A grant and low-interest loan for a total of $7.8 million, awarded to the neighborhood development group University Park Alliance has been canceled by its major funder, less than three months after it was put “on hold” and just eight months after it was awarded.
While the John S. and James L. Knight Foundation has canceled the grant, it has awarded UPA $500,000 for operational costs to help it continue operations to January 2014, said David James, chair of the UPA Board of Directors and the Akron Public Schools’ superintendent.
Knight Foundation has also invited UPA, a nonprofit working on an area of 50 city blocks around the University of Akron, to reapply for a new grant, said James in an interview on Friday.
“It may be a large grant, but it may be a series of smaller ones as we take our three big real estate projects and still work on getting those back on track,” he said.
The organization is also considering changing its model away from developing real estate and instead acquiring property and selling it to a company that would agree to develop it according to UPA goals, said James.
The cancellation of the Knight grant did not come as a surprise, said several board members also interviewed Friday. In fact, it was expected since the real estate projects tied to the original grant have significantly changed in scope or stalled.
Akron Mayor Don Plusquellic said the $500,000 that Knight is still awarding UPA is a “good indication that they’re not walking away from Akron, they’re not walking away from this UPA organization.
“But it helps us keep this going ... while we’re putting together a longer term plan of what we’re going to do,” said Plusquellic, speaking by telephone from Salt Lake City, where he is attending the U.S. Conference of Mayors convention.
Jennifer Thomas, Knight Foundation program director for Akron, who also sits on the UPA board, said the grant “was canceled because the assumptions which the plan was previously based are no longer accurate.
“What UPA has decided it wants to do is re-evaluate and if in the future they develop a proposal with an appropriate role for Knight, the foundation will absolutely consider it.
“The Knight Foundation has a really long and deep commitment to Akron and economic development and social well-being in Akron. We have significantly invested in the UPA concept over many years,” said Thomas.
Projects miss deadlines
The Knight Foundation put $6 million of its UPA funding “on hold” in May because terms and deadlines related to real estate projects were not met. UPA had also been awarded a $1.8 million low-interest loan for a project called University Square near East Exchange and Brown streets. While that project has not been abandoned, James said it is being reworked and the loan will not be taken.
Knight Foundation had previously given UPA $500,000 of its original $6 million loan, so with the new money, it will receive about $1 million, said James. In all, Knight’s total investment in UPA since 2002 has been $13.75 million, the organization said.
The loss of funding in May from the Knight Foundation caused financial hardships for UPA. An already small staff was cut and the organization stopped paying bills to consultants while suspending their contracts.
Prior to the funding being temporarily cut off, UPA Executive Director Eric Anthony Johnson resigned in early April.
The organization is continuing without an executive director for the time being. James said he has asked UPA board secretary Patrice Lange, system vice president of Summa Health System, to lead a small group on the board to work with staff and partners on priorities and plans.
Lieberth completes work
Former Akron Deputy Mayor David Lieberth on Wednesday finished a 90-day stint as a consultant to sort out UPA’s actions under Johnson for the 16-member UPA board, which includes CEOs and heads of major companies, government entities and institutions such as the University of Akron, Summit County, the Greater Akron Chamber, the Akron Beacon Journal and the city’s three hospitals.
Lieberth on Friday said he was pleased with the work he was able to do in his three months. He said he examined contracts negotiated by Johnson and represented the organization in its activities.
Lieberth’s compensation was $90 per hour with a self-imposed 30-hour-a-week cap. Lieberth on Friday said he was able to do the job in less time per week and will be billing less than half of the anticipated rate of $48,000.
James said he anticipated previously stalled payments would be made to many smaller contractors. Plusquellic and fellow UPA board member Tony O’Leary, the executive director of the Akron Metropolitan Housing Authority (AMHA), said there were questions whether others will or should be paid for their work, or whether UPA will challenge some of the billings.
James said the $500,000 will go toward operations and work on community projects. Lieberth said he was extremely impressed with what was called a robust Neighborhood Network of community members, including an active group of pastors in the geographic area.
James said UPA could move forward with its first project — called Market Square at East Market and Forge streets — as the developer or sell the property. The project includes a newly constructed building, home to the Child Guidance & Family Services offices. James said phase two of the project, which would include a complementary building, is continuing.
Other plans call for work at University Park Village, a housing development adjacent to Spicer Village between Brown and Kirn Streets at Crouse Street, said James.
In a news release issued Friday, UPA said collectively, its partners have invested $322 million in the last decade in the 50-block area.