Council approves CIC loan for new company

Elyria City Council voted Nov. 6 to make a $500,000 donation to the city’s Community Improvement Corporation, also known as CIC, for a possible business that is planning to occupy the former Macy’s site at the Midway Mall.

Elyria Mayor Holly Brinda announced in October she wanted to give the donation to the business from the city’s remaining $900,000, which are from funds released from the completion of the state Route 57 reconstruction.

According to the city’s ordinance, Finance Director Ted Pileski would have to make the donation to CIC from Elyria’s De-mutualization Fund in order to create a gap financing loan which was presented as an emergency.

The ordinance implies the loan would have to take effective immediately, but because of a few members opposed or were absent from the meeting, the donation will be made after a 30day delay.

Councilwoman Donna Mitchell was absent from the Nov. 6 meeting and councilmen Mark Craig and Marcus Madison voted against the ordinance.

Therefore, the emergency label did not have enough support.

During the meeting, Craig said he was struggling to see how the donation is labeled under an emergency and the legislation should give the ordinance three reads before voting on the situation.

He said there is plenty of time to make sure they are certain if it’s a project that will move forward.

Councilman Jack Baird serves on the CIC board along with Brinda and he said he understands Craig’s concern.

Baird, however, said the project will be a good addition to the city.

“They (CIC) want to be ready for everything to go and move forward,” he said. “If it doesn’t work, then it could go for other situations.

“The sooner they move, the better situation they’re in to make it go smoother.”

Madison also showed his concern for the project on the finance side of it.

He questioned if the CIC had a recovery plan in order to move forward if the project doesn’t go through.

Madison said his uncertainty focused on the funds that would no longer belong to the legislation and would fall under the CIC’s responsibility.

Law Director Scott Serazin said if the plan doesn’t go through, it’s up to the CIC to decide what to do with the money.

Serazin said if CIC wants to keep it for other actions involving financing or anything else that would involve improving Elyria, the CIC would take advantage of their options.

He said CIC also has the option to transfer the money back to the city.

“I think the idea of the CIC is that they can move with greater confidence in its dealing with potential investors,” Serazin said.

Brinda said the state legislature created CICs so that public entities could help other areas that are endangered or corrupted.

Due to devaluation in the Macy’s property, the business is interested in that area and is willing to accept the donation, she said.

“We can get in the right direction before it goes too far,” Brinda said. “And if it doesn’t fall into place, that deal will fall apart.”

Brinda said the person interested in the deal is a legitimate business person.

She said she is not concerned about the situation not working out because of the members on the committee who perform at an expert level. Brinda said they make sure things are taken care of with everything the CIC does.