October 18, 2011; Source: Salt Lake Tribune | As part of its economic development program, Salt Lake City maintains a business revolving loan fund. By rule, the fund excludes nonprofits. But earlier this year the Salt Lake City Council made a one-time exception that allowed the city to lend $600,000 to the Leonardo Museum after its opening had been delayed for months by construction problems.
Bob Farrington, who directs the city’s economic development program, told the Salt Lake Tribune, “Our loan program is geared to business loans, so we would have to take a look at how [lending to a nonprofit] might fit that program intent. . . . The council did make a one-time exception for the Leonardo. If they wanted to do that, it’s something they could consider.”
Apparently the City Council feels positive about the business value of loaning to nonprofits, since they recently unanimously voted to make another loan to a nonprofit—in this case to public radio station KCPW, which was seeking $220,000 in cash to pay off a loan due on October 31. Apparently a default might have threatened its FCC license. But the city’s lawyers have intervened, blocking the radio station loan for now. There is a chance that the city will allow the loan to be drawn from another source than the one already identified. We’d be interested in whether others have found these same restrictions in economic development loans.—Reginald Spears