shore CDC that was standing in the way of its future. The president of South Shore’s board appears accepting of the new arrangement and others who use the VA clinic are hoping that this might indicate that a corner is being turned on the troubled facility.

The city has obviously worked hard to set the deal up with multiple partners. Still, the governance structure seems questionable. What do you think?—Ruth McCambridge