NEW: Mayor Taveras Proposes Sweeping Changes to PEDP Board
Wednesday, November 14, 2012
Providence Mayor Angel Taveras is calling for sweeping changes to the way the embattled Providence Economic Development Partnership (PEDP) distributes loans to small businesses, the Mayor said Wednesday.
The PEDP has come under fire over the last year after GoLocalProv first reported that a quarter of the loans issued by the quasi-public agency were at least 90 days past due, potentially leaving the city on the hook for over $3 million. A Department of Housing and Urban Development report issued this summer suggested that the default rate over the course of a decade was “approximately 60 percent.”
Under Taveras’ proposal, all PEDP loans would be subject to board approval and the agency’s loan committee –which is currently separate from the board— would be rolled into the 15-member board chaired by the Mayor.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTUnder Congressman and former Mayor David Cicilline, the PEDP altered its bylaws to allow loans under $75,000 to be approved by staff and created the loan committee to approve all other loans.
Taveras said his plan will have to be voted on by the board, but noted that he appoints all the members.
Separately, HUD officials were in town for a board meeting to give members a crash course on Community Development Block Grant (CDBG) funding, which is how PEDP receives its loan funds.
HUD, which has brought in a $375,000 technical assistance team to help reform the PEDP, must sign off on all loans issued by the agency until further notice. The board isn’t expected to be allowed to consider new loans for several months, an official said during the meeting.
Dan McGowan can be reached at [email protected]. Follow him on Twitter: @danmcgowan.