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Albemarle Supervisors not willing to forgive Lewis & Clark loan
Sally Thomas and Ken Boyd, November 1, 2017
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Credit: Sean Tubbs, Charlottesville Tomorrow
Former Albemarle Supervisors Sally Thomas and Ken Boyd ask for Lewis & Clark Center loan forgiveness
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Sean Tubbs | Thursday, November 02, 2017 at 9:14 p.m.

The Lewis and Clark Exploratory Center has failed to persuade the Albemarle County Board of Supervisors to forgive an emergency loan that was used to finish construction of the organization’s headquarters in Darden Towe Park.

“I think this would set a terrible precedent for Albemarle County,” said Supervisor Rick Randolph. “I think it would establish a moral hazard issue.”

The idea for a local commemoration of the westward journey of Meriwether Lewis and William Clark dates to the mid-1990s. Construction of the building and a new road in the park began in 2011 after the organization raised $1.25 million through donations and a federal transportation enhancement grant.

“All was going well until Mathers, our construction company, ran into rock and announced there was no way to deal with this except by the most expensive method because the building was already sunk into the ground,” said Sally Thomas, a former Board of Supervisors member and president of the Lewis & Clark board of directors.

“Blasting was not going to be an option, and, almost overnight, we found ourselves facing something that ended up being $260,000 in extra expense,” Thomas added.

Center officials asked the city and county to each loan $130,000 to cover the difference. The economic development authorities in both jurisdictions made the loans on an interest-free basis.

“This enabled them to finish the project as it is today,” said Bill Letteri, deputy county executive. “Because of the center’s inability to raise enough donations, they have been unable to pay the loan. … There have been three extensions of the loan.”

Letteri said supervisors could choose to convert the loan to a donation or ask the economic development authority to renegotiate the terms of the loan.

The Charlottesville City Council voted in November 2015 to forgive its portion of the loan, but only if the Albemarle Economic Development Authority and Board of Supervisors followed suit.

Thomas said the current loan repayment to the county EDA is $625 every three months. The center has another loan from a private individual.

“We’ve been in our new building for about a year and a half, and, in that time, we’ve discovered what we can and can’t do and have lots of ideas of increasing and improving our operations,” Thomas said. “But it’s a robust operation and we’re paying for our operating expenses and we’re finding that we’re a very popular site.”

The center pays $10 yearly to lease its location at Darden Towe Park, which is jointly owned by the city and county.

“If we fail, we’re yours,” Thomas said. “If we succeed, we are adding year by year more to the asset that is yours.”

Thomas said the work gave the city and county 20 additional parking spaces in the park. As such, Thomas argued that was enough justification for the loan to be converted to a donation because a public service had been provided.

Supervisors Norman Dill and Ann Mallek said they supported forgiveness. Both serve on center’s board of directors.

“I see the acceptance of the fact that the organization has raised the money,” Mallek said. “It wasn’t that they failed at grants. They delivered $1.6 million worth of asset to us in the building, the road and a parking lot.”

The chairman of the Albemarle Economic Development Authority said his board wants the organization to succeed, but urged supervisors to uphold the loan.

“A loan is made to be repaid, and if it can’t be repaid, the business isn’t viable,” said Rod Gentry, who is also banker with Union Bank & Trust. “Giving money to a business that isn’t viable is not a good practice, especially taxpayer’s money.”

Former Supervisor Kenneth C. Boyd also appeared before the board to make a plea to convert the loan to a donation.

“It was always our intent to make this a gift to the Lewis & Clark center,” Boyd said. “It was never intended to be a loan, but we were in a circumstance whereby it was a legal requirement for us to make it an EDA loan.”

A majority of supervisors indicated they wanted the money to be repaid.

“No matter what the discussion was historically about the terms of this loan, the reality is that it’s a loan and needs to be repaid,” Randolph said.

“I would encourage the folks at Lewis & Clark to go back to the EDA and work with them,” Supervisor Diantha McKeel said. “We all went them to be successful.”

The item is slated to go back to the EDA for a discussion at its Nov. 21 meeting. It will then come back to the Board of Supervisors at their Dec. 6 meeting.

 

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