Request for Committee Action

2021-00377 - George Floyd Square/38th & Chicago Forgivable Loan Program

In the April 2021 the City launched the George Floyd Square/38th & Chicago Ave forgivable loan program to provide working capital to small businesses, nonprofits, and commercial property owners located in George Floyd Square.  The loans provided $50,000 at 0% interest with deferred payments and the opportunity for full loan forgiveness after one year if the borrower fulfilled the terms of the loan.  In all, the City made 30 loans for a total of $1.5 million.

May 1, 2022 marked the one year anniversary of the loans and in the following months City staff reviewed the requests for forgiveness.  The loans were eligible for forgivenss if the borrower remained open, located in George Floyd Square, and in good regulatory standing and provided documentation of sufficient eligible business expenses.  City staff created an online form to submit the information and sent muliple reminders. To date, 18 of the 30 loans have met the conditions of forgiveness and been notified as such.  This report seeks to resolve the remaining 12.

Of the remaining 12 loans, all but one of the businesses are still located in George Floyd Sqare and in good regulatory standing. One business has closed and the other 11 were not able to provide full and complete documentation of expenses. For these 12 loans, staff believe the likelihood of recovery is low and would require substantial staff time and cost to pursue.  Writing off the remaining balances of these loans is consistent with the goal of the program - to support the businesses at George Floyd Square.  The following chart summarizes the amount of each loan that would be written off.