By LEVI PASCHER
GLOVERSVILLE - The city will take legal action against the Fulton County Center for Regional Growth to get back about $2.5 million held by the CRG.
Mayor Dayton King talks about his budget proposal Tuesday at City Hall.
The Leader-Herald/Levi Pascher
The city wants the CRG to give the loan fund back to the city so it can loan money to local businesses.
At a meeting Tuesday, Mayor Dayton King said the city disagrees with terms of the transfer proposed by the CRG, which is the parent corporation of the county Economic Development Corp. and the Crossroads Incubator Corp.
The Common Council directed City Attorney Anthony Casale to begin litigation.
King said the CRG was willing to transfer the money this week if the city agreed to the CRG's terms.
Since the city will not agree to the terms, the matter will head to court, King said.
"While we had hoped to see this transfer accomplished without court intervention, the EDC's demands leave us little choice," said King. "It is my intention to keep the public informed regarding the status of the matter."
King said the city is concerned the CRG - in its demands - made no mention of paying some of the fees or how the CRG would pay back a $750,000 loan to the CIC for the Estee Commons apartment project.
He also said the CRG wanted the city to pay the CRG's attorney fees.
He said by taking the matter to court, the city can hold the CRG responsible for anything that may have been done improperly.
The mayor said that to date, no payments have been made on the Estee Commons loan.
If the city had the loan pool, the city would maintain it using the Community Development Agency Board of Directors and two existing staff members, along with members of the finance department, King said.
The city allowed the Fulton County Economic Development Corp. to manage the loan pool and approve loans for small businesses in Gloversville years ago.
Today, the loan pool has 14 separate loans totaling more than $1.5 million and a cash balance of approximately $940,000, the mayor said.
Almost $2.5 million sits in the hands of the CRG, King said.
He said people in the city want to reopen, expand or start small businesses, and could use loans.
CRG President and Chief Executive Officer Michael Reese could not be reached for comment this morning.
Levi Pascher covers Gloversville news. He can be contacted at email@example.com.