ALBUQUERQUE, N.M. (KRQE) – A newly released city audit highlights several deficiencies in a program that gave tens of thousands of dollars in grant funds to help small businesses on Central during the ART construction project.
The “Central Loan Fund” was pitched during Albuquerque Mayor Richard Berry’s administration as a financial lifeline for struggling businesses who saw diminishing sales while crews ripped up and repaved Central Avenue.
“We’ve got great community members and other businesses, this is what Albuquerque’s all about,” said then-Mayor Richard Berry during an April 2017 news conference about the loan program.
The program offered qualifying businesses low-interest loans up to $15,000 per business. According to program advertisements, any money dolled out could be used for basic expenses, payroll, rent, taxes, insurance, utilities, marketing and inventory.
According to the new city audit of the program, the loan fund gave cash to 26 different businesses along the Central Avenue corridor, totaling more than $228,000 worth of loans.
However, the city audit also highlights problems with the program and a lot of questions about how the money got handed out.
“It’s not acceptable,” said Albuquerque City Councilor Isaac Benton, speaking of the loan program Thursday. “Clearly (the program) wasn’t being monitored carefully.”
The loans were administered by the now-defunct Small Business Resource Collaborative and the non-profit small business development organization called the “Women’s Self-Sufficiency Team,” or WESST. Funding for the loans came from the McCune Charitable Foundation.
Benton says while he agreed with the concept of the loan program, he disagrees with how the program was handled, based on some of the loans that were given out.
According to the audit, seven businesses were given loans of around $15,000, including Baskin Robbins in Old Town, U Neek Findings antique store and El Taco Tote restaurant in east Nob Hill, Central Rio Grande Investments, Urban Fresh Cosmetics, 5 Star Burger in west downtown and the 66 Dinner in east downtown.
Auditors say that 66 Diner never should have gotten a loan because they make more than $2 million a year in revenues. The revenue threshold was set by the program.
A now-defunct Old Town galleria got a $5,045 loan, however, auditors say they shouldn’t have because their business wasn’t within the Central Avenue metropolitan redevelopment area (MRA).
Auditors also say the X-Pac gym in west downtown got a $1,500 loan, but never opened their businesses on Central Avenue.
Some of businesses that received loans either closed or switched ownership. The audit’s conclusion says the loan program’s “administration and oversight needed improvement.”
“It’s not acceptable, on the other hand… at this point, it’s probably water under the bridge,” said Benton.
The city of Albuquerque shutdown the loan program in January 2019. In total, the city audit states $228,985 in loans was given out to 26 businesses. Only $3,342 was paid back by businesses. The remaining $225,643 was paid out with money provided by the McCune Charitable Foundation.