Akron may provide financial help to two struggling local agencies.
City Council is considering legislation that would give $158,000 to University Park Alliance (UPA) to help the agency settle its debts and up to $60,000 to East Akron Community House (EACH) to pay the agency’s rent and utilities over the next six months. The money wouldn’t go to EACH, but directly to the bank that holds its mortgage and the utility companies.
Council didn’t take action on either piece of legislation Monday and will take them back up next Monday.
To those who question whether Akron would be wasting its money by investing in the two financially strapped agencies, Mayor Don Plusquellic said the city needs to protect the investment it has made into the neighborhoods served by the agencies.
“This is a pittance,” he said of the amount the city is considering spending now, compared to how much it has put into these areas.
The legislation is the city’s latest attempt to help the two agencies, both in financial peril and the subjects of litigation. EACH also is under investigation by the state attorney general.
City Council approved a $600,000 loan guarantee in December to Valley Savings Bank to cover the amount UPA, an economic development group focused on the area around the University of Akron, owes the bank. UPA has faced an uncertain future since the resignation of its executive director and cancellation of $7.8 million in a grant and loan from the John S. and James L. Knight Foundation. UPA is mired in three lawsuits over breach of contract.
Plusquellic formed a task force earlier this month made up of prominent community leaders to examine and provide a plan for EACH, an agency that has provided social services to families and individuals, leadership in neighborhood organizations, and vocational and technical services to small businesses for more than a century. The task force held its second meeting Monday.
Ohio Attorney General Mike DeWine is investigating complaints filed by three elected officials alleging negligence at EACH and dereliction of duty by the leadership. The agency has lost nearly all operating funds and programs. A former employee filed a lawsuit against EACH, alleging financial misconduct, and Fifth Third Bank is suing EACH for foreclosure.
Plusquellic and Council President Garry Moneypenny have said they don’t want to give money to EACH, despite a request for financial help, while the agency is under investigation by the attorney general.
Plusquellic said Monday the aid he is suggesting would be enough to pay EACH’s mortgage, utilities and the back amount it owes Fifth Third Bank for the next six months, which is about $10,000 a month. Councilman Bob Hoch suggested during a committee meeting capping the assistance at $60,000, which Plusquellic agreed was reasonable.
The mayor said he has been talking to Fifth Third Bank officials about the assistance the city plans to provide in hopes of keeping the agency open. He said he doesn’t want the Youth Excellence Performing Arts Workshop, which is renting space at EACH, located at 550 S. Arlington St., to be without a home.
In terms of the assistance to UPA, Plusquellic said the city and the other UPA partners have agreed to contribute money to settle the debts the agency owes to several creditors, including a security firm and KUD, a project development company, which haven’t sued but that are represented by an attorney. He said these debts need to be paid before UPA can address its pending lawsuits with the owners of properties the agency planned to redevelop before its finances went south.
Plusquellic said the creditors are owed about $1.4 million, but all have said they will settle for significantly less, with some agreeing to half what they are owed. He said the settlement amount and how much the various UPA partners will contribute toward covering the cost are still being determined.
“This would allow them to wipe the slate clean,” Plusquellic said of UPA and its creditors.
David James, chairman of the UPA board and the Akron schools superintendent, said Monday the city is making a contribution to UPA “with hopes others will too.”
Stephanie Warsmith can be reached at 330-996-3705 or firstname.lastname@example.org. Follow on Twitter: @swarsmith and on Facebook: www.facebook.com/swarsmith. Read the Beacon Journal’s political blog at www.ohio.com/blogs/ohio-politics. Beacon Journal reporter Betty Lin-Fisher contributed to this report.