By Barney Blakeney
A firestorm ignited last month when newly-elected Charleston Councilman Jason Sakran proposed using $4 million being held by the city’s Local Development Corporation designated to fund affordable housing initiatives instead be used to assist small businesses in financial crisis due to the Covid pandemic probably has been extinguished, but not without leaving some scorched.
The Local Development Corporation (LDC), established in 1979, is a non-profit created by the City of Charleston to provide flexible business lending products along with technical assistance to women-owned, minority-owned, low-income, veteran, and other underserved business owners. The LDC also helps in the funding of affordable workforce housing projects through effective and flexible programs around the greater Charleston area.
A complicated financial saga that began some 40 years ago with the Riley administration’s direction of federal Urban Development Action Grant money to the former Charleston Place Hotel finally repaid last year, evoked déjà vu when Sakran proposed $4 million of the repaid money again be redirected to business.
Urban development action grants were made to cities and urban counties to provide housing for low and moderate income persons, equal opportunity in housing and employment for low and moderate income persons and members of minority groups. Under the Riley administration some of that money was loaned to Charleston Place. The loan wasn’t repaid for 36 years after Charleston Place ownership changed hands several times. During those years Charleston’s majority Black residents reeling from white flight was displaced.
After some 30 years of gentrification and redevelopment the money was repaid to the LDC in 2016. A legal battle ensued resulting in an agreement that the majority of $22.8 million repaid would go toward helping solve the city’s affordable housing issues. The LDC would transfer $10 million to Charleston for use in the development of affordable housing. In addition, the LDC would establish a permanent revolving fund for affordable housing development loans with $9.2 million. The remaining $3.6 million would be used by the LDC to provide small business loans in the city of Charleston, and potentially other parts of the region if necessary to find enough qualified applicants.
Sakran sought $4 million of the $9.2 million to fund a ‘crisis’ loan program for small businesses experiencing hardship due to Covid. He initially met with city officials to discuss the proposal, then with several councilmembers. None of council’s three Black members were invited to the meetings. He said, in retrospect, that was a mistake. He invited all councilmembers in a March 18 email to discuss the proposal prior to presenting it to full council. At council’s March 24 meeting the proposal was deferred, essentially squashing it, said Councilman William Gregorie.
Sakran made another unsuccessful pitch to secure the funding at Monday’s Community Development Committee meeting. Committee chair, majority Black Dist. 4 representative Robert Mitchell said council is committed to leaving the affordable housing designated money in place. But everyone recognizes the need to assist the city’s small business owners, especially minority business owners, in this time of crisis, he said. City officials would like to provide them some assistance, but the money just isn’t there, he said.