AGENDA DATE: 12/9/2015
TITLE:
Title
Lewis and Clark Exploratory Center Request to Forgive Loan
BODY
SUBJECT/PROPOSAL/REQUEST: Consider Lewis and Clark Exploratory Center’s request to forgive loan
ITEM TYPE: Regular Action Item
STAFF CONTACT(S): Foley; Letteri, Davis, Kamptner, Allshouse, L.
PRESENTER (S): Bill Letteri
LEGAL REVIEW: Yes
REVIEWED BY: Thomas C. Foley
BACKGROUND: In March 2013, the Lewis and Clark Exploratory Center (LCEC) advised the County that its fund raising efforts had fallen short of its goal and requested a total of $260,000 in assistance from both the City and the County to ensure that the Lewis and Clark educational building, an access road and parking area, and a connecting trail network at Darden Towe Park were completed.
On April 3, 2013, the Board of Supervisors approved an appropriation of $130,000.00 in CIP fund balance to the Economic Development Authority (EDA) for the purpose of funding a loan for the Lewis and Clark Exploratory Center, subject to: 1) an agreement between the County and the EDA regarding the EDA’s reimbursement of the funds to the County when the LCEC repaid the loan to the EDA; 2) a note or some other instrument acceptable to the County Attorney by which the LCEC would agree to repay the loan to the EDA with a specific time table; and 3) the City of Charlottesville contributing or committing to contribute the other $130,000 required to make up the $260,000 shortfall.
The original note provided that the loan was to be repaid, without interest, by October 17, 2013. A 6-month extension of that payment date was granted by the EDA, extending the repayment date to April 17, 2014. The EDA granted a second 6-month extension to October 17, 2014, then granted a third 6-month extension to April 17, 2015 with the condition that the LCEC make a $1,250 payment in lieu of interest by January 17, 2015. The LCEC made the $1,250 payment on April 29, 2015. On June 9, 2015, the payment date was again extended to October 17, 2015, conditioned upon the making of an additional $1,250 payment in lieu of interest by July 17, 2015. The LCEC made a $625 payment on August 4, 2015 and a $625 payment on October 21, 2015.
On October 19, 2015, the LCEC requested that the EDA forgive the loan (see Attachment A). The letter stated that the LCEC’s financial situation continues to be challenging and that capital fundraising is hampered by major donors not desiring to donate to a building that is located on land owned by local governments. At its November 10, 2015 meeting, the EDA decided not to forgive the loan in its entirety as requested, wanted the current County-EDA agreement and EDA-LCEC promissory note to remain in place for now, wanted two EDA members to meet with representatives from the LCEC to figure out the possibility of restructuring the loan in a way that would allow the payments to be extended over time (even many years), and then return to the EDA for further discussion at its December 8 meeting. Fran Lawrence, on behalf of the LCEC, told the EDA that he would speak to the LCEC Board and if they were in agreement with restructuring the loan, LCEC representatives would come to the next EDA meeting with a restructuring proposal.
STRATEGIC PLAN: Goal 2: Prioritize, plan and invest in critical infrastructure that responds to past and future changes and improves the capacity to serve community needs and Goal 5: Provide lifelong learning opportunities for all our citizens.
DISCUSSION: On October 29, 2015, the Board of Supervisors received a letter from the LCEC requesting that the County forgive the County’s EDA loan to the LCEC (see Attachment B). The City of Charlottesville also received a letter from the LCEC requesting forgiveness of the City’s $130,000 loan. On November 16, the City supported the request to forgive the loan, conditional upon the County’s approval to forgive its loan to the LCEC.
BUDGET IMPACT: If the LCEC’s loan is forgiven, the EDA will not be able to reimburse the $130,000 in funds that were loaned to the LCEC back to the County’s CIP program.
RECOMMENDATION:
Recommendation
Staff recommends the Board consider this request. If the Board agrees to forgive the loan, the process would be either of the following:
1) The County could provide a donation in the amount of $130,000 plus any unpaid interest and late fees from the CIP Fund fund balance to the EDA on behalf of the LCEC conditioned upon the donation being used to pay off the loan. This donation would require a Board approved appropriation from the CIP Fund fund balance. Upon the repayment of the loan, pursuant to the agreement between the County and the EDA, the EDA would return the $130,000, as well as all interest and late fees collected to date, back to the County. The Board could then appropriate the proceeds back to the CIP Fund fund balance. An appropriation would be brought to the Board in January to fund this option.
2) The Board could request that the EDA forgive the loan and any unpaid interest and late fees to the LCEC and agree that there shall be no further obligation by the EDA to the County in this matter. This would be communicated to the EDA for its consideration and action.
ATTACHMENTS:
A - LCEC’s October 19, 2015 letter of request to the EDA
B - LCEC’s October 29, 2015 letter of request to the Board of Supervisors