Nick K Strikes Again

Not just saying it because he not only quoted me ,and did not call me a silly blogger, but these are the types of things we need to take a closer look at and not just blindly approve under the auspices of it is good since it is for low to mod income housing. The City is a business and it needs to be run like one. Click here for the Telegram story.

Let me clarify one thing and lets call it Loan 101. There are always two parties to a loan:

1) Lender
2) Borrower

Sometimes there is a 3rd party

3) Guarantor

Calling this 5,800,000 loan a Section 108 Hud Guarantee always gave me the impression that the City of Worcester was in the third position and was guaranteeing the loan for the borrower, Gardner Kilby Hammond. In actuality, Garnder Kilby Hammond is not a party to loan and there are only two parties--HUD and City of Worcester. In actuality the City of Worcester is not the Guarantor, but the actual borrower.

In dollars and cents, as Nick points out, now the the enexpended CDBG balances are gone, which could have gone other items like sidewalks, we are going to lose 365,000 per from our current CDBG allocation not to mention two large balloon payments in 2018 (1.87 million) and 2024 (1.27 million). This is awful.

Let me digress for a second. I do not blame the City Manager for this since this was done before he was here, but I do not think him blaming George Bush made sense. He should have said that we should not have done this then and under his administration things like this will not happen.

Case in point the Skybridge. This could have easily become the same thing when the Special District Zone did not generate enough additional net revenue to pay that loan. At least Skybridge loan had some potential revenue source, however, to unlike this 5.8 million dollar loan which hoped for federal earmarks the next 20 years.

This week I will get some of the press releases on this project and what was suppose to be done and what has actually been accomplished.