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Salem panel backs $21K to restart CIC

January 22, 2014
By MARY ANN GREIER , Salem News

SALEM - City Council's Committee of the Whole agreed 5-1 Tuesday to recommend committing $21,000 as start-up money for a reactivated Community Improvement Corporation.

Councilman Jeff Cushman cast the lone no vote, saying he supports the idea of the CIC, but also said "I don't want to see the money just disappear."

He compared it to trying to fill a bathtub with one cup of water and said he wants to see more discussion on the topic. He also said the city should have a say in how the money is spent.

The $21,000 will come from council's contingency fund. When the city received a check for $1.3 million for leasing mineral rights for city-owned property, council placed nearly $70,000 in a contingency fund that council members could use for individual projects or combine their allotments for bigger projects.

Sustainable Opportunity Development Center Executive Director Larry Kosiba made a presentation to the Committee of the Whole last month regarding what's needed to resurrect the CIC, described as a non-profit economic development entity that could acquire, rehabilitate or demolish buildings, acquire land for development, access various funding streams or make loans to businesses.

He updated the committee again on statutory requirements, financial control policies, internal procedures and policies and operation procedures.

Councilman Dave Nestic, who chairs the Committee of the Whole, said a CIC is much like a port authority which can take ownership of property and has a board made up of public and private individuals. According to Kosiba, there would be a core of five members required by statute, including the mayor, president of council, economic development committee chair, SOD Center chair and chamber of commerce chair. He said he would recommend expanding that to include maybe a banker and attorney and other people from both the public and private sector.

Nestic explained that the proposal is for council to put some initial money into the CIC to get it going, with the understanding that the CIC is a separate entity and council can't tell the CIC what to do. He said the amount would be $3,000 per council member from the contingency fund, with the amount totaling $21,000.

"I think we've seen the results of not having this mechanism in place," Councilman Brian Whitehill said regarding a CIC.

Cushman said he was uncomfortable with giving $3,000 from each council member and not having any control. He questioned where the rest of the money would come from to fund the CIC, with Nestic saying the CIC could get grant money. Kosiba said the money from council could also be used to leverage other funding.

Cushman said he worried that this would be a "drop in the bucket" for what's needed for the CIC.

"We have to start somewhere," Councilman Rick Drummond said.

He said if they don't start, they'll be sitting there next year still talking about it.

Councilman Roy Paparodis asked if any of the $21,000 would go to salaries. Kosiba said only if the CIC board would elect to have an executive director or contract for those services. The board members will not get paid. They'll all be volunteering their time.

The SOD Center had been contracted previously to determine what was necessary to reconstitute Salem's version of a CIC, known as the Salem Area Corporation.

The SAC had been chartered by ordinance in 1968, but had been dormant for the past decade under caretaker status through the Salem Area Chamber of Commerce. The topic of a CIC had been raised during discussions about the dilapidated TanFastic building downtown and whether the city had any means to solve the situation, perhaps through a CIC trying to acquire the property for rehab or demolition.

A lawsuit filed previously by the city against the TanFastic building owners remains pending in Columbiana County Common Pleas Court.

Kosiba said he would caution against trying to acquire a building that's in litigation.

Typically a CIC would look at the legalities, see if any liens exist and do a structural analysis before deciding to take ownership. The advantage for a CIC is access to state and federal funds that a private citizen cannot access.

Once a building is purchased and renovated, the CIC could decide to sell it or keep it and rent it out to use as a revenue stream. He also said land could be acquired for an industrial park or a corporate office park.

mgreier@salemnews.net

 
 

 

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