More Violence Erupts Outside PEDP-Connected Nightclub
Monday, November 26, 2012
A South Side property whose owner is nearly 2,000 days behind on her $341,000 Providence Economic Development Partnership (PEDP) loan saw two men stabbed just outside of its doors over the weekend, GoLocalProv has learned.
Public Safety Commissioner Steven Pare confirmed that the stabbings occurred outside of El Macuto bar located at 1137 Broad Street, a location that has had several bouts of violence this year. According to the Providence Journal, the stabbings took place around the club’s 2am closing time.
"A man was sent to Rhode Island Hospital with non-life-threatening stab wounds around 2am on Saturday after officers found him lying outside Ada's Creations. The responding officers were controlling the crowd after several fights broke out. A second man was already in the hospital being treated for non-life-threatening stab wounds," said Public Safety Commissioner Steven Pare.
1137 Broad Street is a building owned by Ada Terrero, a well-known businesswoman who founded Ada’s Creations, which is located at the same address. Terrero is also listed as the President of El Macuto, according to corporate filings.
Years of Non-Payment
PEDP board meeting minutes show Terrero received a $140,000 loan for Ada’s Creations in April 2002 (under former Mayor Vincent “Buddy” Cianci) and immediately had trouble paying the money back. The PEDP’s board of directors agreed to grant Terrero payment moratoriums beginning in June of that year that extended through October 2003. In 2004, when then-Mayor David Cicilline became chairman, the board increased the loan by $200,000 so the business could complete renovations to its second floor. By January 2005, the PEDP board again voted to grant Terrero a six-month payment moratorium on the loan.
The free passes didn’t end there. When it came time to begin paying the loan in July of that year, the board granted her another six-month moratorium. In January 2006, another three-month moratorium was approved by the board.
And finally, the board, now chaired by Mayor Angel Taveras, voted last May to write off $153,402.08 of the loan. As of Nov. 16, records show Terrero still owes the city more than $195,000 (including interest).
A Taveras spokesman refused to comment for this story.
Councilman: Senseless Behavior
Aside from the severe delinquency of the loan, Terrero’s property has become a nuisance in the neighborhood over the last several years. Earlier this year, Ada’s Creations had its liquor license suspended for 11 days after a 19-year-old was shot in the establishment’s parking lot. In 2010, a 20-year-old patron was stabbed during a fight.
Earlier this month, Ada’s Creations was forced to appear in front of the licensing board again stemming from an assault that took place on Oct. 6.
“While I am deeply troubled by these acts of violence, we remain committed to working law enforcement agencies and ridding our city of this senseless behavior,” said City Councilman David Salvatore.
Salvatore did not wish to comment on the status of Terrero’s loan, but the Councilman has made a commitment to attempting to address the city’s flawed loan program. As chairman of the Council’s Ways and Means committee, Salvatore said he believes the Council should have more oversight over the PEDP. In the past, Thom Deller, the city’s former Planning Director and the head of the PEDP, informed Council members that he was not required to release certain information about loans distributed through the agency.
Earlier this month, Salvatore said he believes the Council should hold “quarterly oversight meetings” to monitor the PEDP.
“While the PEDP and its management team are responsible for the day-to-day operations, the Council's oversight should stop deficiencies before they reach the director's desk,” he said. “Just as the beneficiaries are responsible for their loans, so is the management team and the City Council for their respective duties and positions.”
Changes Coming to PEDP
Terrero’s loan is one of several dozen severely delinquent or defaulted loans that led the Department of Housing and Urban Development (which provides the loan funds) to issue a report earlier this year citing the city for a lack of “adequate oversight” of the program. The HUD report suggested that default rates on the loans were “approximately 60 percent” over a ten-year period beginning in 2002.
HUD, who has brought in a $375,000 “technical assistance team” to help turn the agency around, must sign off on all loans issued by the agency until further notice. The board isn’t expected to be given the okay to consider new loans for several months, an official said during a meeting several weeks ago.
Mayor Taveras has proposed sweeping changes to the way the agency grants loans, including stripping the ability of staff to sign off on loans under $75,000 without board approval. Taveras has also said he would like to merge the agency’s loan committee with a the PEDP’s 15-member board.
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