Glenville’s Local Development Corporation board is looking for two new members as it hopes to begin offering loans to businesses early next year.
The organization officially formed in June, so the town would be able to reuse $565,000 in Community Development Block Grant Small Cities grant funding that had been awarded originally to Solid Surface Craftsman owner Alan Boulant to expand his business.
Boulant has repaid the money, which can be used only for economic development purposes.
LDC Chairman Jim Martin told the Glenville Town Board last week that the start-up organization has been busy drafting articles of incorporation, registering with the state as a nonprofit and establishing an account with the state Comptroller’s Office. Now, it needs to fill two spots to make it a five-member board, draft legal agreements with the Town Board and develop a budget.
“Hopefully, this will be done by the end of the year,” he said.
The LDC wants to hand out loans of various amounts to help existing businesses expand or new ones open, upgrade infrastructure, buy equipment and hire people.
The application process will vary by the amount of the loan sought. LDC officials had stated previously that the so-called “micro loans” would be for between $5,000 and $10,000.
Businesses seeking the smaller loans would fill out a relatively short form, according to Martin. Those seeking more money would have to submit detailed business and financial plans.
Martin said the goal is to broaden the tax base in Schenectady County so it takes the burden off residents.
The LDC is looking for people with business and financial experience to get involved, according to Martin. There are plenty of opportunities because he expects subcommittees will be formed to handle functions such as reviewing loan applications, managing the organization and recruiting businesses. A Town Board member will be a nonvoting officer of the LDC board.
He hopes that these subcommittees would serve as sort of farm teams for people who would eventually move up to the LDC board. Sometimes, these organizations lose momentum as the first group of people leave the board.
Those interested in serving on the LDC board may call town Director of Operations James MacFarland at 688-1221.
The organization will also work with Metroplex, which has administered these type of programs in the past.
“There’s no sense remaking the wheel here,” he said.
Martin said the LDC would like to invest the initial pool of money so it earns interest and the organization can make loans using those funds, rather than the principal amount.
He added that he appreciated the confidence the Town Board placed in the group.
“This is taxpayer money and we are very, very cognizant of that. We take this role very, very seriously,” he said.
Town Supervisor Chris Koetzle said the goal was to keep these funds in Glenville instead of being returned to the federal government.
“If we did not do this, this community would have lost almost $600,000,” he said.
Martin also said he is aware of and supports the increased scrutiny that LDCs have come under with reports coming out of the state Comptroller’s Office about abuses in other economic development nonprofits.
In 2011, the Comptroller’s Office issued a report saying some municipalities were using LDCs to take debt off their books, get around competitive bidding laws or flout other regulations regarding use of public money. Also, last December, the state Authorities Budget Office issued a report in December criticizing Schenectady County for having seven separate economic development agencies given the county’s small geographic size and questioned how effective they were.
Metroplex issued a rebuttal, saying the report had inaccuracies and disagreeing with its recommendations.
“I think they can be wonderful tools — very effective, but at the same time they need to be watched and scrutinized,” Martin said.