TBO.com - TBO is Tampa Bay Online

East Tampa Nonprofit Group Got Grant, Didn't Produce Jobs

ADVERTISEMENT

By CHRISTIAN M. WADE | The Tampa Tribune

Published: December 22, 2008

TAMPA - An East Tampa nonprofit organization is under scrutiny from the city after falling short on a plan to create jobs with a $250,000 federal development grant.

The Corporation to Develop Communities of Tampa received approval for the Community Development Block Grant in 2005, pledging that the money would be used to renovate a building on East Hillsborough Avenue and create 100 call center jobs.

The company that was supposed to lease half the property, Telesis Solutions Inc, pulled out of the deal, and the jobs that were supposed to be created have evaporated.

Thursday, the Tampa City Council approved a request from the administration to place a lien on the building and imposed other restrictions on the final disbursement of the money, including a requirement that the nonprofit group needs to find a new tenant for the enterprise center within a year and create at least seven good-paying jobs with the money.

"If they don't meet the obligations of the grant, they will be required to repay the money to the city," said Sharon West, the city's housing and community development manager.

Executive Director Toni Watts said the CDC, whose mission is to revitalize East Tampa, has been hit hard by the economic recession and cuts in local government funding.

"It's not easy to create jobs in this economy," she said. "Especially for nonprofit groups."

Watts said the CDC is seeking a new tenant to occupy the enterprise center, which will double as a headquarters for the nonprofit group's employment and housing programs.

Watts said the new building is finished and CDC expects to move in during the next month.

The center is one of several projects touted by Mayor Pam Iorio as part of her promise to redevelop East Tampa – one of the city's most economically distressed communities.

CDC has suffered a series of financial setbacks in the past few years.

The nonprofit group also is on the hook for a $700,000 U.S. Department of Health and Human Services grant intended to create jobs at a now-defunct steel manufacturing plant.

In June 2005, the CDC applied for the federal grant after outlining a project that would create 20 management positions and 85 jobs at Renaissance Steel in Ybor City. About $500,000 of the money was given to the company as a loan to expand its operations.

Three years later, Renaissance has gone out of business, leaving a long list of creditors and the CDC liable for federal money it might not be able to repay.

Under the terms of the loan agreement, included in CDC's application for the federal grant, Renaissance was to repay it over 13 years at 6 percent interest. The interest was to be paid annually, with the loan principal due at the end of the 13-year period.

If the money was not, CDC was expected to return it to the federal government.

The project cost was estimated at $3.1 million, including the $700,000 grant, about $280,000 in CDC money and $2.1 million in equity and loans from local investors.

All told, the CDC is out more than $1 million from the failed public-private partnership, which adds up to about one-third of the organization's average annual budget.

Reporter Christian M. Wade can be reached at (813) 259-7679 or cwade@tampatrib.com.

Loading Comments...

Email Print

ADVERTISEMENT