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Nonprofit Group Sues Over Loan

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By CHRISTIAN M. WADE

cwade@tampatrib.com

Published: February 14, 2009

TAMPA - A local nonprofit organization has filed a lawsuit against a now-defunct steel manufacturer, seeking to recover $500,000 in federal grant money it lent the company in 2006 to create jobs.

The suit, filed Thursday in Hillsborough County Circuit Court, states that Renaissance Steel LLC owes the Corporation to Develop Communities of Tampa the $500,000 principle on the defaulted loan and $116,383 interest. It alleges breach of contract.

The corporation loaned Renaissance the money from a $700,000 U.S. Department of Health and Human Services grant intended to create jobs for East Tampa residents. About $200,000 of that money went toward administrative costs for the nonprofit group's employment program.

Renaissance went out of business two years later, leaving behind a long list of unpaid creditors and a litany of unanswered questions.

Health and Human Services officials are trying to determine what happened to the money, but a spokesman said they have found no evidence of misuse.

Named in the lawsuit is Renaissance Technologies, which is owned by former Tampa developer Bill Bishop, one of the main investors in the company. Bishop, who has left Florida for business school in North Carolina, could not be reached for comment.

Renaissance last was managed by former Tampa mayoral candidate and Clinton administration official Frank Sanchez.

Sanchez, who was on the development group's board of directors when the loan was approved, declined to say what happened to Renaissance and said he has done nothing wrong.

"I have nothing to hide," he said Friday. "Nobody is more disappointed than me that that business wasn't successful. Myself and others spent a lot of time and money trying to make it work and create jobs in our community, but, unfortunately, it wasn't enough."

Renaissance pledged to create 20 management positions and 85 jobs for unskilled workers from one of Tampa's most economically depressed areas. The jobs were to include supervisors, welders, equipment operators and laborers. The average pay was to be $9 to $15 an hour.

Renaissance went belly up two years ago, with former investors alleging more than $82,000 in unpaid invoices.

Under the terms of the loan agreement, which was approved by Health and Human Services, 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.

The agreement contained a provision that if Renaissance defaulted on the loan, it would be charged 18 percent interest on the principle owed.

Toni Watts, the development group's CEO, has declined to comment.

Reporter Christian M. Wade can be reached at (813) 259-7679.

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